Increased share of foreign homebuyers

Posted on 29 Oct 2014 | Comments Off on Increased share of foreign homebuyers

The proportion of foreign homebuyers, comprising Permanent Residents (PRs) and non-PRs (NPRs), increased from 22.9 per cent in Q2 2014 to 27.7 per cent in Q3 2014, according to Knight Frank’s latest Research Bulletin for the Residential sector.

The increase comes after a quarter-on-quarter decline in Q2.

“This rise in home-buying interest could signal that foreigners are beginning to adapt and adjust to the higher cost of foreign ownership of homes in Singapore. Such increased cost is a result of several property cooling measures implemented over the last few years to dampen foreign demand and curb speculation in the private residential market,” said Tan Tee Khoon, Executive Director, Residential Services at Knight Frank Singapore.

Foreign buyer interest was particularly strong in District 23 which recorded the largest number of home purchases by foreign buyers in Q3 2014.

The quarterly increase in the proportion of PR and NPR homebuyers for this district (which includes Hillview, Dairy Farm, Choa Chu Kang) was also the largest, rising from 5.5 per cent in Q2 2014 to 8.8 per cent in Q3 2014.

There were a total of 717 foreign homebuyer transactions throughout the country in the third quarter, and about 17.3 percent were in the prime residential Districts 9, 10 and 11, marking an increase from the 14 percent recorded in Q2 2014.

Foreign homebuyer transactions formed 36.3 percent, 34.5 percent, and 20.2 percent of total transactions in Districts 9, 10, and 11 respectively in Q3 2014.

According to Knight Frank, the rise in the ration of foreign buyers from July to September reflects foreigners’ interest to invest and live in Singapore. Tan added, “Such foreign home-buying interest is expected to rise further as Singapore continues to establish itself as a global city with stable economic fundamentals and a conducive living environment.”

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Project delays caused by tighter rules on foreign workers

Posted on 29 Oct 2014 | Comments Off on Project delays caused by tighter rules on foreign workers

Singapore’s construction industry is suffering from late payments and project delays, as contractors are squeezed by higher operating costs and the government’s curb on foreign workforce, according to media reports.

“Construction demand is expected to continue with many big projects such as the MRT line extensions, Changi Airport expansion, but a shortage of workers means projects may cost more and take longer to complete,” said KPMG Singapore Partner for the building sector, Teo Han Jo.

In fact, more than half of the payment transactions in the sector were overdue in the second quarter, with the incidence of late payments increasing by 3.8 percentage points to 51.4 percent, revealed the Singapore Commercial Credit Bureau (SCCB).

Payments are considered late when over half of the amount owed is not satisfied on time, while prompt payments are made when at least 90 percent of the total amount is paid on the stipulated date.

But one of the most pressing issues for construction companies are the high levies on foreign workers. In fact, the operation of a subcontractor working on Downtown Line 3′s Upper Changi Station has been disrupted when it failed to pay such fees on three instances due to cashflow problems.

“Works on the DTL3 (Downtown Line 3) Upper Changi Station are progressing as normal. The sub-contractor . . . has foreign worker levy arrears and the main contractor, Samsung C&T Corporation, is in the process of taking over (its) workers. There is no impact to the schedule of the project,” a representative from the Land Transport Authority (LTA) said.

Despite these issues, the prospect of the construction industry appears promising due to the substantial number of projects in the long-term pipeline, particularly government infrastructure developments, noted Teo.

“Government agencies are also placing more emphasis on quality rather than just prices when awarding projects. The net effect of this for the construction industry is good over the longer term, as it raises overall quality and helps construction companies maintain healthy margins,” she added.

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Posted in Construction

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