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(D) Foreign Interest in Singapore Real Estate
The study seeks to ascertain whether there are any changes in foreign interest on the Singapore property market. The findings are inconclusive due to very low transactions in the first quarter. However, the percentage seems to suggest that foreign investors are still ‘very keen’ on sharing a slice of Singapore’s success stories. With the various ‘prestige projects’ such as the Integrated Resorts, the F1 event, Youth Olympic, the Singapore real estate scene is not without glamour and glitter to attract a continuous inflow of funds into the global city. However, how much more can the ‘glamour factor’ contribute to serious financial investments such as the real estate remains to be seen.
At the home front, more foreigners here opted to owning instead of renting homes in Singapore, if the statistics for 2007 is anything to go by.
Foreigners bought a record 6,536 non-landed homes from the secondary market in 2007 - the largest number since 1995 and it accounted for more than 50% of the secondary market transactions in 2007. The number includes the 6,000 en bloc sale units.
In terms of percentage, purchases by foreigners on the secondary market increased by 105% in transaction volume compared to 2006.
For new homes, the percentage of foreigners buying non-landed property was lower at 25.4%, or 2,314 transactions out of a total of 9,089. This shows that the foreigners are buying for immediate occupation.
In terms of buyer’s profile, Indonesians remain the top foreign buyers in Singapore, taking up the lion’s share of 23% of the 20,000-old transactions featuring foreign buyers. Malaysians came in a close second with 17% of all foreigners in 2007. The other nationalities ranked in as follows: Indians (12%), British (8%), PRC Chinese (7%) and Koreans (7%).
Below shows a comparative study done on foreign ownership of condominiums and apartment between Q1 2007 and Q1 2008
Table [14] Comparative sales figures between Q1 2007 and Q1 2008 in selected districts
District |
Q1 2008 Sale volume |
Foreigner |
% of foreigner to Total |
Q1 2007 Sale volume |
Foreigner |
% of foreigner to Total |
01 |
51 |
7 |
13.72% |
406 |
41 |
10.09% |
02 |
61 |
23 |
37.70% |
163 |
8 |
5.0% |
03 |
74 |
18 |
24.32% |
224 |
39 |
17.41% |
04 |
68 |
19 |
27.94% |
147 |
27 |
18.36% |
05 |
168 |
26 |
15.48% |
452 |
32 |
7.0% |
09 |
191 |
55 |
28.79% |
879 |
222 |
25.25% |
10 |
212 |
51 |
24.05% |
1,093 |
219 |
20.03% |
11 |
130 |
31 |
23.84% |
627 |
101 |
16.10% |
15 |
370 |
52 |
14.05% |
1,072 |
115 |
10.72% |
16 |
191 |
21 |
10.99% |
370 |
49 |
13.24% |
19 |
160 |
18 |
11.25% |
325 |
10 |
3.0% |
20 |
66 |
4 |
6.06% |
122 |
5 |
4% |
21 |
127 |
23 |
18.11% |
287 |
37 |
12.89% |
23 |
142 |
15 |
10.56% |
306 |
13 |
4.24% |
Table [15] Total figure of foreign ownership of condo/apt in Q1 2007 and Q1 2008
|
Sale volume |
Foreigner |
% of Total |
First Quarter 2007 |
7,937 |
1,038 |
13.07% |
First Quarter 2008 |
2,668 |
450 |
16.86% |
% drop in Total sale volume compared with Q1 2007 |
% drop in Foreigners’ purchase volume compared with Q1 2007 |
% increase in foreign ownership compared with Q1 2007 |
-66.39% |
-56.65% |
3.79% |
Sam Gian’s take:
While the study is inconclusive, in terms of percentage, it shows that for every willing Singaporean buyer, there are more willing foreign buyers.
More foreigners are buying into the Singapore story than the locals. So the question is: ‘are we more discerning or are we missing the woods?’ Only history will tell.
Maybe the local’s ‘bluff of real purchasing power’ is being called by the authorities when it introduced many recent measures to cool the market, such as the decisive withdrawal of deferred payment scheme etc. In fact, the private market is subdued and being shadowed by the fear of liquidity risks* - a fear which I call ‘the direct point of impact’ of the demand-side control. But, at least some semblance of sanity is back into the market; and the market can poise itself for the next run.
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*Explanation of Liquidity Risk is at Annex D
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