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Chinese buying of homes holding up
[SINGAPORE] Private home purchases here by non-Singaporeans fell nearly 35 per cent last year. And the biggest drop, in percentage terms, among the top four nationalities came from the Indians while the smallest was from the mainland Chinese.
According to a caveats analysis by DTZ, the Indians picked up 460 homes, down 52.5 per cent from 968 in 2012. The mainland Chinese bought 1,479, or just 16.9 per cent fewer than the 1,780 in 2012.
This was smaller than the 36 per cent slide in purchases by the Malaysians, whose tally came to 1,303 compared with 2,037 in 2012. As a result, the mainland Chinese overtook the Malaysians last year to once again be the top group of non-Singaporean buyers of private homes.
The Indonesians, meanwhile, bought 41.7 per cent fewer homes last year - 880 units against 1,510 in 2012.
DTZ combined Singapore permanent residents (PRs) and foreigners in its nationality breakdown of overseas buyers.
It found that the bulk, or about 65 per cent, of the 1,479 homes bought by the mainland Chinese were priced below $1.5 million. Around 62 per cent of the total were bought from developers. And more than 80 per cent were outside the traditional prime districts of 9, 10 and 11.
The three most popular planning areas among the mainland Chinese were Pasir Ris (131 units), Bukit Timah (129 units) and Bedok (123 units).
New project launches in Bedok last year include Urban Vista and The Glades. In Pasir Ris, D'Nest, The Inflora and Vue 8 Residence were among the new launches. The Bukit Timah planning area includes CapitaLand's D'Leedon project and Far East Organization's new development, The Siena.
Demand from the mainland Chinese could be more resilient due to a few factors. Buying restrictions back home have led them to look overseas for opportunities, and Singapore is still one of their favourite investment destinations, said Lee Lay Keng, head of Singapore research at DTZ.
"They are attracted by the similarity in the culture with our majority Chinese population, and Singapore continues to offer a stable and secure environment for their investments. Some of them are investing in Singapore as they have business links here or are planning to send their children here for education."
Currency exchange rates may also have been a factor behind the smaller drop in purchases by the mainland Chinese compared with the other key nationalities. While the yuan strengthened against the Singapore dollar last year, the currencies of Malaysia, India and Indonesia weakened against the Sing dollar, making property here more expensive, market watchers say.
In DTZ's analysis, if PRs were excluded, foreigners' share of total private home purchases rose to 9 per cent from 6 per cent in 2012. This is because they posted a smaller percentage drop in units bought in 2013 compared with PRs and Singaporeans.
While purchases of foreigners fell 20 per cent year on year to 1,821, the number for PRs declined nearly 41 per cent to 3,256 units.
The 15,798 units that Singaporeans bought represents an almost 42 per cent slide from 2012.
Ms Lee said: "Although the year-on-year drop in foreign purchases in 2013 was the smallest across the different buyer groups, it should be noted that foreign purchases had already fallen about 60 per cent year on year in 2012, after the ABSD (additional buyer's stamp duty) was first introduced in December 2011.
"The impact of the increased ABSD in January 2013 therefore was felt less among foreign buyers who already had to pay ABSD (on all residential property purchases here), compared to Singaporeans buying their second property and PRs buying their first property, who previously did not have to pay any ABSD."
In 2012, purchases by Singaporeans and PRs rose 26 per cent and 29 per cent, respectively.
Another trend among foreign buyers was that their purchases of homes above $5 million held firm, even as overall purchases of properties in this price range fell 34 per cent. Foreigners bought 106 homes priced over $5 million in 2013 - similar to 2012. In contrast, purchases of such properties by Singaporeans and PRs slipped 44 per cent and 27 per cent respectively.
On the whole, foreign buying is expected to remain subdued this year in the face of the property cooling measures, the strong Singapore dollar and competition from overseas property markets, such as London, New York and Tokyo.
"However, some high-profile projects here - either those being built by foreign developers or marketed aggressively overseas - may draw a higher proportion of foreign buyers," said DTZ's South-east Asia chief operating officer, Ong Choon Fah.
Mainland China buyers are expected to continue outperforming the other three key nationalities of overseas buyers in 2014.
"Singapore will continue to be attractive to people from China - it's stable, liveable, close to China and a great place to learn English," said Mrs Ong. "Often, they use Singapore as a first stop before moving on to the West. So Singapore tends to be 'a hotel' rather than a home for them."
The proposed establishment of the Asean Economic Community by 2015 will draw more buyers from the region to the Singapore property market in the longer term.