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Foreigners hold dear to Singapore property

Wallich Residence_Infinity Pool.jpg
The infinity pool at Wallich Residence.

FOREIGN buyers love their properties here, and regulations have nudged these investors to regard such assets as homes.

The 20 per cent additional buyer's stamp duty (ABSD) on Singapore property purchases has made Singapore properties less attractive as speculative assets, analysts said.

Since 2011, China buyers have overtaken the Indonesians as the largest group of foreigners buying homes here except in 2012 and 2015.

And here, analysts point out that many of the Chinese buyers are already living in Singapore. Some are expatriates working for the rapidly growing number of Chinese companies that have set up operations here.

Indeed, Chinese firms such as ByteDance and Tencent are too among the active takers of prime office space in recent months, reflecting the high-growth trend from the Chinese tech sector.

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Analysts add that the Chinese see property investments in the Republic as a store of value, a hedge against currency devaluation risks and as homes for their children.

Indonesians may have been overtaken as top buyers of properties in Singapore. But they remain hefty investors here. Homes priced above S$5 million accounted for 39 per cent of purchases by Indonesians. Analysts point to anecdotes of Indonesians snapping up homes in the prime districts for their proximity to medical facilities.

About a third of such high-end homes are snapped up by the Chinese, while 14 per cent of such purchases are made by Americans.

The need for holding power from buyers comes as cooling measures introduced in July 2018 jacked up the ABSD to 20 per cent and 25 per cent for foreigners and entities respectively.

There is also seller's stamp duty imposed on a sale if the home is held for less than three years. The July 2018 rules were the ninth - and latest - round of cooling measures starting from 2009.

A recent omission of one dataset on foreign buying will make it more difficult to analyse their buying behaviour. The Business Times broke a story this month that the Urban Redevelopment Authority in October had stripped out certain pricing data on foreign buying on its Realis data platform.

For example, in terms of price quantum, the data could be used to study the volume of homes bought by certain nationalities in any given quarter, zooming in on different price categories - S$500,000 to S$1 million; S$1-S$1.5 million; S$1.5-S$2 million; and other relevant price ranges.

Industry watchers said they will not be able to capture the buying behaviour of specific nationalities for a given locality or time frame. The removal of certain data sets was done during a review of Realis, and was due to their very low usage rates, the URA had told BT.

In the first nine months of 2020, the share of non-landed home sales transacted by non-Singapore citizens stood at 20.4 per cent of 12,049 units islandwide, and 28 per cent in prime districts. There was a slight dip in proportion of foreign buying, given travel restrictions due to Covid-19, analysts said.

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