The proportion of foreign property buyers in Singapore remains low, data shows.
With the Additional Buyer’s Stamp Duty (ABSD) and strengthening Singapore dollar, foreign demand for homes in Singapore remained muted even as private home sales soared 50 percent year-on-year during the first seven months of 2017, reported TODAYonline.
Data from Cushman & Wakefield showed that the proportion of foreign buyers dropped to a four-year low last year and remains at that level.
In H1 2017, just six percent of total purchases came from foreign buyers, down from nine percent in 2013, when house prices started to fall following the introduction of the Total Debt Servicing Ratio (TDSR) framework.
Chinese nationals emerged as the biggest group of foreign buyers, accounting for 29 percent – unchanged from four years earlier, revealed Cushman & Wakefield data.
The proportion of Malaysian buyers, however, slipped from 26 percent to 21 percent, while the proportion of Indonesian buyers fell from 17 percent to six percent.
“Although Chinese buying is steady, overall foreign buying is on a decline for several reasons. While the stringent stamp duty is certainly one of the key entry barriers, for Malaysian and Indonesian investors, a stronger Singapore dollar makes property a bit expensive here,” said Desmond Sim, research head at CBRE Singapore and South East Asia.
Cushman & Wakefield Singapore research director Christine Li believes that it will take some time for traditional buyers like “Malaysians and Indonesians to come back given the depreciation of their home currencies”.
“Going forward, Chinese buyers will be more inclined to buy in other markets such as Hong Kong and Australia because these markets allow PR status to foreign residents after they have lived in the country for a certain period,” she noted.