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Even as wealth flows into S’pore, number of private homes bought by foreigners continues to shrink
The Straits Times, 14 September 2024, Saturday
SINGAPORE – Singapore’s property market has seen a significant drop in foreign buyers over the past year, even as global wealth continues to accumulate in the city-state.
From May 2023 to April 2024, only 321 condominium units were sold to foreigners, down from 1,054 units in the previous 12 months, according to Urban Redevelopment Authority (URA) data. This was an average of about 26 units per month. From May to August 2024, 88 units were sold, averaging only 22 a month. Property experts attributed the decline largely to the 60 per cent additional buyer’s stamp duty (ABSD) imposed on non-residents, which has significantly curbed foreign investment, particularly in high-end residential properties.
Despite the regulatory constraints, Singapore continues to attract wealthy individuals. In 2023, 3,400 high-net-worth individuals relocated to the city-state, according to investment migration consultant Henley & Partners’ 2024 World’s Wealthiest Cities Report. This brought Singapore’s total number of resident millionaires to 244,800, along with 336 centi-millionaires – individuals whose wealth is at least US$100 million (S$130 million) – and 30 billionaires. The number of single-family offices, which manage the investments and financial affairs of a wealthy family, in Singapore surged from 400 in 2020 to 1,400 by the end of 2023. While China remains Singapore’s largest source of new wealth inflows, the latter holds about 25 per cent of all Indian cross-border wealth, making it the top centre in the region for Indian wealth, according to management consultancy Boston Consulting Group’s Global Wealth Report 2024.
Optimism remains among some market players that foreign capital will eventually flow back into the luxury residential sector here. Singapore managing director believes in the long-term potential of Singapore’s luxury market, despite the challenging regulatory landscape. He said: “Paradoxically, these tighter regulations make this market all the more attractive to us.” The attractiveness of Singapore’s real estate market stems from the Government’s proactive measures to maintain sustainability and prioritise housing for owner occupation, protecting the market from volatility, Mr Bedi explained. He added that high-net-worth individuals tend to prioritise capital preservation over high returns, and Singapore offers a secure, stable investment environment. The firm primarily targets properties starting from around $5 million, such as high-end condominiums and single-family homes, or standalone properties.
A market researcher believes that Singapore’s safe-haven status and reputation for wealth preservation may outweigh the higher costs of property acquisition. She noted that ultra-high-net-worth individuals drawn to Singapore can mitigate the ABSD by obtaining permanent residency or citizenship, which offers more favourable tax rates.
Permanent residents (PRs) pay 5 per cent ABSD on their first property, while citizens face 20 per cent ABSD only on their second property. While there may be optimism about long-term growth in the luxury residential sector, others believe the current regulatory environment could delay a resurgence in foreign demand. Another market researcher said family offices are unlikely to drive a resurgence in luxury real estate, as they face a 65 per cent ABSD on residential property purchases. “Most family offices are instead channelling their investments into commercial properties, where ABSD does not apply,” she said. She noted that Minister of State for Trade and Industry Alvin Tan told Parliament in May 2023 that Singapore-based family offices have had virtually no impact on the private housing market, as they had not bought any residential property in the previous six years.
Data from a property agency noted that foreigners (non-PR) accounted for 4.7 per cent of the landed and non-landed private homes transacted on the new sale and resale market in 2024 as at Sept 3. The data was derived from URA’s Realis caveat database. The market researcher added that any significant recovery in the luxury market would depend on changes to the ABSD. “At the moment, few foreigners are willing to fork out the 60 per cent ABSD to buy a residential property here, especially if the price quantum is high,” she said. She also noted that under free trade agreements, citizens and PRs of certain countries, including the United States and Switzerland, receive the same stamp-duty treatment as Singapore citizens, making them potential buyers.
In fact, Americans have surpassed Chinese buyers in the number of non-landed new and resale private home transactions in Singapore, in terms of caveats lodged, said the researcher. In 2023, Americans accounted for 91 transactions, compared with just 17 transactions by Chinese buyers, a trend that has continued into 2024. Mr Manish Tibrewal, co-founder of multi-family office Farro Capital, believes foreign interest in luxury real estate in Singapore will remain subdued in the short term, pointing to the strong competition from cities such as Dubai, London and New York. While there has been renewed interest in Singapore’s good class bungalows among local family offices, Mr Tibrewal said that most foreign investors avoid residential property purchases due to the high ABSD. Mr Mandeep Nalwa, group chief executive of wealth management firm Taurus Wealth, agreed, saying that given the high ABSD rates, many foreigners are redirecting their investments into other asset classes, such as commercial properties.
However, foreign interest in Singapore properties remains strong, he noted. Foreigners who set up their businesses or family offices here are increasingly seeking to change their residential status to become citizens or PRs, he said, and when successful, they will look at buying luxury real estate.
Rise in foreign buying of luxury homes in Singapore in Q2 a sign of market thawing after cooling?
The Business Times, 4 September 2024, Wednesday
FOREIGN buying of Singapore luxury homes is slowly on the rise again, after steep hikes in stamp duties all but smothered the market last year. But it is still too early to say if a fresh wave of wealth is descending on the island, given current economic uncertainties and still-tight home-purchase restrictions for foreigners, said analysts.
Figures from Savills Singapore showed that in the second quarter of 2024, foreigners (excluding permanent residents) bought 47 non-landed homes in the Core Central Region (CCR) – a market segment often seen as a proxy for high-end and luxury property. In comparison, this group of buyers bought 21 units in the previous quarter. Alan Cheong, Savills Singapore’s executive director of research and consultancy, noted that while demand was significantly lower than that shown by Singaporeans and permanent residents (PRs), the share of foreign buyers nearly doubled to 6.7 per cent in Q2, from 3.4 per cent in Q1. This was also the first quarter-on-quarter rise after four straight quarters of contraction between Q2 2023 and Q1 2024, he noted.
In April last year, the government doubled the Additional Buyer’s Stamp Duty (ABSD) for foreigners purchasing any residential property to 60 per cent. Demand from foreigners – who typically account for a larger share of sales in the prime CCR than in the city fringe and suburban areas – evaporated as a result, and has yet to recover. Caveats data showed that in Q2, foreigners made 82 non-landed residential transactions, less than a third of Q1 2023’s 264 transactions before the higher ABSD was rolled out.
An analyst pointed out that some ultra-high-net-worth individuals (UHNWIs) prefer to maintain a low profile and may not lodge caveats on their purchases. “So even though the caveats showed a downward trend, it is not a true reflection of the demand,” said Lee. For one, UHNWIs are seeking a stable and politically neutral haven such as Singapore, given that geopolitical tensions are not abating, he said. The 60 per cent ABSD is, in some quarters, viewed as a “safety premium” to live in the city-state. Lee also noted that the 60 per cent ABSD, spread over a holding period of 10 to 15 years, translates to a compound annual growth rate of 3.2 per cent to 4.8 per cent – similar to price gains in the CCR from Q2 2009 to Q2 2024.
Other industry watchers said interest in luxury housing has grown, despite the current market conditions. List Sotheby’s International Realty executive director Lewis Cha said there were more transactions for bungalows in Good Class Bungalow (GCB) areas in the first two months of Q3 than in either Q1 or Q2. While GCBs can only be purchased by Singapore citizens, recent GCB buyers have tended to be new citizens or those from the second or third generation of local wealthy families, he said. Those figures do not include some reported deals for which no caveats were lodged, he said. For instance, two adjoining freehold bungalows on Belmont Road were sold in July for S$131.4 million or around S$3,000 psf on land area. The buyer was Jennifer Tzelee Teo, a Singapore citizen in her late 40s who is linked to Zhang Lei, the founder and chairman “of East Asian heritage” private equity firm Hillhouse Investment. Luxury apartment buyers, for the most part, are new PRs seeking larger (2,000 to 4,000 square feet) CCR condominiums for their own homes, said Cha.
Knight Frank research head Leonard Tay pointed out that the total value of luxury non-landed transactions in the first half of 2024 was S$736.7 million, up 28.2 per cent from the previous half-year’s S$574.7 million. Transaction volume grew 36.1 per cent to 98 units in H1 2024, from 72 in H2 2023, as more Singaporean buyers sought family-sized, ready-to-move-in units, said Tay. “A key point that is often overlooked is that the majority of demand in recent years has come from Singaporeans and PRs, not just foreign buyers,” said joint managing directors Harmeet Singh Bedi and Himmat Singh at Christie’s International Real Estate Singapore.
The auction house’s luxury property arm, which exited the Singapore market in early 2019, has returned, opening an office two weeks ago as part of its plans to expand in South-east Asia. High-net-worth individuals are “still willing to navigate the additional costs to invest in such a prestigious and stable environment”, said Bedi and Singh.
Beyond homes
Besides residential properties, the analyst said global UHNWIs are keen to invest in commercial assets such as offices and shophouses. No ABSD is payable for commercial property. These properties sometimes house their businesses or family offices, said Nicholas Keong, head of residential and private office at Knight Frank. Chia Siew Chuin, head of residential research, research and consultancy at JLL, noted that between 2020 and 2023, single-family offices more than tripled in number to 1,400, from 400. JLL Singapore country head Chris Archibold added that Singapore may attract more global interest in the future, as it climbs the ranks in real estate transparency. The city moved up a spot to place 13th in JLL’s latest Global Real Estate Transparency Index, joining the most highly transparent markets for the first time. Singapore “is also one of the world’s most liquid listed property sectors, accompanied by robust corporate governance and information disclosure standards”, he said.
Nonetheless, Cheong from Savills suspects that any return of foreign UNHWIs to Singapore’s real estate market is likely at an incipient stage. “Activity in the shophouse, retail and strata office markets are still at a low after the February 2023 crackdown on the group of money launderers,” said Cheong. “It’s still early days for all sectors. But the residential sector appears to be showing the first signs of thawing.”
In its 2024 Wealth Report, Knight Frank noted that even though Singapore has seen “great success” in building its ultra-wealthy population, coaxing them to invest locally presents another challenge altogether. “Though family office numbers have risen in Singapore, the link to direct spending and investing is not clear-cut,” it said.
HDB mature estate prices dip in August, million-dollar deals slide amid Ghost Month lull: SRX, 99.co
The Straits Times, 5 September 2024, Thursday
SINGAPORE - The resale prices of HDB flats in mature estates fell 0.2 per cent on the month in August, while million-dollar flat sales declined amid a lull due to the Hungry Ghost Month.
Overall resale prices posted a 0.5 per cent month-on-month increase, as prices continued to rise 1.2 per cent in non-mature estates, indicated flash estimates from SRX and 99.co released on Sept 4. This marks a 7.5 per cent year-on-year increase for overall HDB resale prices. The smaller increase could be due to more flats being sold without a cash over valuation, one market observer said. Sales volume fell in August, as the Hungry Ghost Month kept buyers at bay. It fell 14.6 per cent to 2,605 units in August, from 3,049 flats in the previous month. Despite this, August resale volume was 5.3 per cent higher on the year.
The seventh lunar month, which started on Aug 4, is known as the Hungry Ghost Month and considered inauspicious for property purchases. Home buyers could have postponed their purchases as a result, noted an analyst. The number of million-dollar flat sales made up 4 per cent of the total resale volume in August, with 104 units sold. This marks a decrease from the 120 million-dollar flats transacted in July. In August, Bukit Merah recorded 12 million-dollar flat sales. Bishan and Kallang/Whampoa followed, with 11 such transactions each. Ang Mo Kio sold 10 such units.
Resale prices across room types were mixed. Prices for three-room flats and five-room flats each edged up 0.8 per cent on the month, while executive-flat prices rose 1 per cent for the same period. Meanwhile, four-room prices recorded a 0.2 per cent month-on-month decrease. By room type, four-room flats were the most popular in August, accounting for 43.4 per cent of total volume. More than half (60.5 per cent) of resale flat transactions were from non-mature estates. Both mature and non-mature estate prices posted a year-on-year increase of 6.3 per cent and 8.2 per cent, respectively. Three-room flats had the highest year-on-year increase in resale prices at 8 per cent. This was followed by four-room flats at 7.5 per cent, five-room flats at 6.8 per cent and executive flats at 5.7 per cent.
Market watchers agree that recent cooling measures had limited impact on August’s resale market. However, they noted that the effects of the restrictions could be more clearly observed later in the year. Mr Mohan Sandrasegeran, head of research and analytics at Singapore Realtors, said it takes about eight weeks to process and complete a resale application. Market data in October and November this year will start to reflect August’s finalised deals.
In August, the Ministry of National Development announced new restrictions on HDB loans for flat buyers to cool the public housing resale market. The loan-to-value (LTV) ratio for HDB loans was lowered to 75 per cent from 80 per cent for completed resale applications received by HDB on or after Aug 20, and to Build-To-Order applications from the October 2024 exercise onwards. Ms Wong Shanting, ERA Singapore’s head of research and market intelligence, said: “This may lead to a marginal decline in transaction volume in the coming months. The change is likely to affect buyers who had intended to maximise their leverage.” Buyers, who need to consider a higher cash outlay and are shrinking their housing budgets, might take longer to rework their finances. However, this is unlikely to affect the market significantly, Ms Wong noted.
The highest transacted price for a resale flat was $1.48 million for a five-room unit in Cantonment Road. In non-mature estates, the most expensive flat resold was a five-room apartment in Punggol Field, which fetched about $1.22 million.
Still, analysts disagree on how the cooling measures will affect the volume of million-dollar transactions in the resale market. The analyst said: “Million-dollar transactions may not experience a big impact, as many buyers may not be taking HDB loans. Some may have deep pockets and are not affected by the drop in LTV.” However, another analyst noted that the tightening of the LTV limit could crimp the sales of pricey resale flats at the top end of the market, with buyers having to fork out the difference. There could be a slight pullback in million-dollar resale transactions in the near term, as prospective buyers weigh their options and review their sums, she added. Demand for HDB resale flats in 2024 is expected to remain strong, the market observer noted. With a tight supply of five-room and larger flats in Singapore’s central region, buyers might be left with little choice but to fork out at least a million dollars, he said.
Bukit Sembawang prices 8@BT from S$2,530 psf
About half of the 158-unit condominium are one- and two-bedroom units
The Business Times, 7 September 2024, Saturday
By Samuel Oh
BUKIT Sembawang Estates will start previews for its Upper Bukit Timah project 8@BT on Saturday (Sep 7), with prices starting from S$2,530 per square foot (psf). About half of the 158-unit condominium are one- and two-bedroom units. The size for one-bedroom units ranges from 517 to 592 square feet (sq ft). Two-bedroom units are from 624 to 829 sq ft. Meanwhile, three bedders are from 1,001 to 1,270 sq ft, and four-bedroom units are 1,356 to 1,593 sq ft in size. The development also offers two penthouses of 1,356 sq ft and 1,593 sq ft in size.
Located in District 21, the 99-year leasehold project sits on 49,633 sq ft of land acquired at a state tender in 2022 for S$200 million, at S$1,343 per square foot per plot ratio (psf ppr). The condo’s units will be housed in two 20-storey blocks.
Lisa Goh, general manager (marketing and sales) at Bukit Sembawang, said: “We are confident that 8@BT will appeal to a wide range of buyers – from young couples to families and right-sizers – owing to the unmatched location, strong growth potential of the estate, and unique pure residential proposition.”
Marketing agencies expect the modestly-sized project to be well-received, with its location in an established residential enclave in the Rest of Central Region and close to the Bukit Timah nature reserve. Projects that are nearby include Far East Organization’s The Reserve Residences, which sold 520 out of 635 units at launch in May 2023 at an average price of S$2,460 psf. Also in the vicinity is The Linq@Beauty World, which sold 96 per cent of its 120 units at launch in November 2020 at an average price of S$2,150 to S$2,200 psf.
Chia Siew Chuin, JLL’s head of residential research, noted that from June to August, only two major projects – both suburban Outside Central Region condos – were brought to market. SingHaiyi’s Sora in Jurong sold 23 per cent of its 440 units at launch, while Hong Leong Holdings’ Kassia in Tampines sold 52 per cent of its 276 units over their respective launch weekends in July. Caveats data showed the latest median price achieved was S$2,152 psf for Sora and S$2,049 psf for Kassia. UOL is set to launch the private preview for its freehold Meyer Blue development on Sep 21. The East Coast project will have 226 units, ranging from two to five bedders and two penthouses. UOL holds an 80 per cent stake in the residential project, with Singapore Land (SingLand) holding the remaining 20 per cent. UOL and SingLand bought the 96,672 sq ft site in an en bloc purchase of the Meyer Park condo in February 2023 for S$392.2 million or S$1,668 psf ppr. City Developments is also expected to market Union Square Residences this month. The Havelock Road project, a redevelopment of CDL’s Central Mall and Central Square site, will yield 366 units and is part of the mixed-use development, Union Square.
The flurry of new condo launches comes after a hiatus during the Chinese Hungry Ghost month, which is seen as inauspicious for new home launches. Sales booking for 8@BT will start on Sep 21, with the project expected to receive its Temporary Occupation Permit in the fourth quarter of 2027.
Source: https://www.businesstimes.com.sg/property/bukit-sembawang-prices-8bt-s2530-psf
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