Published June 14, 2006

Private property purchases by foreigners down in Q1
24% q-o-q drop in line with 18% decline in total transactions


AFTER surging to a 10-year high in the fourth quarter of last year, the number of private homes bought by foreigners (including permanent residents) in Singapore declined 24 per cent quarter-on-quarter in Q1 2006 to 815, latest research by DTZ Debenham Tie Leung shows.

But foreign buyers still accounted for a substantial 21 per cent of all private home purchases in Singapore during the first three months of this year - slightly below their 22 per cent share for the whole of last year.

Compared to the same period last year, there were 50 per cent more foreign buyers in Q1, according to DTZ's analysis of caveats captured by the Urban Redevelopment Authority's Realis system.

Market watchers are not really surprised by the decline in foreign buying in the January to March quarter of this year, which they said was in line with an 18 per cent decline in total transactions of private homes in Q1. DTZ attributed this to the festive period drawing people away from visiting showflats.

As well, market watchers noted that there was a dearth of high-end property launches in the first quarter like St Regis Residences - which was released in Q2 - and this may also have been a factor for the quarter-on-quarter drop in foreign buying seen in Q1.

Continuing last year's trend, Malaysians and Indonesians continued to account for the chunk of foreign buyers in Q1, with respective shares of 23 per cent and 22 per cent.

They were followed by buyers from India, with a 9 per cent share, and mainland China and the United Kingdom, each with 8 per cent.

DTZ reiterated that the profile of foreign buyers has become more international since late 2004 following the launch of waterfront condos like The Berth By The Cove and The Sail @ Marina Bay, which attracted foreign buyers who were traditionally unacquainted with the local residential market.

'Some of these projects draw not just the usual Indonesians, Indians, mainland Chinese and Hong Kongers but also Americans, Irish, Australians, Russians and Taiwanese,' a seasoned property agent notes.

DTZ's report also showed that of the 1,160 developer or primary market sales of private apartments and condos in Q1, foreigners accounted for about a fifth, totalling 234 transactions. This share reflects a five-percentage-point quarter-on-quarter decline but was moderately high among the quarters following the Sars period, DTZ notes.