Offshore demand for Singapore Properties

Offshore demand for Singapore Properties

Market OnTheRise


The number of foreigners interested in Singapore’s private residential units has gone up. The demand could be attributed to the capital gains which are deemed to be long-term. China leads in the foreign country’s quest for housing in Singapore.

An 11.7% increase in the demand has seen the number of Singapore Condominiums sold move to 782 in the year 2016 alone. The private residential units are the target for the foreign market. A report by a consultancy JLL shows that the 782 transactions do not include permanent residential housing units. Other major housing buyer groups apart from China include Indonesia, US and Malaysia.


China has grown in terms of wealth and the fact that the country is familiar with the residential market in Singapore. As a result, the Chinese have overtaken the Indonesians in the quest for the private residential houses in this country.


In total, the Chinese made 230 transactions which accounted for 29.4 % of the transactions in just 9 months. This was a drop by 13 transactions from the previous year. Indonesians followed at a distant 114 which accounted for 14.6% of all the transactions in this category.


What the buyers looked for

The 3 main buyers, that are, Chinese, Indonesians and Malaysians were guided by location, budget and unit prices. The Chinese preferred the Outside Core Regions (OCR) while the other two preferred the Core Central Region (CCR).The Indonesians were the biggest spenders with less or equal to $3 million while Chinese and Malaysians spent around $1.5 million.


The unit price, lastly, was a determinant. The PSF averaged $1400 for the Indonesians whilst the PSF for the other two averaged $750 to $1700.


In this regard, Malaysians transacted equivalent to 10.5% of the offs-shore transactions which was equal to 82 properties. Standing at 7.3% were Americans, who transacted 57 properties.


Top 10 foreign buyers

China leads the list with 230, followed by Indonesia, Malaysia, USA and India at the top positions. They transacted 114, 82, 57 and 22 respectively. The other 5 are Hong Kong (14), Switzerland (13), Philippines (11), Vietnam (11) and Canada with 10.


The introduction of 15% Additional Buyer Stamp Duty(ABSD) on Singapore properties by foreigners 3 years ago has led to a slump in demand. The ABSD is one of the cooling measures implemented by the government to  prevent formation of a real estate bubble in Singapore. Besides foreigners, the local and permanent residents are also affected by the cooling measure. In the past few years, the government has remained firm in its stand on keeping the cooling measures, this could have led to more homebuyers or investors being more decisive in their purchases since the cooling measures are unlikely to be tweaked or removed.


The number of property bought by US shot due to stamp duty exemption under a free trade agreement. . The levy, according to the government is for market stability. Chinese were noted for their preference for suburban houses as they were deemed affordable.



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