As travel bans and lockdowns in separate countries deterred them from moving to the city-state, foreigners snapping up private apartments in Singapore declined to a 17-year low last year.
According to real estate consulting firms ERA Realty Network and OrangeTee & Tie, unit sales dropped to 742 last year. That’s the lowest since 2003, when 671 units were purchased by non-permanent owners, based on government data review as of Tuesday (Jan 26), which takes into account new, sub-sale and second-hand dwellings.
The two-month lockout last year in Singapore placed a halt to viewings and shuttered show-flats. Border controls are also largely in force globally as the nation relaxed virus curbs, stopping tourists from going to Singapore to buy units.
“For the luxury market, many buyers prefer to physically inspect the premises or visit a show-flat before making a purchase,” said Ms Christine Sun, OrangeTee & Tie’s senior vice-president of analysis and analytics. “Last year, many overseas buyers were not able to travel to Singapore to view properties in person which may have resulted in a dip in foreign purchases.”
According to government statistics collected by ERA Realty Network and OrangeTee & Tie, non-permanent tenant apartment transactions in 2020 accounted for only 4.1 percent of gross revenues, the lowest in more than two decades.
According to government statistics, Singaporeans actually constitute the largest proportion of customers. The share from that community grew from 2019 to 80.2 per cent last year by two percentage points.
“Anecdotally, we have also observed more Singaporeans reducing their overseas investments,” said Ms Sun, adding that many perceive the currency and economy of Singapore to be more resilient than other markets.
After keeping back in 2020, sales among foreigners could steadily pick up with vaccination roll-outs and developers launching more projects this year, said Nicholas Mak, head of research and consultancy at ERA’s APAC Realty unit.
That is focused on the presumption that, he added, the government is not issuing another round of cooling steps.
Sales and prices were driven up by a surge in interest among locals, sparking fears that the authorities may issue policy curbs. According to an article by DBS Group Holdings, one step that they might suggest is growing stamp duties for foreigners.
Though Chinese transactions declined to 215 last year from 339 in 2019, except those with permanent residency status, they are still flocking to Singapore because of its political, financial and legal stability, Mr Mak said.
For Chinese customers, “Singapore is seen as one of the most friendly nations” said Mr Mak. “Because the population of China’s middle class is so huge, just a tiny fraction of them buying apartments in Singapore can cause a surge.”