More foreign buyers in Singapore
December 28, 2010 - Singapore
Foreign buyers are snapping up real estate in Singapore with the latest figures to be published showing that they bought almost one in three new private homes last month.
Just under 30% of new private residential units were sold in November to foreigners or permanent residents, figures from DMG & Partners Research show. This is up 8% on the previous month.
While Indonesians and Malaysians are the bulk of foreign real estate buyers the Chinese are increasingly buying, the research also shows.
Chinese buyers began looking seriously at the property market in Singapore in the fourth quarter of 2007 when a handful began buying, according to Brandon Lee, DMG & Partners property research analyst.
‘Previously their numbers were single digit, but now we have seen their group hitting sometimes up to 20%,' he added.
Malaysians make up 25 to 30% of foreign buyers and Indonesians are up to 25%. Kenny Tay, an agent with Huttons Real Estate, said he has seen the number of his Indonesian clients grow by around 20% compared to two years ago.
One reason for the rise in foreign purchases last month could be the recent property cooling measures rolled out in other Asian cities, according to analysts.
Tay Huey Ying, research director at Colliers International, said the increased sliding scale of stamp duties and restraints on mortgage lending in Hong Kong had tempered interest in the Hong Kong and Chinese markets.
‘These buyers may not even be residing in Hong Kong or China. They could be foreign buyers who previously wanted to invest in those areas but have now diverted their attention to Singapore,' he explained.
Another factor could be the recent Government cooling measures in Singapore. These include a rule that they cannot hold foreign property overseas at the time they buy an HDB flat.
Lee said the Government's policy towards the Singapore dollar has also encouraged more foreign investors to invest here, with the expectation that their property's value will rise in tandem with the Singdollar.
Unless there is another round of government measures, the number of foreign buyers will continue to rise, according to Steven Tan, executive director of residential property at OrangeTee.
‘Foreign buyers have confidence in Singapore's overall economy, low interest rate climate and political stability,' he said.
Tan added that some foreigners may turn towards high end property projects like the bungalows on Sentosa or areas like Marina Bay. Prices for this segment have not recovered to the peaks seen in 2007.
This article has been republished from Propertywire
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