Singapore to see steady demand from Hong Kong property buyers

Victor KangJune 9, 2021

While the number of caveats lodged by Hong Kongers remains steady, some analysts have also pointed out that most Hong Kongers may have a bigger interest in UK properties given the new British National Overseas (BNO) system.

Singapore is expected to see a steady demand for property from Hong Kong buyers, following a record number of acquisition from such group in 2019 – when heightened civil unrest in Hong Kong forced buyers to look overseas for more stable business and political environment, reported The Business Times (BT).

“Anecdotally, we have been receiving ongoing enquiries from Hong Kong buyers about properties in Singapore. Many of these Hong Kong investors are looking at luxury homes in Singapore. There is a mix of enquiries for bigger properties for families and smaller ones for investment,” said Christine Sun, Senior Vice-President of Research and Analytics at OrangeTee & Tie, as quoted by BT.

Data from the Urban Redevelopment Authority’s (URA) Real Estate Information System (REALIS) showed that Hong Kongers purchased a record 53 housing units in 2019, up from 48 units in the previous year.

In 2020, caveats almost halved to 27 – when COVID-19 was declared a pandemic – and has now remained steady. Based on REALIS data, there were 93 caveats lodged by Hong Kong nationals from January 2019 to May 2021.

Hong Kongers purchased nine housing units in Q1 2021, down 18.2% from 11 units last year. A total of four units were also bought by Hong Kongers in April and May, which is the same amount transacted in Q2 2020.

However, Sun said the data may not tell the whole story since some Hong Kongers may not have indicated their nationality when they purchased a property. Notably, URA data has a “foreign (unspecified)” category for such caveats, said BT.

Huttons Asia Research Director Lee Sze Teck also pointed to the statement by the Hong Kong government in February that it does not recognise dual nationality. With this, he believes a year-on-year comparison cannot be made a full representation of the data since Hong Kong citizens may have acquired properties in Singapore under different nationalities in the past.

ERA Realty’s Head of Research and Consultancy Nicholas Mak said an operational air travel bubble between Singapore and Hong Kong would mean a considerable improvement in the COVID-19 situation in both areas.

Suggested read: Hong Kong Travel Bubble: Will This Affect the Singapore Property Market?  

However, some analysts have also pointed out that Singapore is not on the top priority list for most Hong Kongers, who may have a bigger interest in the UK given the new British National Overseas (BNO) system. Under this system, Hong Kong nationals and their families with BNO status may apply to live in the UK for up to five years.

“We have thus seen a surge in buying momentum in UK properties by Hong Kongers,” said Ms Christine Li, Head of Research for Asia Pacific at Knight Frank. According to Knight Frank, Hong Kong residents have bought US$1.3 billion worth of UK properties in the first nine months since the new visa was given in July 2020.

Additionally, foreigners are imposed with a hefty 20% Additional Buyer’s Stamp Duty (ABSD) when buying a property in Singapore. According to Mr Mak, purchases from Hong Kong buyers fell in Q3 2018 right after the government had implemented the cooling measures in the same year, but managed to rise again in Q2 2019 after the civil unrest within the country led many to look for a stable political and business environment to invest in.

During that period of Jan 2019 to May 2021, properties with a price range of $30,000 to $35,000 per square metre (psm) were the most popular, which saw 15 sales, according to REALIS data. This was followed by properties from $16,000 to $18,000 psm, and $18,000 to $20,000 psm, both of which had 13 sales each.

In absolute price, there were 21 units sold within $1 million to $1.5 million, followed closely by properties from $1.5 million to $2 million (19 units), and $2 million to $2.5 million (10 units).

22 of the units were in the Downtown Core planning area, while 10 in the River Valley, and eight in Geylang.

 

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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this story, email: victorkang@propertyguru.com.sg

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