Published June 7, 2007
Foreign purchases of subsale units hit 11-yr high
Indons lead buyers, followed by M'sians, Aussies, Brits and Indians
By KALPANA RASHIWALA
FOREIGNERS bought 241 private apartments and condos in the subsale market during the first quarter of this year, up 35 per cent from the preceding three months and the highest figure since 1996, according to DTZ Debenham Tie Leung's analysis of caveats captured by Urban Redevelopment Authority's Realis system.
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The 241 subsale condos/apartments foreigners purchased in Q1 2007 gave them a nearly 36 per cent share of the total of 673 non-landed private homes purchased in the subsale market during the quarter. This is a much higher share compared with foreigners' overall 27 per cent share of total private home purchases in the same period.
DTZ in its report suggests the increasing foreign subsale interest may mean that foreigners are turning to the subsale market to buy homes because they may have less access to high-profile launches in the primary market. 'However, of greater significance is the fact that it also reflects their confidence about the investment potential of quality projects in Singapore,' the study added.
Subsales, often seen as a gauge of speculative activity, refers to secondary market deals - properties not bought directly from developers - in projects yet to receive Certificate of Statutory Completion.
The Sail @ Marina Bay and Icon were among the projects that attracted relatively strong foreign buying in the subsale market in Q1. Foreign buyers accounted for 36 per cent, or 24 of the total 67 units at The Sail transacted in the subsale market in Q1 2007. Foreign purchasers also made up 25 per cent, or 18 of the 72 Icon units purchased in the subsale market. Other projects favoured by foreign buyers in the subsale market during the quarter included Sky @ Eleven in Thomson, The Cosmopolitan at River Valley/Kim Seng roads, Twin Regency at Kim Tian Road and Watermark at Robertson Quay.
DTZ observed that foreigners also upped their subsale purchases for high-end apartments/condos in the first three months.
At 26 per cent, Indonesians accounted for the lion's share of foreign buyers of subsale apartments/condos, followed by Malaysians (21 per cent share) Australians (10 per cent), United Kingdom nationals (8 per cent), Indians (7 per cent), Koreans (5 per cent) and US citizens and mainland Chinese (with 3 per cent share each).
Historically, the highest levels of foreign buying of subsale condos/apartments were recorded in Q4 1995 (485 subsales), Q1 1996 (329 subsales) and Q3 1996 (321 subsales).
The total 673 subsale apartments/condo deals (involving buyers of various nationalities including Singaporeans) in the first quarter was 18 per cent higher than the preceding quarter and just over six times the 111 subsale deals done in Q1 2006.
The latest subsale figure was 8 per cent shy of the previous high recorded in Q2 1999, when 735 non-landed private homes changed hands in the subsale market. The highest figure ever reported was 1,653 in Q2 1996, at the peak of speculative fever in the mid-nineties. The 673 caveats lodged for subsale apartment/condo deals in the first quarter made up 11 per cent of total caveats lodged for non-landed private homes (comprising both primary and secondary market transactions) during the period. During the first three quarters in 1995, subsales made up 30 per cent or more of deals.
The median subsale price fell 2 per cent quarter-on-quarter to $1,005 psf in Q1 this year. However, it was still 65 per cent higher than the $609 psf posted in Q1 last year.
DTZ's report also said the momentum in the subsale market is expected to keep up, particularly for high-profile projects, with likely support from foreigners increasingly positive about the potential of the Singapore residential property market. 'However, the subsale market is expected to be increasingly competitive as choices increase,' the firm added.
