Tag Archives: Foreign buyer

Foreigners return to buy luxury property

Private residential properties priced above $5 million accounted for 19 percent of private homes acquired by foreigners in April, an increase from Q1 2015’s six percent, according to DTZ’s analysis of URA Realis caveat data and reported in the media.

Although the absolute volume of transactions is low, the figure is expected to rise as more caveats are lodged.

In April, seven of the 36 caveats lodged by foreign buyers of private homes were above $5 million. In comparison, nine of the 145 caveats lodged by foreign buyers in Q1 2015 were for homes priced above $5 million. The share steadily increased from a low of three percent in Q2 2014.

Lee Nai Jia, associate director of research at DTZ said: “The findings support what has been observed on the ground, where there is an increase in foreign investors displaying interest in luxury apartments.

“Despite facing higher stamp duties to buy properties in Singapore, foreign investors continue to be drawn to the republic’s transparent property market. There is also more smart money flowing in, as investors scour for value-for-money properties.”

According to George Tan, senior director at Savills Residential, “A good proportion of buyers are foreigners including PRs (permanent residents). Many of them are China buyers who are Singapore PRs.”

In agreement, Joseph Tan, executive director (residential) at CBRE stated: “PRC citizens with Singapore PR – that is one of the most common buyer profiles in the high-end market now.”

Majority of the said buyers may have also looked at Hong Kong.

“Singapore and Hong Kong have introduced similar sort of property cooling measures. However, the Hong Kong market, which has seen a rebound in home prices over the past one and a half years, is now looking toppish. In comparison, Singapore property, following price declines, offers better value,” said CBRE’s Tan.

DTZ’s analysis of URA Realis caveats data downloaded on 14 May shows that China buyers are flocking to District 10 again. Notably, 17 percent of the 48 private homes bought by China buyers last month were located in District 10, up from seven percent in Q1 2015 and 10 percent in the previous quarter.

Looking ahead, Savills’ Tan expects the promising recovery of foreign buying in the luxury residential market to continue.

“Prices are still at a low point and there are a lot of savvy, rich people on the lookout for good investment opportunities to take a position just before the market turns. This is the correct time for the rich (to enter the market),” he shared.


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.”