Published June 5, 2007

Foreigner home buys hit record in Q1

Corporate purchases of private units also at new peak


(SINGAPORE) Companies and foreigners upped their share of caveats lodged for private home purchases in the first quarter of this year, according to an analysis of caveats by estate agents DTZ Debenham Tie Leung.

Companies accounted for 8 per cent, or 538 of the total 7,042 caveats lodged for private homes in the first quarter of the year, up from a 6 per cent share in the preceding quarter.

The 538 homes that companies bought in Q1 this year is an increase of 15.2 per cent from the preceding quarter and the highest quarterly figure ever captured by the Urban Redevelopment Authority's Realis caveats data, which go back to Q1 1995.

During the height of the last major bull run in Q2 1996, companies bought 462 private homes while the figure for Q3 1999, a year that saw a short-lived property rally, was 413.

Companies include both entities incorporated in Singapore and overseas and these buyers would include property funds as well as high-net-worth individuals who set up offshore companies to purchase properties for tax or confidentiality reasons, suggests DTZ executive director Ong Choon Fah.

Some of the caveats for private homes lodged by companies are for collective sale deals.

Among the caveats lodged by companies in the first quarter were 35 caveats for Amaryllis Ville, 24 for The Fernhill, 12 for Water Place and 11 for Marina Bay Residences.

Mrs Ong expects corporate buyers like funds to continue growing in importance as private residential property buyers. 'Traditionally, overseas property funds buy offices in Singapore, but with opportunities becoming more limited, they will increasingly turn to the residential sector,' she added.

DTZ's analysis of caveats lodged for private homes captured by the Realis system also shows that foreigners (including permanent residents) snapped up 1,938 private homes in the first three months of this year.

While this is up just marginally from the 1,934 caveats lodged by foreigners in the preceding quarter, it is nonetheless the highest level of foreign purchases in a quarter ever captured by Realis.

Foreigners also upped their share of private home purchases to 27 per cent in Q1 this year, a figure that has been previously surpassed on just one other occasion. That was in Q4 1995, when foreigners accounted for 32 per cent or 1,534 of the total 4,781 caveats lodged for private homes.

DTZ also observed that while the number of private apartments and condos that foreigners bought from developers in the primary market declined 21 per cent quarter-on-quarter to 540 in Q1 2007, the number of apartments/condos foreigners picked up in the secondary or resale market rose 13 per cent to 1,315 over the same period. 'This was the largest number of resale apartments that foreigners purchased in a quarter. Foreigners accounted for a 32 per cent share in overall resale condos/apartments transacted. This trailed only Q4 1995, when the share was 48 per cent,' DTZ said.

'Unlike new projects, private homes in the secondary market are usually ready for lease. This therefore attracts foreign investors who wish to have a share in the current buoyant leasing market. Similarly, resale properties are valued by foreigners who are new in Singapore and require immediate accommodation. There are also some who have received permanent residence and are keen to own residential properties, partly as rents have been rising,' DTZ observed.

Projects that saw a high percentage of caveats lodged by foreign buyers in the secondary market in Q1 included Costa del Sol, Caribbean at Keppel Bay, The Nexus, Cuscaden Residences, Pebble Bay and Leonie Gardens. Districts 10, 9 and 15 were the three most popular locations for foreigners who bought condos and private apartments in the secondary market in Q1.

As for foreigners who purchased condos/apartments directly from developers in the primary market, the three most sought-after districts in Q1 were 9, 10 and 11, followed by 15 and 1.

Tribeca, Residences @ Evelyn, RiverGate, St Regis Residences, Waterfall Gardens and Marina Bay Residences were among the projects that saw a high proportion of foreign buying in the primary market in Q1.

The 540 condos/apartments that foreign buyers purchased from developers in Q1 accounted for 28 per cent of developer sales of non-landed homes during the period.

Indonesians and Malaysians continued to be the largest groups of foreign buyers of overall private homes in Q1 this year, accounting for 21 per cent and 19 per cent respectively of caveats, followed by buyers from India, with a 14 per cent share. Indian nationals picked up 275 private homes in Q1 this year, an increase of 13 per cent from Q4 last year.

Buyers from the United Kingdom were the fourth-largest home buying market in Q1 (9 per cent share) followed by mainland China (5 per cent). Australians lodged caveats for 100 private homes in Q1, up 15 per cent from the preceding quarter. Koreans also continued to increase their investments in private residential properties in Singapore, picking up 96 homes in Q1, reflecting a 30 per cent quarter-on-quarter increase and a 380 per cent year-on-year jump.