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Published November 8, 2006

22% of residential property deals are with foreign buyers


(SINGAPORE) Foreign buyers now account for 22 per cent of all residential property transactions here - an increase of 24 per cent from a year ago.

According to a report by Savills Singapore, 22 per cent or 3,143 of the 14,286 homes sold in the first nine months of the year were bought by foreigners. And the full-year figure is likely to be a record high, says Savills' director of marketing and business development, Ku Swee Yong.

The report does not break down foreign buyers into nationalities - but Mr Ku says Indonesians and Malaysians account for most of the transactions. Malaysians favour mid-market homes, while Indonesians are inclined to target the top end.

Mr Ku estimates that 25-40 per cent of new luxury homes launched in the past few months were bought by foreigners, helping to lift capital values in the segment by 10 per cent in Q3.

He is so bullish about the 'luxury' market that he believes prices will exceed $4,000 psf by 2010. So far, the highest price paid is $3,000 psf for a small unit at St Regis Residences.

Mr Ku reckons Singapore will continue to attract high net worth individuals from overseas, adding: 'I also believe more high net worth foreign investors' money will be managed here.' He says high-end prices will also rise because the supply of large apartments in the prime districts is diminishing.

Savills estimates that some 5,500 apartments will be removed from the market between 2006 and 2008 through collective sales. A significant number of these will be old but upmarket developments like Nassim Park.

Mr Ku says there is already a shortage of large apartments in the prime districts and points out that even in new developments like The Cosmopolitan, Newton Suites and Arc at Draycott, 'most of the units are less than 2,000 sq ft'.

Interestingly, he notes that about 50 per cent of those who benefit most from collective sales, such as that of Nassim Park, are likely to move out of the posh neighbourhood.