Foreigners buy a third of private homes in 2011

Straits Times: Thu, Feb 09

FOREIGNERS snapped up about 9,300 private homes last year - making it a record one-third of total sales - as factors such as low interest rates and robust economic fundamentals ignited the property market. Their buying patterns have entered new territory as well, with purchasers moving from the traditional prime districts of 9, 10 and 11 to emerging hot spots in Tampines and Pasir Ris. The 2011 boom could be a high water mark, given that December's cooling measures added a 10 per cent stamp duty on homes bought by foreigners. While that makes this year one of uncertainty, there is no denying the market's strength last year. Last year's numbers, contained in a report by consultancy Savills Singapore, found that foreigners, including permanent residents (PRs), accounted for 31 per cent of the transactions - an all-time high. It also showed that Chinese buyers were behind 28 per cent of all foreign purchases, with Malaysians next at 20 per cent, Indonesians at 18 per cent, and Indians at 12 per cent. Comparable figures for foreigner purchases in other countries are not readily available, consultants said. Singapore's proportion might also be skewed because PRs are included in the tally. Foreigners look beyond prime districts Mr Alan Cheong, director of research and consultancy at Savills, noted that although the Chinese were the top buyers, Indonesians had the largest budgets and dominated city-centre deals. 'About 79 per cent of their total purchases were above $1 million, indicating that Indonesian buyers were relatively less active in purchasing small-format or 'Mickey Mouse' homes, which are typically priced below $1 million,' he added. The new stamp duty is expected to hit the luxury segment hard as foreigners made up 43 per cent of all prime home sales, Mr Cheong noted. 'There could be a significant retreat by the Indonesians... Some mainland Chinese buyers may also shift their interest towards cheaper homes. 'Anecdotally, more mainland Chinese investors were seen scouting for alternative properties in the United States of late, while some Indonesian buyers were observed to be sniffing out bargains in Europe,' Mr Cheong said. The impact on suburban property is likely to be less as foreigners comprised only 27 per cent of mass-market home purchases last year. While the make-up of foreign buyers remains relatively unchanged, they are broadening their horizons when it comes to buying a home. Typically, prime districts 9, 10 and 11 and district 15 - which includes Katong, Marine Parade and Siglap - were most sought-after by overseas buyers, but now estates like Serangoon Gardens, Punggol and Geylang have become highly popular. Different nationalities showed varying preferences when buying, said Savills. Mainland Chinese bought mostly suburban homes in districts 14, 15 and 16, which includes much of eastern Singapore, from Geylang, Eunos, Katong, Joo Chiat and Upper East Coast to Bedok. They are popular for their good schools and eateries and proximity to the beach, airport and the central business district, Savills said. But go back to 2007 and district 14, which is now top among Chinese buyers, did not even make it into the top three for Chinese buyers. The area includes Eunos, Geylang and Kembangan. Malaysians also expanded their housing options beyond the usual addresses. District 19 - Serangoon Gardens, Hougang and Punggol - was their most popular last year, with districts 15 and 14 next. But four years ago, district 15 ranked first; district 19 did not even make the top three. The growing popularity of district 19 could be due to the increasing number of new homes launched there. Indian nationals have bought the most number of homes in district 18 - it includes Tampines, Pasir Ris and Simei - possibly due to the many Indian IT professionals working in the Changi Business Park, Savills added. This has sent district 18 jumping from third spot in 2007 to first last year, with districts 15 and 16 in second and third place among Indian buyers. The shifting preferences are not surprising as prime districts waned in favour last year. The 2007 property boom took place largely in the high-end markets of districts 9, 10 and 11, but it was mass-market homes in suburban areas that fuelled the hot market last year. Source: The Straits Times Foreign property buyers set new record Feb 9, 2012 - PropertyGuru.com.sg   Last year marked a historical high for foreign property buyers in Singapore, led by mainland Chinese, Malaysians, Indonesians and Indians, according to property consultancy Savills Singapore. Compared to all other foreign buyers, Indonesians had generally larger budgets, dominating the Core Central Region (CCR). As the number of both Malaysian and Indian buyers increase, their budgets have also grown bigger.   Mainland Chinese topped all foreign purchases with 28 percent, followed by Malaysians (20 percent), Indonesians (18 percent) and Indians (12 percent). “Mainland Chinese bought the most private homes in the Outside Central Region (OCR) (31 percent of all foreign purchases in the (OCR) followed by Malaysians (22 percent),” noted Savills. In the Rest of Central Region (RCR), mainland Chinese were also the top buyers at 27 percent, while Malaysians followed close behind with 20 percent. In the CCR, foreign buying was dominated by Indonesians at 30 percent, while mainland Chinese claimed 20 percent. The research noted that the leading foreign buyers showed varying investment preferences and purchasing powers over the years. “More particularly, their buying behaviour will likely be impacted by the new property measures implemented on 8 December 2011, although in differing degrees,” it added. Moving forward, with foreigners taking 43 percent of all prime home sales in 2011, the additional buyers’ stamp duty (ABSD) is expected to hit the luxury segment the hardest. Indonesians will likely take a step back, as they constituted the majority of luxury segment buyers.