http://www.straitstimes.com/archive/...arket-20120829
Foreigners reacquiring taste for housing market
Published on Aug 29, 2012
FOREIGNERS are streaming back into the housing market as developers dangle incentives to take the sting out of the recent cooling measures.
Overseas buyers - excluding permanent residents (PRs) - snapped up 7 per cent of all private homes in the three months to June, up on the 5 per cent market share in the first quarter, according to consultancy DTZ.
In terms of absolute numbers, foreign purchases rose 73 per cent to 611 units in the second quarter, led largely by renewed interest in city centre and city fringe homes.
While a huge jump in percentage terms, DTZ noted that purchases are still well below the quarterly average of 1,369 foreign-bought units last year.
This sector of the market was jolted when the additional buyer's stamp duty (ABSD) of 10 per cent was introduced for foreign buyers in December.
Ms Chua Chor Hoon, DTZ head of Asia-Pacific research, said developers have been offering incentives such as ABSD reimbursements, rental guarantees and furniture vouchers.
These go to all buyers, regardless of their nationalities, she noted.
Some foreign nationals who are exempt from ABSD and PRs who do not own any private residential properties will still receive the incentives, which means lower prices, Ms Chua said.
The report also noted that Malaysians topped the table again with a 27 per cent market share of all foreign purchases, edging out mainland Chinese buyers for the second consecutive quarter.
Chinese buyers made up 19 per cent of the market, down from 23 per cent in the first three months of the year.
This is their lowest share since the third quarter of 2010 and was caused by "a slowdown in (the Chinese) economy, the termination of the Financial Investor Scheme (which facilitated acquiring PR status) and restrictions on foreigners buying strata-landed homes", the report said.
Notably, there were more purchases made by buyers from the US, Japan and the Philippines.
For instance, American buyers bought 58 homes in the second quarter, more than their quarterly average of 32 last year, DTZ said.
"(This) could be due to (them) having the same ABSD treatment as Singaporeans while enjoying the same incentives given by developers. Hence, they will be paying less compared to the pre-ABSD days," the report said.
The ABSD does not apply to Americans under terms of the free trade deal the nation has with Singapore.
The same applies to buyers from Switzerland, Liechtenstein, Norway and Iceland.
DTZ added: "Similarly, the strong growth in private home sales by Filipinos and Malaysians could be due to incentives given by developers, which mean lower prices for the PRs in these two groups as there is no ABSD for PRs who do not own any private residential property."
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