Cooling Measures Deter Foreign Home Buyers

Cooling measures deter foreign home buyers

Last December's cooling measures have continued to deter overseas buyers from the property market.

Foreign purchases made up just 7 per cent of the private market in the three months to Sept 30, well down from their 18 per cent share for the whole of last year.

The trend was equally evident over the first nine months of the year with only 6 per cent of purchases coming from foreigners.

There were just 504 purchases by non-permanent resident foreigners in the third quarter, with eight being for landed home sales.

Suburban project Bartley Residences topped the table with 18 sales to foreigners while city fringe development One Dusun Residences and V on Shenton, in the central business district, were tied for second with 14.

Other mass market projects also enjoyed keen interest from foreign buyers, including Hillsta in Choa Chu Kang, Parc Centros in Punggol, The Palette in Pasir Ris and My Manhattan in Simei.

While sales are down from a year earlier, interest from some nationalities seems to be creeping back with the market share of mainland Chinese buyers - including permanent residents (PRs) - climbing again.

After an initial sharp pullback in the first quarter as the additional buyer's stamp duty (ABSD) of 10 per cent for all foreign purchases hit, mainland Chinese buyers overtook Indonesians in the third quarter to clinch second place after Malaysians.

Including PRs, Chinese buyers accounted for 22 per cent - or 397 units - of all purchases made by non-Singaporeans in the three months to Sept 30. This is below the 28 per cent recorded by this group for the whole of last year.

Purchases by Americans also received a boost after the ABSD was implemented as they are one of the five nationalities exempt from the extra 10 per cent tax.

Americans bought 10 homes in the exclusive Sentosa Cove estate this year - Chinese buyers snapped up eight - to become the top non-Singaporean buyers group there.

This is a striking increase from 2010 and last year when only four Sentosa Cove purchases were made in total by Americans.

The cooling measures last December slapped a 10 per cent ABSD on all home purchases by foreigners.

PRs had to fork out an extra 3 per cent on their second and subsequent home purchases, while Singaporeans had to do so only for their third home on.

There was increased demand for landed homes above $5 million, particularly in the $5 million to $10 million price band.

More good class bungalows and Sentosa Cove houses were bought in the third quarter compared with the three-month period before.

Source: The Straits Times –20 November 2012