Tag Archives: Foreign Buyers

Chinese buyers shun Singapore

Discouraged by the high taxes in Singapore, fewer foreigners are purchasing private homes here, leaving the market to rely on local buyers, reported Reuters.

Data compiled by DTZ showed that foreigners, including permanent residents, purchased 499 homes in Q4 2015. This accounted for around 16 percent of total transactions, down from 30 percent recorded in Q3 2011 just before the introduction of the Additional Buyer’s Stamp Duty.

Acquisitions by the Chinese, considered one of the biggest foreign buyers of Singapore private homes, fell 40 percent from a year earlier to 151 units. DTZ noted that the figure is also down 80 percent from the peak in Q3 2011.

The figures were based on caveats lodged as of 15 January, with the land planning authority maintaining an online database.

“Chinese money is being attracted by Australia and the UK,” said Alan Cheong, Research Head at Savills Singapore.

He noted that the stamp duties should be rolled back to a level where the city-state can still capitalise on Chinese funds without attracting too much hot money.

“If we continue to sit by with all these measures, we are just going to miss the boat,” he said.

And with the benchmark 3-month Singapore Interbank Offered Rate (Sibor) on an uptrend, local buyers may also become cautious. The Sibor, which is used to set interest rates on mortgages, rose to 1.254 percent this week, or its highest since October 2008.

Buyers shun luxury city apartments despite price falls

Luxury apartment sales in the city centre sank markedly in the first half of 2014, revealed a CBRE report.

According to caveats data for the Core Central Region (CCR), there were 48 transactions of properties costing $5 million and above in the first six months of the year, compared to 78 and 107 deals in H2 2013 and H1 2013 respectively.

CBRE attributed the drop in sales over the past year to the TDSR framework which took effect at the end of June 2013.

At the same time, foreign buyers who used to be big players in Singapore’s prime residential market, appear to be retreating since the ABSD was raised to 15 percent.

Purchases by foreigners plummeted to 14 units in H1 2014 from 35 the year before.

Weak market conditions have also put pressure on prices, with the average price of completed luxury apartments at $2,800 psf, down slightly from $2,825 psf at end-2013.

Helped by the sale of 16 units at Goodwood Residence after factoring price discounts and rebates, the average price for new developments was $2,400 psf.

As at end-June, three luxury residential projects were completed, namely Tomlinson Heights, TwentyOne Angullia Park and Le Nouvel Ardmore. But the report noted that approximately 70 percent of the 167 units from these developments remain unsold, on top of 300 unsold units from other projects completed over the last one to two years.

To help close deals, CBRE said: “Some developers are looking for bulk purchasers while others are seeking to attract buyers via direct discounts and ABSD rebates. With prices softening, sales volume might see improvement in H2 2014.”