Singapore’s home sales soar in one of the world’s hottest real estate markets, driven by demand by Hong Kong, China investors, Singapore News – AsiaOne
Singapore sold more luxury homes to foreigners in three months ended June than any other quarter during the past 12 years, as Chinese and Hong Kong investors sought a safe haven to park their money amid the escalating US-China trade war and deteriorating public order in Hong Kong.
Up to 140 super luxury homes, those priced at more than $8 million, or $3,000 per square foot, were sold to foreigners in the second quarter, even with a 20 per cent additional buyer’s stamp duty imposed on foreign buyers.
“There has been a spike in that category and we suspect that a lot of them actually could be a mixture of Hong Kong residents and mainland Chinese,” said Alan Cheong, head of Savills Singapore’s research and consultancy.
“We have not seen those numbers (of foreigners buying super luxury homes in Singapore) since the first quarter of 2007.”
The record sales to foreigners underscore how the Lion City has become one of the hottest residential property markets on the planet, driven by Hong Kong and Chinese investors.
The property bull run has extended into the third quarter, as deteriorating public order in Hong Kong and a 20 per cent slump in home prices has driven capital southward to Singapore, with 110 super luxury homes already sold as of mid-September.
That is boosting confidence that the latest quarter could match, or even surpass the second-quarter’s sales.
Mainland Chinese investors were the biggest group of buyers across all market categories from 2017 until July this year, buying 1,058 private homes.
Hongkongers were the sixth-biggest group, buying 85 homes in the same period, with a clear preference for high-end apartments, according to the Urban Renewal Authority’s data.
“They feel that they need to hedge themselves [against risk] so they buy in Singapore, and the 20 per cent stamp duty is worth the cost,” Cheong said.
Singapore is often rated as the most liveable out of the 10 capital cities among the Association of Southeast Asian Nations, or ASEAN.
The city state’s education system is also one of the world’s best, with 52 international schools and universities such as the National University of Singapore, and Nanyang Technological University consistently ranking among top universities worldwide.
For those hoping to get a permanent residency, guidelines have been tougher.
Any individual making a substantial economic contribution or has been working at a certain period of time, may be able to permanently reside in Singapore.
The property market is likewise getting a lot of support from the locals, given their deep savings pool and their preference for real estate as a tangible form of investment while other options have shown lacklustre returns.
Each Singapore household is estimated to own $962,300 in liquid assets, according to Savills.
The Singaporean government sought to cool prices through a tax dating back to December 2011, which has been gradually raised to the current 20 per cent.
Foreigners’ home buying declined following the imposition of the stamp duty, whose latest increment was implemented in July 2018.
Except for bumps in 2016 and 2017, the number of houses bought by foreigners in Singapore had been on a general decline since 2012.
Singapore’s commercial real estate, exempted from the additional duty, is also a bright spot, as Hong Kong-based companies like the Far East Consortium International Limited and Gaw Capital had been snapping up projects in recent months.
Singapore “remains one of the few magnets at the top for global capital allocations,” said Desmond Sim, CBRE’s Southeast Asia head of research.
In July, Gaw and Allianz Real Estate bought part of Duo Tower, a mixed-use development in Singapore for S$1.6 billion.
Hong Kong-listed Far East disclosed that its Dorsett Hospitality International Limited unit is part of a group that acquired the hotel Oakwood Premier OUE Singapore, which includes a mixed-use development comprising two high-rise towers with offices and retail space.
This article was first published in South China Morning Post.
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