Homes purchased by non-Singaporeans rose 63% in 2017, thanks to market recovery.
Even if the New Futura (48 units sold out of 64 units) is the only major project launched so far in 2018, sales momentum has been surprisingly strong for the luxury residential project, with close to 60% of the units sold to foreigners despite the high outlay. According to DBS Equity Research, this is an indicator that foreigner demand is already returning to Singapore.
JLL research national director Ong Teck Hui said Singapore is currently more attractive compared with other global markets. “The Singapore private residential market is in the early stages of recovery, promising a longer run in price upside. Melbourne, Sydney, Hong Kong and Tokyo are at the upper end or near the peak of their market cycles, whilst the prime London market is in decline,” he said.
Savills research & consultancy senior director Alan Cheong concurred with Ong and noted that foreign demand is returning in percentage terms, as in YoY increases. “However, compared to the year 2007, it still pales in comparison to those numbers,” he said.
For now, demand will come from locals and foreigners who have gotten Singapore citizenship, Cheong added.
The number of purchases by foreigners that are Non-Permanent Residents (NPR) rose by 44.7% to 1,549 homes in 2017, accounting for about 7.1% of total home sales, Edmund Tie & Company revealed. ET&Co research senior director Lee Nai Jia noted that with Singapore’s private residential market bottoming out, more investors are drawn to the market.
Christine Li, Cushman & Wakefield research director, sees foreign demand growth through the luxury segment. “Though the rise in high-end volumes was mostly attributed to Singaporean demand, the number of non-Singaporean buyers has increased as well. In 2017, purchases by non-Singaporean buyers increased by 63% to 900 units in 2017, from 553 units in 2016,” she said.
Li also shared that anecdotally, some foreigners choose to get permanent resident status first before acquiring a property, in order to qualify for a lower ABSD rate. “This explains the increase in demand from PRs,” she added.
Li noted that with the private residential market on the cusp of recovery, the high-end segment offers an attractive value proposition, as prices of similar luxe condos in other international markets like Hong Kong and New York have not softened. “As such, we expect foreign demand to continue to rise in 2018, as foreigners look for safe havens to preserve their wealth amidst uncertain global economic climate,” she said.