Non-PRs beat PRs in home-buying spurt

Published 28 January 2011
The Business Times
By Kalpana Rashiwala

Trend reflects Singapore’s place as globalised city and investment centre: analysts

As more condos and apartments are being bought by foreigners, analysis shows that the increase in the number of homes being bought by non-permanent residents is outpacing that of their PR compatriots.

Who's buyingIn a trend led by Chinese and Indian nationals, the number of non-landed private homes picked up by foreigners who were not PRs jumped 37.1 per cent last year to 3,988 units – compared with the 12.1 per cent rise to 4,317 of such homes bought by PRs, shows an analysis of URA Realis caveats data by Knight Frank.

Market watchers say this reflects Singapore’s ongoing transformation into a more globalised city and investment market.

The study shows a 90.4 per cent jump in the number of apartments/con- dos bought by Chinese nationals who were not PRs to 817 last year – against a 31.5 per cent increase in the number of such homes picked up by Chinese citizens who were Singapore PRs last year to 794 units.

It was a similar trend among Indian citizens who acquired non-landed homes in Singapore in 2010. Those who were not PRs posted an almost 50 per cent upsurge in the number of units bought last year to 238 – compared with a 16 per cent rise in the number of such units bought here last year by Indians who were PRs to 788.

‘China and India are clearly the economic powerhouses of the world and Singapore has always been seen as an attractive country to invest in, due to transparency of law, absence of capital gains taxes and no entry barrier for apart- ment/condo purchases,’ said Knight Frank chairman Tan Tiong Cheng.

The trend of bigger increases in non-PR foreign buying of non-landed private homes in Singapore is expected to continue, predicts Ong Choon Fah, head of consulting & research (SE Asia) at DTZ. ‘As Singapore becomes a more international, vibrant place with more entertainment and other attractions, it is being seen as a more desirable place to live in, and for a second home,’ she adds.

Knight Frank’s analysis also showed substantial percentage increases in the number of condos/apart- ments here bought last year by UK citizens – both PRs and non-PRs.

The number of units picked up by UK citizens who were not PRs increased around 58 per cent to 185 units, while the number of units bought by Brits who were PRs here rose 48.5 per cent to 153.

Mr Tan suggests that some British expats may be moving to Singapore from Hong Kong, which is becoming too expensive and suffers from air pollution. ‘Some Brits may also have decided to move out of the UK to Singapore, where the weather is warmer, the cost of living and taxes lower, and more opportunities abound.’

Combining PR and non-PR foreigners, Chinese citizens overtook Indonesians to emerge as the second biggest group of foreign buyers of apartments and condos in Singapore last year. They lodged a total of 1,611 caveats last year, ahead of the 1,555 caveats by Indonesian buyers. However, Malaysians held on to their pole position, with 1,858 caveats. Indian and UK citizens maintained their fourth and fifth positions with 1,026 and 338 caveats lodged respectively.

Knight Frank also uncovered a divergence in buying preferences for non-landed homes between PRs and non-PRs within some nationalities last year.

For instance, Malaysians who are PRs here preferred suburban locations like Districts 14 (which includes Eunos and Geylang), 18 , 19 and 23 . On the other hand, their compatriots who are not Singapore PRs here tended to zoom in on ‘investment-grade’ locations – like Districts 4 (which includes Sentosa Cove), 9, 10, 11 (Singapore’s traditional prime districts) and 15 (which includes the Meyer Road and Katong vicinity).

‘Perhaps Malaysian buyers who are Singapore PRs and working here have smaller budgets or may want to settle down here. So they’re looking for a home in the suburbs, while the Malaysians who don’t live here are more likely to buy a Singapore residential property for investment,’ Mr Tan suggests.

There was also some evidence that Singaporeans had a higher propensity to buy small-format apartments than foreign buyers. In District 15, where many shoebox developments are being built, about 46 per cent of Singaporean buyers last year picked up units priced between $500,000 and $1 million.

In contrast, only about 29 per cent of PR buyers and 21 per cent of non-PR foreign buyers purchased units in this price range.

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