Singapore home sales surge even as foreign demand stays subdued

[SINGAPORE] After years of declines, Singapore's home sales are on a roll, even as purchases by foreign buyers have remained muted.

Stringent stamp duties levied by the government have had the intended effect of damping speculative foreign demand, with foreign buyers accounting for just 6 per cent of purchases in the first half, data from Cushman & Wakefield show. That compares with 9 per cent as recently as 2013, when mortgage rules were tightened.

Developers sold 7,147 private homes in the first seven months of the year, 50 per cent higher than in the same period a year earlier. So who's buying all these homes? It's local Singaporeans.

Among foreign buyers, the biggest pullback was by Malaysian and Indonesian buyers, while Chinese demand held steady. Malaysian buyers among foreign purchasers dropped from 26 per cent in 2013 to 21 per cent in the first half of this year, while the Indonesian proportion slid to 6 per cent from 17 per cent in 2013.

The Chinese share, the biggest of any group, has been at 29 per cent or 30 per cent since 2013.

BLOOMBERG