Foreign buying in Singapore’s property market has dwindled in 2015 compared to the previous year and in 2013, reported Singapore Business Review citing BNP Paribas’ trend analysis.
The report stated that the slowdown is due to currency weakness in Malaysia, Indonesia and China, the additional buyer’s stamp duty (ABSD) of 15 percent on overseas buyers, and the tighter immigration policy curbing foreign worker inflow.
In the first three months of 2015, foreign buying accounted for just 7.6 percent of total home transactions, down from 11.3 percent in Q1 last year.
“By sub-segment breakdown, homes transacted by foreigners in Q1 2015 accounted for 13.3 percent of (the) high-end segment, down from 17.4 percent a year ago (in Q1 2014). (A) similar trend happened in (the) mid-end (6.0 percent, down from 8.5 percent) and mass market (6.7 percent, down from 11.5 percent) segments,” said the report.
It noted that foreign buyers from Indonesia, China and Malaysia were “especially hit hard due to currency weakness”.
Nonetheless, Chinese nationals emerged as the top foreign buyers in Singapore in Q1 2015, followed by Malaysia and Indonesia.
“Given the slack in foreign buying, it becomes clear that the housing market needs to turn to local buyers for support,” added BNP Paribas.
But it isn’t confident of the strength of local support, given the ongoing credit tightening, easing of pent-up demand as well as prospects of rising interest rates – factors which tend to dampen local demand.