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PR Newswire
12-09-2011, 07:31 AM
The Straits Times
Sep 12, 2011
Luxury apartments draw more foreign buyers
Singaporeans may be cautious as prices have not recovered from peak or they may have bought landed homes
By Esther Teo
FOREIGNERS are snapping up posh apartments and contributing to much of the activity in the high-end market that has been languishing since the heady days of 2007.
Foreigners, including permanent residents, have bought 162 non-landed units with a price tag of more than $5 million in the first half of this year.
That is about 60 per cent of the transactions at the top-end market, according to an analysis by Cushman and Wakefield of caveats lodged with the Urban Redevelopment Authority. These include both primary and secondary sales.
On that same basis, foreign buyers accounted for 46 per cent of the high-end market last year and only 24 per cent in 2005.
Chinese and Indonesians have dominated the upmarket segment this year, making up almost half of all high-priced purchases. They were followed by Malaysians, British and Indians.
Singaporeans have retreated, accounting for just 20 per cent of purchases of more than $5 million in the six months to June 30.
Last year, they had 34 per cent of the market and 25 per cent in 2007.
Companies make up the rest of the transactions.
Experts say the increased interest from foreigners is not entirely surprising, due in part to the buzz created by the two integrated resorts and the country's growing strength as a financial hub.
Dennis Wee Group director Chris Koh said many see Singapore as the most stable country in the region, with a strong government, developed infrastructure and quality medical and educational services.
Mr Colin Tan, Chesterton Suntec International's research head, noted that the foreigner share has increased mainly due to the reduced interest from locals.
'In 2007, many of the locals bought into the high-end segment in a big way. Some might not have seen their prices recover yet and so demand is lower now,' he added.
SLP International research head Nicholas Mak said high-end homes have always depended significantly on foreign buyers.
Demand from Singaporeans could have fallen as those with bigger budgets might have decided to go into the landed home segment instead, which has recorded robust price growth of 31 per cent last year.
'Since 2007, the landed homes market has seen stronger interest, with Sentosa Cove prices influencing those on the mainland. Singaporeans see it as a lifestyle and investment choice and are starting to see more value in such homes,' added Mr Mak.
The luxury market - defined here as an elite club of projects that have achieved both unit prices of $3,000 per sq ft (psf) and total quantums edging past $5 million - has flatlined since last year.
There were 79 such homes sold in the first eight months this year while 73 were picked up in the same period last year. But go back to the boom of 2007, and 237 posh apartments found buyers in the same period.
Prices are also languishing about 6 to 8 per cent below their 2008 peak, despite the property boom that has seen all other segments surpass their historical highs.
Only around two dozen upscale projects made the elite club list of $3,000 psf and $5 million-plus pricing, including Nassim Park Residences, Tomlinson Heights and The Orchard Residences.
It was a foreign buyer who smashed the unit price record this year, picking up a 3,003 sq ft unit at The Marq on Paterson Hill for just under $6,400 psf - or about $19 million.
City Developments executive chairman Kwek Leng Beng said now is not the best time for luxury projects because sophisticated investors are waiting for the market to be more certain.
Transactions are few and demand is not as good as before, acknowledged Mr Kwek, who was speaking on the sidelines of a Real Estate Developers' Association of Singapore event on Friday.
esthert@sph.com.sg
Sep 12, 2011
Luxury apartments draw more foreign buyers
Singaporeans may be cautious as prices have not recovered from peak or they may have bought landed homes
By Esther Teo
FOREIGNERS are snapping up posh apartments and contributing to much of the activity in the high-end market that has been languishing since the heady days of 2007.
Foreigners, including permanent residents, have bought 162 non-landed units with a price tag of more than $5 million in the first half of this year.
That is about 60 per cent of the transactions at the top-end market, according to an analysis by Cushman and Wakefield of caveats lodged with the Urban Redevelopment Authority. These include both primary and secondary sales.
On that same basis, foreign buyers accounted for 46 per cent of the high-end market last year and only 24 per cent in 2005.
Chinese and Indonesians have dominated the upmarket segment this year, making up almost half of all high-priced purchases. They were followed by Malaysians, British and Indians.
Singaporeans have retreated, accounting for just 20 per cent of purchases of more than $5 million in the six months to June 30.
Last year, they had 34 per cent of the market and 25 per cent in 2007.
Companies make up the rest of the transactions.
Experts say the increased interest from foreigners is not entirely surprising, due in part to the buzz created by the two integrated resorts and the country's growing strength as a financial hub.
Dennis Wee Group director Chris Koh said many see Singapore as the most stable country in the region, with a strong government, developed infrastructure and quality medical and educational services.
Mr Colin Tan, Chesterton Suntec International's research head, noted that the foreigner share has increased mainly due to the reduced interest from locals.
'In 2007, many of the locals bought into the high-end segment in a big way. Some might not have seen their prices recover yet and so demand is lower now,' he added.
SLP International research head Nicholas Mak said high-end homes have always depended significantly on foreign buyers.
Demand from Singaporeans could have fallen as those with bigger budgets might have decided to go into the landed home segment instead, which has recorded robust price growth of 31 per cent last year.
'Since 2007, the landed homes market has seen stronger interest, with Sentosa Cove prices influencing those on the mainland. Singaporeans see it as a lifestyle and investment choice and are starting to see more value in such homes,' added Mr Mak.
The luxury market - defined here as an elite club of projects that have achieved both unit prices of $3,000 per sq ft (psf) and total quantums edging past $5 million - has flatlined since last year.
There were 79 such homes sold in the first eight months this year while 73 were picked up in the same period last year. But go back to the boom of 2007, and 237 posh apartments found buyers in the same period.
Prices are also languishing about 6 to 8 per cent below their 2008 peak, despite the property boom that has seen all other segments surpass their historical highs.
Only around two dozen upscale projects made the elite club list of $3,000 psf and $5 million-plus pricing, including Nassim Park Residences, Tomlinson Heights and The Orchard Residences.
It was a foreign buyer who smashed the unit price record this year, picking up a 3,003 sq ft unit at The Marq on Paterson Hill for just under $6,400 psf - or about $19 million.
City Developments executive chairman Kwek Leng Beng said now is not the best time for luxury projects because sophisticated investors are waiting for the market to be more certain.
Transactions are few and demand is not as good as before, acknowledged Mr Kwek, who was speaking on the sidelines of a Real Estate Developers' Association of Singapore event on Friday.
esthert@sph.com.sg
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