Singapore increasingly attracting Chinese home buyers

Mainland Chinese bought private homes in Singapore at a record pace in the last quarter of 2010, according to data released recently by Singapore’s Urban Redevelopment Authority.

And with increasingly tough tightening measures being implemented in China, analysts say that more and more mainlanders will continue to invest in Singapore property.

Chinese citizens constituted a record 23 per cent of private home purchases in Singapore by non-Singaporeans, according to a quarterly by consultant DTZ reported on by the Today newspaper. They overtook Indonesians as the second-largest group of foreigner home buyers after Malaysians.

Chinese accounted for only 7 per cent of foreigners buying homes in Singapore in 2007.

“There’s a very large pool of Chinese buyers who need properties in Singapore for school, for coming here to work, for immigration purposes,” said Mr Ku Swee Yong, chief executive officer of International Property Advisor. “All these are a natural consequence of the efforts Singapore has put in to promote ourselves in China.”
Some analysts said that foreign buyers could negatively affect Singapore’s property market if they sell their properties quickly, but many said that the current level of foreign ownership was not worrying.

“Singaporean buyers still make up about 70 per cent of buyers,” said Ms Chua Chor Hoon, head of Southeast Asia research at DTZ. “Even if the foreigners were to pull out, it’s not going to cause a big drop in prices if the Singapore economy is doing well and locals still continue to buy.”

But the proportion of local homebuyers is falling. URA data shows they accounted for 72 per cent of all transactions last year, compared with 76 per cent in 2009.

Meanwhile, those who are upgrading from public housing are buying smaller private apartments. 

In 2009, only 32 per cent of buyers with HDB addresses had bought apartments smaller than 1,000 sq ft; last year, the ratio climbed to 41 per cent. This is due to high prices. “Small units slightly under S$1 million are the only types most HDB upgraders can afford,” said Ms Chua.