Citizens From New Markets Among Buyers Of Top Condos Here

Singapore Property Agent Career Options

The property cooling measures implemented back in July 2018 have dampened general home-purchasing demand in Singapore. However, in the high end condominium market, foreign buyers may have displayed more resilience. Therefore property agents who are building their careers on this market will have done better than their counterparts.

From data shown in a Urban Redevelopment Authority’s (URA) Realis report done by ERA Research & Consultancy, the figures of non-landed private housing units in the Core Central Region (CCR) purchased by Singaporeans fell by some 38% to 2,427 units after the measures, while that for foreign purchasers, including permanent residents, only dropped by about 30% to 1,264 units. Residential transactions by firms shrank by nearly 66%, from 142 units to 49 units.

The ERA report included sales transactions for non-landed residential units in the CCR, which is defined to includes Districts 9, 10 and 11, Downtown Core and Sentosa Cove. It excludes any executive condominiums. It took into comparison data for the 18 months before the cooling measures (from January 2017 to June 2018) and the same number of months after the measures (July 2018 to December 2019) It data included permanent residents as foreigners too.

Throughout the country, the volume of private residential units transacted declined about 23% from 32,866 units prior to the market curbs to 25,270 after the implementation. Singaporean purchasers dipped by 20% and foreigners slumped 32%. Thankfully, Avenue South Residence was the saving grace for 2019, as it sold over 300 units at its launch at the end of 2019. That is why UOL is confident to preview The Watergardens At Canberra Showflat soon, to showcase the benefits of this development.

Other than stricter loan-to-value ratios on overall home purchases, the recent wave of curbs included higher additional buyer’s stamp duty (ABSD). The ABSD for Singaporean citizens getting a second residential property went up from 7% to 12%, while those buying their third and subsequent real estate have to pay 15% tax, and increase from the earlier 10%.

Permanent residents (PRs) have to fork out 15% ABSD for their second and subsequent properties, and foreign buyers and companies have to pay 20% ABSD on any residential property.

Narrowing down to the luxury residences segment, the ERA report mentioned that “foreign purchasing demand was better resilient than local demand in the midst of the current cooling measures”, prompting that the few foreign purchasers who were willing to fork out the higher ABSD were actually high net worth individuals keen only on luxury homes. Real estate salespersons with a good property agent mentor would have captured this market early on and already made their mark.

“Foreign purchasing demand in the luxury residential property market defied the cooling measures more than other sectors of the property market, displaying the healthy underlying demand for prime properties by foreign homebuyers,” highlighted the same report.

In absolute terms, “Singaporeans have always formed the biggest group of purchasers for luxury homes locally, even after the cooling measures imposed in 2018”, the report stated.

The percentage of local buyers of non-landed residential units in the CCR was around 65% in the July 2018 to December 2019 period, as compared to 34% for foreigners and slightly over 1% for firms.

On a different note, some experts noted that since lodging a caveat is optional – for example, in a situation where the property is paid for totally in cash – not every transaction may be captured.

In particular, the figures for units purchased by citizens from 7 countries – particularly Vanuatu, Cambodia, Dominica, Thailand, Cyprus,  Spain and Denmark – actually jumped, the ERA report declared.

The biggest hike in the number of units bought was from Cambodia, with transaction volumes rising close to 113% from 8 homes to 17 homes. In proportion, the number of property transactions from purchasers of Dominica in the West Indies was at the peak, going from 1 unit to 5 units, or up 400%.

Head of research at Singapore and Southeast Asia’s Cushman & Wakefield, Ms Christine Li, added that a few China-born converted new citizens in those regions could be behind the increase in transactions, “as there are a number of countries that offer citizenship through property investment programmes”.

For example, in October 2019, The Business Times wrote about Xie Zhijing, a Vanuatu citizen, was purchasing a S$32 million penthouse unit at TwentyOne Angullia Park. The transaction was done through a successful property agent.

The passport of Cyprus was ranked the 8th most powerful passport in the most current Passport Index, and that “could have attracted a number of Chinese investors”, Miss Li added.

In the meantime, the ranking of the largest group of foreign purchasers of luxury non-landed residential property was mainly unchanged, even as the amount of units bought from those territories went down after the cooling measures were in effect, the ERA report revealed.

Post-cooling measures, China nationals purchased 380 non-landed units in the Core Central Region – albeit dropping around 30% – making them the biggest group of purchasers of luxury residential properties like the One Bernam project after Singaporeans.

Purchasers from Indonesia jumped ahead of Malaysia to clinch the 2nd position as they bought 149 non-landed properties in the CCR. Americans retained the 4th position, and purchasers from Hong Kong and Taiwan made up the top 5. Purchasers from India dropped from 5th position previously to 10th as they “retraced their steps surprisingly from the CCR market”, the report revealed.

Faced with a heavier ABSD, India nationals might have amended to other emerging countries as an investment location, such as Sri Lanka, commented Misss Li.


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