Mar 18, 2010

Sales of private homes up 130%

Singaporeans are the main drivers of surge last year

By Melissa Sim & Melissa Kok

DOWNTURN? What downturn?

Private home transactions - for both new and resale homes - jumped by more than 130 per cent last year, despite the downturn. Singaporeans were the main drivers of the surge: There was an overall rise of 144 per cent in private property transactions by them last year - 23,516 compared with 9,649 in 2008.

In the non-landed segment, Singaporean purchases rose almost 159 per cent. The rise in landed property purchases was nearly 83 per cent.

But comparatively lower prices here as a result of the credit crunch, the influx of expatriates and the attractiveness of Singapore property also led to more purchases by foreigners.

The number of purchases by foreigners, including permanent residents (PRs), rose 114 per cent overall last year - 6,798 compared to 3,176 in 2008. The bulk of the increase was in the non-landed segment, which rose from 3,036 purchases in 2008 to 6,610 last year - a jump of 118 per cent.

Landed properties showed a year-on-year rise of 34 per cent.

In terms of overall private property transactions, Singaporeans accounted for 76 per cent of all purchases. Foreigners and PRs made up about 22 per cent, with the rest going to companies and others, according to figures from the Urban Redevelopment Authority and DTZ Research.

Checks by The Straits Times showed that among the foreigners, Malaysians, Indonesians, and Chinese and Indian nationals were the most active in the property market. In particular, the proportion of Chinese and Indian nationals has shown a steep hike.

In 1999, they made up 6.6 per cent of total transactions by foreigners and PRs. That proportion grew to 27.3 per cent last year.

Experts said the rising number of purchases by foreigners could also be due to home prices here being more attractive than in cities like Hong Kong and Tokyo.

Ms Christine Sun, senior manager of research and consultancy at Savills Singapore, said: 'The opening of the integrated resort and the strength, resilience and stability of Singapore's economy during the recent downturn could also be plus points.'

She added that the boom came despite a poor economy. 'The market sentiment in the earlier part of 2009 was rather bullish. Many locals were buying due to pent-up demand, and PRs and foreigners could have ridden on the positive market sentiment and bought in as well.'

Mr Jeffrey Hong, executive director of HSR Property Group, said another reason for the rise in transactions was simply that there are more foreigners here.

Latest figures from the Department of Statistics showed there were 533,200 PRs and 1.25 million foreigners in Singapore as of last year, up from 449,200 PRs and one million foreigners in 2007.

Another reason foreigners are buying more homes is that to many, it makes more sense than renting.

Australian Justin Kwan, 26, a doctor who has lived here for more than a year, bought a Newton One condo unit last December. He did not want to go on paying $3,000 in rent, and said property prices were affordable.

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