Sale of private homes to foreigners slips to 24%

Singaporeans' share of the purchases rises to 73%

(SINGAPORE) As foreigners retreated from the Singapore property market in the face of the global financial meltdown, their share of private home purchases eased to 24 per cent last year from the high of 26 per cent in 2007, according to DTZ's latest analysis of caveats.

Conversely, Singaporeans' share of the private home buying pie rose from 67 per cent in 2007 to 73 per cent in 2008, with companies making up the rest of the buying pool.

Giving a breakdown of the foreign buying pool, which includes permanent residents (PRs), DTZ said that non-PR foreigners accounted for 11 per cent of total caveats lodged for private homes last year, down from a 13 per cent share in 2007.

Singapore PRs' share held steady at 13 per cent, supported by the increase in the number of PRs in recent years.

Projects that drew the most Singapore PR buyers last year were chiefly in the mass-market segment such as Melville Park in Simei, Livia in Pasir Ris, The Lakeshore in Jurong Lake District and Clover by the Park in Bishan.

The most popular projects among non-PR foreigners were The Lakeshore, Citylights, Icon and Costa Del Sol.

Districts 9, 10, 15 and 16 were the most sought-after haunts of foreigners (including PRs) who bought private residential properties in Singapore last year. Districts 15 and 16 cover the East Coast area.

Malaysians pipped Indonesians to account for the lion's share, or 20 per cent of foreign buyers of private homes in 2008, followed by Indonesians (19 per cent), Indians (12 per cent) and mainland Chinese (11 per cent).

DTZ noted that in the fourth quarter of 2008, homes priced above $1 million accounted for 72 per cent of purchases by Indonesians, higher than a 41 per cent share of purchases by Malaysians.

The property consultancy firm's senior director (research) Chua Chor Hoon reckons that the
proportion of foreign buying will stay low in the next 12 months as Singapore property loses some of its relative shine.

'Steeper currency declines in markets like Australia and UK have made property prices there look more attractive in comparison with Singapore. And investors will become more cautious as the global financial crisis deepens,' she said.

DTZ's analysis of caveats captured by the Urban Redevelopment Authority's Realis system also showed that the number of private home buyers who had HDB addresses fell in Q4 and the whole of 2008.

However the pace of decline was even faster among those with private addresses. As a result, HDB upgraders' contribution to private home purchases increased from 22 per cent in 2007 to 36 per cent in 2008 - the highest level in four years.

'In 2008, few investors and speculators, in particular those with private addresses, entered the market and launches of high-end projects were held back.

'On the other hand, there was a wider spread of projects in the suburbs launched at $1 million or below per unit, which are more affordable for HDB upgraders,' said Ms Chua.

In general, private homes in districts 15, 18 and 19 were most popular among HDB upgraders.
Projects with the highest number of developer sales to HDB upgraders in 2008 included Livia and Clover by the Park, while in the secondary market, the top-sellers to HDB upgraders were The Centris in Jurong West, Melville Park and Citylights.

Ms Chua reckons that HDB upgraders will continue to feature prominently in the private home buying pie going ahead. 'The focus this year will be on buying for own occupation rather than for investment or speculation; most HDB dwellers would fit the bill,' she said.

Source: Business Times, 9 Mar 2009