More foreigners buying homes in Singapore

Despite signs of a bottoming out, private home prices are expected to ease further this year, albeit at a gradual pace, media reports said. The drop in prices...

JLL recorded an increase in foreigners buying private homes in Singapore.

Singapore’s private residential market attracted even more foreign buyers during the first nine months of this year (9M 2016), according to the latest report from property consultancy JLL.

In 9M 2016, foreigners — excluding PRs (permanent residents) — accounted for 782 transactions, translating to an increase of 11.7 percent from the same period in 2015. Based on statistics from the Urban Redevelopment Authority (URA), the Chinese featured most prominently among foreign buyers, followed by Indonesians, Malaysians and Americans.

“The wealth growth of the Chinese and their increasing familiarity with the Singapore residential market led to them being the top foreign buyers after 2010, overtaking the Indonesians,” said Ong Teck Hui, National Director for Research and Consultancy at JLL Singapore.

Chinese buyers kept their lead with 230 deals. While this is a slight drop from 243 deals a year ago, it still comprised more than a quarter (29.4 percent) of all foreign transactions in the private residential market during 9M 2016.

In the second spot were the Indonesians, who accounted for 114 transactions (14.6 percent), followed by the Malaysians’ 82 deals (10.5 percent) and the Americans’ 57 transactions (7.3 percent).

Notably, the Chinese were drawn to suburban houses thanks to their affordable prices, with such properties making up 58 percent of the units they bought in the period under review.

Malaysians and Indonesians preferred residential properties in the Core Central Region (CCR), where most houses are freehold. Respectively, 40 percent and 68 percent of their purchases were located in the prime districts.

In terms of price, the Chinese and Malaysian buyers opted for houses costing from S$750 psf to S$1,700 psf, while affluent Indonesians gravitated towards properties valued at more than S$1,400 psf, with a large proportion above S$2,000 psf, noted JLL.

Moving forward, demand for private residential properties in Singapore among foreigners is expected to pick up in 2017, with CCR houses being the top choice of this group.

“Foreigners are still interested in investing in Singapore’s private residential market due to its fundamentals and prospects of long-term capital gains. At the heart of demand is both local and regional wealth growth,” Ong added.

 

Cheryl Marie Tay, Senior Journalist at PropertyGuru, edited this story. To contact her about this or other stories, email cheryl@propertyguru.com.sg