http://www.straitstimes.com/PrimeNew...ry_651249.html
Mar 31, 2011
Chinese are top foreign buyers of homes here
By Esther Teo, Property Reporter
CHINESE buyers acquired more homes here than any other group of foreigners in the first three months of the year, bypassing Malaysians, the traditional leaders, in the process.
Mainland Chinese - including permanent residents (PRs) - snapped up 241 homes this quarter, according to caveats retrieved to March 30 by Jones Lang LaSalle (JLL). This comprised 8 per cent of all non-landed sales and 22 per cent of all purchases made by foreigners in the three months.
Experts say tighter home-buying policies in China, such as restrictions on residents in major cities buying a second or third home, have prompted more Chinese buyers to look further afield.
Mr Jack Teo, a GPS Alliance agent who recently sold a Bishan Loft unit to a Chinese PR, said he has received more inquiries from Chinese buyers looking for apartments.
'There are a lot of Chinese immigrants here and their mindset is that renting is expensive and so they would rather buy,' he said.
'With the measures, they have the extra cash now and some parents might be looking for affordable homes of less than $1 million to buy for their kids studying here.'
The trend was already evident in the last quarter of last year, according to a DTZ Research report that found that Chinese buyers had overtaken Indonesians for the first time and were closing in on Malaysians.
The Malaysians were supplanted this year, with Indonesians in third place and Indians close behind.
Experts also note that Chinese buyers occupy two extreme ends of the market. The JLL analysis found Chinese buyers this quarter dominating both the mass-market segment and the ultra-posh sector of homes priced at $5 million or more.
They bought 151 mass-market units priced between $500,000 and $1.5 million, or 8 per cent of homes in the segment, JLL said. They were followed closely by Malaysians.
The firm defines mass-market as districts outside of the prime, central and east coast areas.
Chinese buyers also acquired 17 of the 54 units priced over $5 million sold to foreigners in the central and prime districts this quarter.
The rest were bought by buyers from Indonesia, Britain and Malaysia, among other nations.
Foreigners played a key role in the overall market this quarter, buying 32 per cent of the 3,090 non-landed homes sold, JLL added. This includes all new sale, subsale and resale transactions.
Experts say the increasing ranks of Chinese home buyers is no surprise given that Singapore provides a safe environment for cash-rich Chinese to acquire secure assets like property.
OrangeTee's executive director of residential, Mr Steven Tan, said that after 'drastic measures' to restrict home purchases were introduced, the Chinese were eager to invest abroad, not just in Singapore but in countries like Australia.
'We have noticed a clear trend since the limitations were introduced and can already feel things changing this quarter... This trend is likely to continue, with the Chinese increasingly significant in their buying power.'
While mass-market homes might have been bought for owner-occupation by PRs, the high-end homes were probably bought by cash-rich businessmen for investment purposes, Mr Tan added.
JLL's South-east Asia research head, Dr Chua Yang Liang, said prices are likely to stay up thanks to continued interest from foreign buyers, especially those from China and the region.
'The surge in Chinese buyers in Singapore coincided with the policy tightening in China,' said Dr Chua. 'We can expect the number of Chinese buyers to continue at a healthy level... as the fiscal and monetary policies in China remain conducive to overseas investment by the wealthier Chinese.'
The Shanghai authorities, for example, announced on Monday that it will limit gains in new home prices to no more than the pace of economic growth and average income expansion.