http://www.businesstimes.com.sg/real...te-home-buyers

Malaysians widen lead over Chinese as top private home buyers

They account for about 29% of Q3 purchases made by PRs and foreigners, against the latter's 26%

By Kalpana Rashiwala

[email protected]@KalpanaBT

23 Oct


THE gap between the top two nationalities of private home buyers among foreigners and PRs widened in the third quarter, after purchases by mainland Chinese fell more than those by Malaysians. This is the first time since Q3 2012 that a significant lead by the Malaysians has emerged (view infographic).

According to a caveats analysis by DTZ, the Chinese share fell four percentage points to 25.62 per cent in Q3 from a quarter earlier. This is their lowest share since Q4 2012, when it was 25.42 per cent.

The Malaysian share came in at 28.65 per cent, down slightly from 29.96 per cent in Q2. In that quarter, Malaysian and Chinese buyers were almost neck and neck, at 290 units and 289 units respectively.

Purchases by Malaysians fell about 32 per cent quarter on quarter to 198 units in Q3, while Chinese buying dropped 39 per cent to 177 units.

"The units acquired by mainland Chinese in Q3," said DTZ regional head (SEA), research, Lee Lay Keng, "is also their lowest quarterly purchase since Q1 2009 during the global financial crisis, when they bought 97 homes."

She suggested that the Q3 drop in Chinese purchases might be due to the attraction of properties elsewhere around the globe. "It could also be because the Chinese authorities have started to pull back some of the property cooling measures, so capital is flowing back (home)."

Century 21 CEO Ku Swee Yong noted that many China visitors have postponed their trips to Singapore and the region following the disappearance of Malaysia Airlines Flight MH370 in March. "Certainly, we property agents on the ground feel that we are serving fewer China investors. This drop was more stark during the Golden Week Holidays earlier this month, when we had expected to serve more China investors.

"The overall drop in new PRs in Singapore is also a contributing factor in the decline in China property buyers in Singapore."

Currently, PRs pay a lower additional buyer's stamp duty (ABSD) rate of 5 per cent for their first Singapore residential property purchase, compared with 15 per cent for purchases by foreigners.

DTZ's analysis was based on URA Realis caveats data as at Oct 15 for the purchase of private homes - excluding executive condominiums, a public-private housing hybrid. The figures can be expected to change as more caveats for Q3 are lodged over the next few weeks.

For the July-September period, most Chinese purchases were in districts 18 (which includes Tampines and Pasir Ris) and 19 (which includes Serangoon, Hougang and Punggol).

Among Malaysian buyers, the most popular were districts 23 (which included Hillview, Dairy Farm, Bukit Panjang and Choa Chu Kang) and 19.

Indonesians remained the third most active group of non-Singaporean buyers with a 14.33 per cent share, up from 11.47 per cent in Q2.

Pointing out a change in their buying pattern, DTZ said: "While data in past quarters have shown Indonesian buyers shying away from their traditionally favoured prime districts 9, 10 and 11, the proportion of purchases by Indonesians in these areas increased in Q3. About 32 per cent of all purchases by Indonesians were in the prime districts, up from 25 per cent share in Q2 this year and 18 per cent in Q1."

Indonesian purchases fell 11 per cent to 99 units in Q3. The 12 units at Grange Infinite that Indonesian tycoon and philanthropist Tahir clinched did not surface in the caveats data; BT reported earlier that the transaction was effected through the sale of shares in two overseas-incorporated companies.

Indian nationals remained the fourth biggest contingent, with an 11.87 per cent share. The number of private homes they snapped up, though, declined 25 per cent to 82 units.

Overall, the number of homes bought by PRs fell 28 per cent quarter on quarter to 476. Similarly, purchases by foreigners slipped 29 per cent to 215. Singaporean buying, however, fell at a bigger pace of 41 per cent to 1,730. The Singaporean proportion of home purchases eased to 69.26 per cent, from 74.39 per cent in Q2.

This is their lowest share since Q4 2011, when it was 66.21 per cent - on the eve of the December 2011 introduction of the ABSD that penalises foreign buyers the most. In the following quarter, Q1 2012, the Singaporean share surged to almost 79 per cent.

On the sharper Q3 drop for Singaporean purchases relative to PR and foreigner buying, Mr Ku reckons that this was partly seasonal, citing the Hungry Ghosts Month.

The only category that posted a step-up in Q3 buying activity was companies. They picked up 77 units, up from 46 in Q2. The increase was supported by the 36 units that Low Keng Huat bought in Balestier Towers in July.

In all, caveats were lodged for the purchase of 2,498 homes, down about 37 per cent from Q2's 3,960.

Giving a split of buyers' profile according to their address, DTZ found that the proportion of buyers living in Housing & Development Board flats shrank to 43 per cent, from 50 per cent in Q2. Conversely, the proportion of buyers that had private addresses rose to 57 per cent from 50 per cent.

Nevertheless, HDB dwellers' 47 per cent share in the first nine months of this year was ahead of the 44 per cent share for the whole of 2013 as well as 2012. Ms Lee suggests that the Q3 drop could be due to the key launches in the period - City Gate in Beach Road, Seventy Saint Patrick's in the East Coast and Highline Residences in Kim Tian Road - not being typical suburban condo projects that mostly tap HDB upgraders. Moreover, note market watchers, these projects have relatively high price points.