Chinese looking to homes in Singapore
Sandy Li in Singapore
Chinese have overtaken Malaysians as the second-largest overseas buyers in Singapore's residential market, despite the Singaporean government introducing measures aimed at cooling down the market.
In the first quarter of this year, said international property consultancy Jones Lang LaSalle, Chinese and Malaysian buyers bought more than 50 per cent of the flats sold in Singapore's prime residential areas.
Indonesian buyers accounted for 24 per cent of the sales, Chinese buyers for 16 per cent, and Malaysians for 14 per cent, it said.
But Chinese made up the largest proportion of those buyers who spent S$5 million (HK$30.9 million) or more on residential property in central and prime markets and in the first quarter 31 per cent of the 54 homes worth S$5 million or more were sold to Chinese buyers.
'The surge in Chinese buyers in Singapore coincided with the policy tightening in China. We expect the number of Chinese buyers to continue at a healthy level as seen in previous quarters, as the fiscal and monetary policy in China remains conducive to overseas investment by the wealthier Chinese,' said Dr Chua Yang Liang, head of research and consultancy at Jones Lang LaSalle's Singapore office.
Since Beijing introduced limits on home purchases, Chinese who were barred from buying third properties at home have had to go to overseas markets to expand their property investment portfolios.
Although Singapore, like Hong Kong and the mainland, has tightened borrowing limits and introduced a hefty stamp duty to penalise short-term speculators, mainland demand has remained strong.
Chua said the Chinese buyers were motivated by the fact that many had children studying in Singapore.
Singapore house prices rose 2.1 per cent in the first quarter, after 2.7 per cent growth recorded in the fourth quarter of last year. For last year, private home prices rose 17.6 per cent despite the government attempts to cool the market.
Since January of last year, institutional and corporate buyers of residential properties in Singapore have been restricted to borrowing up to 50 per cent of the purchase price of properties, down from 70 per cent before. The loan-to-value ratio has also been lowered from 70 to 60 per cent for individual buyers who already own one or more properties.
A 16 per cent levy will be charged for buyers who resell the homes within 12 months.
'The anti-speculative policy has had some impact in cooling down the market. But there's still demand in the market, particularly from long-term investors,' Chua said. He expected Singapore home prices would remain flat or grow by some five to six per cent at most this year.
The developers of the completed luxury residential project the Orchard Residences are due to test market sentiment when they release the remaining 18 flats on sale in the project for S$4,000 per square foot and up. A joint project by Sun Hung Kai Properties (SHKP) and CapitaLand, 90 per cent of the 175 flats available have been sold.
Soon Su Lin, chief executive of Orchard Turn Development, a joint venture between SHKP and CapitaLand, said the cooling measures were targeted at speculators who bought two to three flats for short-term gain.
'Our buyers are mostly mid- to long-term investors,' she said. Four penthouses, ranging from 4,200 sq ft to 5,000 sq ft each, had been sold, she said. One was sold to an international buyer for S$5,600 per sq f, setting a record for Singapore condominium projects.
Soon said international buyers accounted for half the sales at the 56-storey project in Orchard Road, the city's busiest shopping street.
Jimmy Wong, executive director of Sun Hung Kai Real Estate Agency, said the residential property would become a new benchmark in the Orchard Road area.
Soon said that the remaining flats were located above the 40th floor and commanded spectacular views. In 2007, the average price for flats above the 30th floor was S$3,705 per square foot.
Orchard Residences is part of the retail-residential Orchard Turn development, which is being undertaken at an investment cost of more than S$2 billion.