Singapore’s property market gets a lift amid recession with tonic from mainland Chinese buyers, ‘unspecified foreigners’

Sales of new non-landed homes rose for a fourth straight month in August to a two-year high, according to data compiled by OrangeTee & Tie

National security law in Hong Kong and US-China tensions could be possible reasons for the jump in transactions by mainland Chinese investors

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Luxury waterfront condominiums in Tanjong Rhu, located across Singapore’s Marina Bay financial district. Photo: Reuters

Published: 8:30am, 11 Sep 2020Updated: 12:25pm, 11 Sep 2020

Singapore’s property market is enjoying a sudden lift in an economy mired in recession. A category of buyers labelled as “foreigners, unspecified”, possibly including mainland Chinese, are behind the resurgence.

Sales of new non-landed homes, typically referring to flats and condominiums, rose for a fourth straight month to 1,233 units in August, according to data compiled by OrangeTee & Tie, based on statistics released by the Urban Redevelopment Authority. The volume is the highest since July 2018.

The increase was underpinned by deals involving foreign buyers whose nationality the government has yet to specify or determine. This group accounted for 421 deals in June to August, surpassing the sum of transactions in the preceding eight months.

“This could be due to a delay in data update, which sometimes takes a few months after the buyer exercises the option to purchase the unit,” said Christine Sun, head of research and consultancy at OrangeTee & Tie. Mainland Chinese buyers may also fall under the so-called ‘foreign unspecified’ category, she added, based on anecdotal evidence like on-ground observations.

The upsurge has piqued the curiosity of analysts given Singapore’s dire economic backdrop, after the city state economy slumped by a record 13.2 per cent in April to June. In that quarter, home prices retraced by 1.1 per cent, the most in three years.

Investors who have been looking out for signs of capital outflows from mainland China or Hong Kong may derive some clues from the timing of these property purchases in Singapore. They coincided with the imposition of a national security law in Hong Kong in late June, an electrifying rally in technology stocks, and China’s move to extend its tax dragnet worldwide in July.