SINGAPORE (EDGEPROP) - Even though border restrictions have been in place since April last year — save for green lane arrangements for business travel — foreigners are still buying homes in Singapore. Recent data suggests that there could be an increase in the number of foreigners who reside long term in Singapore and see value in transferring the rental they pay towards ownership, says Lee Sze Teck, director of research at Huttons Asia.
This is evident from data from January 2020 to February 2021. District 5 (Buona Vista, West Coast and Clementi New Town) was the most popular among foreigners, which is home to 475 out of 4,208 homes (11.3%) bought by foreigners. This is followed by District 19 (Serangoon, Hougang, Sengkang and Punggol), where 403 homes (9.6%) were sold to foreigners.
This trend is led by the Chinese, which is the largest group of foreign buyers in Singapore, accounting for almost 30% of property transactions by foreigners in the past 15 months. They bought 131 homes in District 5 and 116 homes in District 19. Comparatively, in Districts 9 and 10, the Chinese bought 79 units and 90 units respectively.
Malaysian buyers, the second largest group of foreign buyers, show a preference for Districts 19, 14 (Eunos, Geylang, Paya Lebar) and 5 (Buona Vista, West Coast, Clementi New Town); while the Indians, the third largest group, prefer District 18 (Tampines and Pasir Ris). Meanwhile, buyers from Indonesia, the US and the UK still show a preference for prime Districts 9 and 10.
The popularity of District 5 could stem from the fact that there are Grade-A offices like Mapletree Business City in the south, and research and development hubs in the biomedical, info-communications technology and media fields in Buona Vista and one-north. Additionally, homes here offer proximity to National University of Singapore and green spaces such as Kent Ridge Park, Labrador Park and HortPark.
The southern part of District 5 will also be part of the upcoming Greater Southern Waterfront, which will be redeveloped with nature trails, a waterfront promenade, as well as new residential, commercial and hospitality developments.
Additionally, there have been more new launch projects in District 5 in the past few years, including the launches of Whistler Grand and Kent Ridge Hill Residences in 2018 and 1,468-unit Parc Clematis in 2019. In December 2020, 505-unit Clavon was also launched, followed by the 1,862-unit Normanton Park, which launched in January this year.
The 1,862-unit Normanton Park is one of the newest and largest launches in District 5; 11% of total homes sold in the past 15 months were to foreign buyers (Photo: Samuel Isaac Chua/The Edge Singapore)
In terms of percentage of foreign ownership, the popular projects among foreigners in District 5 include The Peak and Bijou. At The Peak at Pepys Road, 40.9% of the units sold are owned by foreigners. The development was completed in 2011 and comprises units between 4,349 sq ft and 5,522 sq ft. Located right next to Kent Ridge Park, it is also near Pasir Panjang MRT Station. Prices here average at $1,236 psf.
At Bijou, a mixed-use development completed in 2018, 18.7% of 120 units are foreign-owned. It is located opposite Pasir Panjang MRT Station and Pasir Panjang Food Centre. Most of the units here are one-bedroom plus study and two-bedroom dual-key units. Prices here average at $1,998 psf.
District 19 had a number of new-launch projects, including the 1,052-unit Affinity at Serangoon (Photo: Albert Chua/The Edge Singapore)
As for District 19, the high number of transactions could stem from the fact that it encompasses a large area, which includes Serangoon, Hougang, Kovan, Sengkang and Punggol. Non-landed developments in the northeast region are about 11.4% to 16.6% foreign-owned. There were also a number of new-launch projects in District 19 in recent years, such as 1,052-unit Affinity at Serangoon, 1,472-unit Riverfront Residences and 680-unit Sengkang Grand Residences.
“In the past, many foreigners bought luxury properties. But in recent years, more foreigners seem to be moving outwards from the city centre to the city fringe and suburban areas, possibly due to the price affordability of these properties,” says Christine Sun, senior vice president of research and analytics at OrangeTee & Tie.
Other popular projects with a high percentage of ownership outside of the Core Central Region (CCR) include Euhabitat in District 14 in eastern Singapore, a 99-year leasehold condominium along Jalan Eunos, which comprises fifty five-storey blocks of 748 residential units. Excluding the 51 townhouses, 31.3%, or 218, of the 697 apartment units are owned by foreigners.
Foreigners who buy properties in Singapore fall into two broad categories, says Mark Yip, CEO of Huttons Asia. They are: high-net-worth individuals (HNWI) and non-HWNI. While more homes were transacted in District 5 and 19 by foreigners, the HNWI and ultra-HNWI will go for exclusivity and trophy assets, he observes.
“They will buy homes in District 9, such as Martin Modern and 8 Saint Thomas,” he says, and adds: “Districts 1, 2 and 7 are also emerging as new locations for the affluent foreigners. Popular projects here include Marina One Residences, Wallich Residence and South Beach Residences.”
Most recently, Swire Properties sold all 20 units at ultra-luxury project Eden, located at 2 Draycott Park, to a single Chinese family. The total purchase price was $293 million, or $4,827 psf.
In the central region, South Beach Residences in District 7 has the highest foreign ownership at 62.8%, according to EdgeProp data from January 2019 to March 2021. Prices of the units average at $3,348 psf.
South Beach Residences is a 99-year leasehold property within a mixed development comprising retail offerings, an office tower, and a hotel. Its 190 units are within the upper storeys of the building that houses JW Marriott Hotel. The luxury development, which is connected to Esplanade MRT Station, is developed by City Developments (CDL).
At District 10’s Nouvel 18, 56.1% of the units are owned by foreigners (Photo: Samuel Isaac Chua/The Edge Singapore)
The runner-up to South Beach Residences is Nouvel 18, a freehold condominium located on Anderson Road in District 10. From January 2019 to March 2021, 56.1% of the units sold were bought by foreigners. Completed in 2014, Nouvel 18 is also developed by CDL. It is in a private residential enclave in close proximity to hotels like Shangri-La Hotel Singapore, Novotel Singapore on Stevens and the Orchard Road shopping belt. Prices here average at $3,233 psf.
The project with the third highest percentage of foreign ownership is Wallich Residence, a 181-unit luxurious property atop Guoco Tower. From January 2019 to March 2021, 55.4% of transactions at Wallich Residence were concluded by foreigners. The property has direct underground access to Tanjong Pagar MRT Station and is a short walk to Singapore’s CBD. Prices of units here average at $3,394 psf.
In 2019, there were 1,020 foreigners who bought properties in Singapore. This figure dipped to 761 in 2020, a drop of 25.4%, and seems to have normalised in the past three months. As of March 26 this year, 256 foreigners bought properties in Singapore, indicating that foreign buyers are coming back, even though travel restrictions have not been lifted.
The view from a three-bedroom unit at Wallich Residence, where 55.4% of the units are owned by foreigners (Photo: Albert Chua/The Edge Singapore)
This could be due to demand coming from foreigners who are based in Singapore, says Huttons’ Yip, who adds: “Some foreigners were undecided between staying long term in Singapore or returning to their home country. The Covid-19 outbreak gave them an opportunity to compare how Singapore handled the pandemic with their home country, which could have given them the confidence and assurance to reside for the longer term and commit to a property purchase.”
OrangeTee & Tie’s Sun says that in times of uncertainty, foreign buyers are looking for investment destinations that are safer and properties that provide more stable returns.
“Prices of properties in Singapore have proven to be resilient despite the current pandemic. Perhaps these buyers are increasingly convinced that properties here are good long-term investment assets, holding good value in spite of the macroeconomic uncertainties,” she says.
Huttons’ Yip adds that as a key financial centre, Singapore is always “on the radar of foreigners”. “While the returns from property investment are not comparable to emerging cities, Singapore makes up for it in terms of stability and assurance of ownership,” he adds.
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