http://www.straitstimes.com/Free/Sto...ry_236822.html
May 13, 2008
Luxury home prices down 2.1%, says report
Number of foreign purchases fall; many buying homes in suburban areas
By Fiona Chan, Property Reporter
On the bright side, foreign buying islandwide stayed strong despite the softening housing market, it added.
Foreign buyers took up 28 per cent of private homes in the first quarter, up from 25.9 per cent for the whole of last year.
But the total number of foreign purchases fell, in line with the general slowdown in market activity. Foreigners bought only 901 private homes from January to March this year, less than half the 2,245 homes they took up in the same period last year.
Surprisingly, many of the homes they bought were well away from their usual stronghold of districts 9 to 11.
Savills' report showed that areas as far-flung as Changi and Hougang made it to the most-bought list, while traditionally foreigner-friendly areas such as Shenton Way dropped out of the top 10.
This could be because more of the foreign buyers now are expatriates living here with their families, rather than investors looking for prime assets, said Mr Ku Swee Yong, Savills' director of business development and marketing.
'Rentals are still holding up at high levels, and many expats who are more price-sensitive may now be converting from leasing homes to buying them,' he said.
'Some of these expats postponed buying homes last year, but now they could be taking advantage of the slowdown in the market to get a good deal.'
This would explain the foreign demand for suburban areas, as expatriates are likely to buy homes in neighbourhoods that have good schools or where they are currently renting houses.
Bolstering this theory is a sudden drop in the number of leasing transactions this year, said Mr Ku. Based on leases that were signed in 2006, there should be a lot more renewals this year than had actually taken place, he explained.
Savills expects private home prices to grow a moderate 5 per cent to 10 per cent this year.
[email protected]