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This further reinforces what I believe - there are just TOO many rich people in Singapore, and the income gap can only get bigger, not smaller!

May 25, 2011
Foreign home buyers hit record in Q1

By Esther Teo, Property Reporter

FOREIGN home buyers snapped up 16 per cent of all private homes sold in the first quarter - the highest quarterly percentage since data became available in 1995.

Experts say the high foreign proportion in the market is because such buyers have been less affected by the rounds of cooling measures which have muted local interest.

The overseas impact has been telling, according to the DTZ Research report that contains the new buying figures.

Its analysis of caveats lodged for both new and secondary sales found that foreigners bought 1,028 units in the three months to March 31. That 16 per cent share of the market tops the previous record of 15 per cent - or 784 units - in the fourth quarter of 2007.

Foreigners were also active in the last quarter of last year when they bought 1,092 units, accounting for 13 per cent of the market.

Demand from permanent residents (PRs) remained stable at 17 per cent in both quarters.

DTZ said Chinese buyers - including permanent residents - also set a record, accounting for 24 per cent of purchases made by non-Singaporeans in the quarter. They have overtaken Malaysians for the first time.

Malaysians have held the top position since the second quarter of 2008 but have seen their market share dip from 24 per cent in the fourth quarter of last year to 21 per cent in the first quarter.

Homes in District 16 - this comprises Bedok and Upper East Coast - saw greater buying interest from foreigners compared with last year.

District 18 - including Tampines and Pasir Ris - and District 23 comprising Hillview and Chua Chu Kang were also increasingly popular.

DTZ's head of South-east Asia research, Ms Chua Chor Hoon, said foreign interest has remained stable at about 1,000 units a quarter over the past 12 months as Singapore has maintained its reputation as a safe investment haven.

The new high is due mainly to a drop in the number of purchases by Singaporeans as the January cooling measures have had a larger impact on them, said Ms Chua, who added that interest from foreigners is expected to remain stable in the next few quarters.

'However, local concerns about high housing prices and the influx of foreigners that were magnified during the recent general election will be a catalyst for the review of immigration and housing policies, which could dampen demand in the residential market in the coming months,' she noted.

Other experts added that interest from foreigners has been sustained due in part to the buzz created by the two integrated resorts and the country's growing strength as a financial hub.

Dr Chua Yang Liang, head of research at Jones Lang LaSalle South-east Asia, said that China's moves to tighten lending policies might have led Chinese buyers to turn to Singapore while some Europeans moving here to work have chosen to buy rather than rent.

'Regional economic conditions - in Singapore, Indonesia and Australia - are strong and this means that foreign buyers are likely to remain active here as Singapore positions itself as a global city,' he added.

Ms Wendy Tang, Knight Frank's director of residential services, said most foreign buyers are Asians with a long-term perspective and attracted to the stability that Singapore offers. The strengthening Singdollar also assures investors that this is a good place to park their cash.

Foreigners also bought more into the high-end market. They accounted for 21 per cent of all the homes sold for $1.5 million and above in the first quarter, up from a 17 per cent share in the previous three months.

January's cooling measures were noted to have made an impact, mostly in the secondary sales market. The number of caveats fell by more than half in February to 745, from 1,664 in January.

But the secondary sales volume rebounded to 1,592 caveats in March as the initial reaction to the cooling measures appeared to wear off, DTZ said.

Private homes smaller than 1,000 sq ft continued to be popular with HDB buyers, with the proportion of such buyers rising from 41 per cent last year to 46 per cent in the first quarter.