Who's buying?
In addition to the traditional market of Indonesian and Chinese buyers, more money from the Middle East is flowing into Singapore in the wake of the unrest in the region.
Offshore-- Chinese are second-largest overseas buyers in Singapore
The Chinese have overtaken Malaysians as the second-largest overseas buyers in Singapore’s residential market, despite the Singaporean government introducing measures aimed at cooling down the market.
International property consultancy Jones Lang LaSalle says that in 1Q2011, Chinese and Malaysian buyers bought more than 50% of the flats sold in Singapore’s prime residential areas. Indonesian, Chinese and Malaysian buyers accounted for 24%, 16% and 14% of the sales respectively, it says.
But the Chinese made up the majority of the buyers who spent S$5 million (about RM12 million) or more on residential property in central and prime markets and, in 1Q, 31% of the 54 homes worth S$5 million or more were sold to Chinese buyers.
“The surge in Chinese buyers in Singapore coincides with the policy tightening in China. We expect the number of Chinese buyers to stay at a healthy level as seen in previous quarters, as the fiscal and monetary policy in China remains conducive to overseas investment by the wealthier Chinese,” says Dr Chua Yang Liang, head of research and consultancy at Jones Lang LaSalle’s Singapore office.
Since Beijing introduced limits on home purchases, Chinese who have been barred from buying third properties at home have had to go to overseas markets to expand their property investment portfolios.
Although Singapore, like Hong Kong and the Chinese mainland, has tightened borrowing limits and introduced a hefty stamp duty to penalise short-term speculators, demand from the Chinese mainland has remained strong.
Chua says that the Chinese buyers are motivated by the fact that many have children studying in Singapore.
Singapore house prices rose 2.1% in 1Q, after 2.7% growth recorded in 4Q2010. Last year, private home prices rose 17.6% despite government attempts to cool the market.
Since January 2010, institutional and corporate buyers of residential properties in Singapore have been restricted to borrowing up to 50% of the purchase price of properties, down from 70% before. The loan-to-value ratio has also been lowered from 70% to 60% for individual buyers who already own one or more properties.
A 16% levy will be charged for buyers who resell their homes within 12 months of purchase. “The anti-speculative policy has had some impact in cooling down the market. But there is still demand in the market, particularly from long-term investors,” Chua says. He expects Singapore home prices to remain flat or grow by 5% to 6% at most this year.
Orchard Turn Developments Pte Ltd, the developer of a completed luxury residential project called Orchard Residences, is expected to test market sentiment when it releases the remaining 18 flats on sale in the project for S$4,000 psf and higher. Ninety per cent of the the project’s 175 flats have already been sold.
Soon Su Lin, chief executive of Orchard Turn Developments, a joint venture between SHKP and CapitaLand, says the cooling measures are targeted at speculators who buy two or three flats for short-term gain.
“Our buyers are mostly mid- to long-term investors,” she says. Four penthouses, ranging from 4,200 to 5,000 sq ft each, have been sold, she says. One was sold to an international buyer for S$5,600 psf, setting a record for Singapore condominium projects.
Soon says international buyers account for half the sales at the 56-storey project in Orchard Road, the city’s busiest shopping street.
Jimmy Wong, executive director of Sun Hung Kai Real Estate Agency, says the residential property will become a new benchmark in the Orchard Road area.
He says that the remaining flats are located above the 40th floor and command spectacular views. In 2007, the average price for flats above the 30th floor was S$3,705 psf.
Orchard Residences is part of the retail-residential Orchard Turn Development, which is being undertaken at an investment cost of more than S$2 billion. -- SCMP This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 855, Apr 25-May 1, 2011
Vancouver is not alone in being a target for cash-flush Chinese eager to buy foreign real estate. Singapore reported last week a record number of Chinese home buyers in the "Lion City" last year. The Chinese slipped into second place among foreign buyers behind Malaysians, who traditionally dominate foreign property ownership in Singapore. Chinese buyers accounted for 19 per cent of all foreign buyers in 2010 and in the fourth quarter they represented 23 per cent. Officials point out that 72 per cent of property buyers last year were Singaporeans. However, that was down from 76 per cent in 2009. >> 2011 June VANCOUVER SUN
PRC buyers a force in Singapore's residential market
Home hunters from China are becoming a force to be reckoned with in Singapore, and their presence could grow further as the authorities on the mainland and in Hong Kong clamp down on real estate speculation.Ref:realestatefundmanager
Analysing the caveats lodged, property consultancy DTZ found that the Chinese accounted for 20 per cent of private home transactions involving foreigners and permanent residents (PRs) in the third quarter. This proportion is the highest since official data was available from 1995.
The Chinese became the second-largest group of non-Singaporean buyers, on a par with Indonesians. Malaysians took top spot with a 21 per cent share, and Indians ranked fourth with 14 per cent.
On the whole, foreigners and PRs accounted for 23 per cent of the 7,888 private-home transactions in the third quarter.
Singaporeans bought the majority of homes and had a 73 per cent share. Companies were involved in the remaining 3 per cent.
The presence of Chinese buyers has grown significantly since 2007, DTZ said. Just a quarter earlier in Q2, they made up 17 per cent of non-Singaporean private home buyers, coming in third behind Malaysians and Indonesians.
Their share of transactions 'may go up further as recent property market curbs in China could prompt more mainland Chinese buyers to turn their attention overseas', DTZ said.
The Chinese government has introduced a raft of rules to cool the property market in the last few months. These include a suspension of mortgages for third homes, higher interest rates, and larger down payments for homes. A property tax is now said to be on the cards.
Hong Kong has also stepped up efforts to weed out property speculators.
Just a few days ago, the authorities imposed a special stamp duty on property transactions with short holding periods - those reselling their properties within six months would be taxed as much as 15 per cent of the total transaction amount.
Chinese buyers are probably expecting limited upside from investing in property at home as more measures come into play, said Credo Real Estate executive director Ong Teck Hui. As a result, some of them could turn to Singapore.
Anecdotally, quite a number of Chinese also buy property in Hong Kong, so rule changes there would also have an effect, he added.
Savills residential director Phylicia Ang agreed that policy tightening on the mainland could lead more Chinese property buyers here. But she pointed out that many purchase homes in Singapore not so much for investment, but because they become PRs or have family members studying here.
'Singapore is one of those cities that they are comfortable with,' said Knight Frank managing director (residential services) Peter Ow.
A number of them become acquainted with the property market here through their private bankers or local developers with offices in China, such as Far East Organization, he added.
The topic of foreigners buying property in Singapore is a touchy one, especially at a time of rising home prices. Singapore has introduced several measures to keep the property market stable since September last year.
On Monday, Finance Minister Tharman Shanmugaratnam said that 'the government will continue to monitor the situation closely and take additional steps, if necessary, to ensure financial stability and sustainable asset markets'.
Most property consultants do not expect the authorities here to tighten policies as sharply as Hong Kong did - at least for the time being. The rate of price escalation for non-landed private homes has slowed in the third quarter and the government may wait to see how prices move for the rest of the year, said Credo's Mr Ong.
The market will be watching CapitaLand's launch of D'Leedon closely for signs of where private home prices are headed. A preview of the project is said to be taking place this week, with asking prices mostly above $1,600 per square foot. - 2010 November 24 SINGAPORE BUSINESS TIMES
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