http://www.businesstimes.com.sg/arch...eping-20140423
Published April 23, 2014
Foreigners' share of home purchases creeping up
However, absolute number of transactions is lowest since Q1 2009
By Kalpana Rashiwala
[email protected] @KalpanaBT
[SINGAPORE] Private home purchases fell across the board in the first three months of this year to just over 2,000 units - the first time in more than five years that the number has dropped below 3,000 homes. However, foreigners' share of transactions edged up because of a sharper pullback by Singaporean buyers.
Singaporeans' share - at 70 per cent - is at its lowest since the introduction of the additional buyer's stamp duty (ABSD) in Q4 2011. In absolute terms, purchases by permanent residents (PRs) and foreign buyers were also at their lowest levels since the Q1 2009 market trough during the global financial crisis.
Based on DTZ's caveats analysis of URA Realis data as at April 15, Singaporean buyers accounted for 70 per cent of the 2,076 private homes that changed hands in Q1 this year, down from the 73 per cent share in both Q4 and Q1 last year.
PRs saw their share increase to a record 19 per cent - the highest level since Q1 1995, the earliest date that the URA Realis caveats database goes back to - from 16 per cent in Q4 2013 and 17 per cent in Q1 2013.
Market watchers linked the rise to the rule change in late-August 2013 requiring new PRs to wait three years before they can buy an HDB resale flat, prompting those who need immediate accommodation to turn to the private housing market.
Foreigners' share too has been creeping back up, touching 10 per cent for the first quarter. Although this is still low compared to the pre-ABSD proportion of 19 per cent, this was higher than the 9 per cent in Q4 2013.
DTZ South-east Asia chief operating officer Ong Choon Fah said that given the high home ownership rate among Singaporeans, "there is no real push factor for them to buy right now".
"They can afford to time the market. With signs now that the market is softening, more Singaporeans are taking a wait-and-see attitude."
Lee Lay Keng, DTZ's regional head (SEA) research, noted that the combination of the ABSD measures and last June's total debt servicing ratio (TDSR) framework had led to a sharper pullback in buying activity by Singaporeans in the first quarter amid expectations that prices could fall further given that the government has said it is not yet time to remove any cooling measures.
Despite the slowly rising share of foreign buying, market watchers are not expecting the authorities to come up with fresh cooling measures given the weaker property market sentiment.
Ms Lee said while the 42 and 47 per cent quarter-on-quarter declines in Q1 purchases by PRs and foreigners respectively were smaller than the 54 per cent slide in Singaporean purchases, the 401 units and 203 units that PRs and foreigners acquired here in January-March were at their lowest levels since Q1 2009. In that quarter, the figures were 325 and 175 units respectively.
The 1,453 private homes that Singaporeans bought in Q1 this year was the lowest since the 1,402 units in Q4 2008.
For all three groups, the number of units bought in Q1 was also down significantly from the year-ago period. In Q1 2013, Singaporeans, PRs and foreigners snapped up 4,494, 1,029 and 622 units respectively.
Giving a breakdown of the combined PR and foreign buying pool by nationalities, DTZ said that mainland Chinese, Malaysians, Indonesians and Indians continued to be the top four groups. Together, they accounted for 81 per cent of all private home purchases by non-Singaporean buyers, similar to Q4 2013.
Purchases by all four nationalities saw quarter-on-quarter declines, with Indonesians posting the biggest drop of 52 per cent to only 72 units in Q1. This was the first time since Q1 2009 that their purchases dipped below 100 units.
In all, 2,076 private homes were transacted in Q1, nearly half the 4,312 units in the previous quarter and one-third the Q1 2013 volume of 6,175 homes. The latest figure marks the first time the number has slipped below 3,000 units since Q4 2008, when 1,787 private home changed hands.
Century 21 Singapore CEO Ku Swee Yong is cautious about the outlook for private residential transactions for the rest of the year. "The general mood among real estate investors in most markets is just not there. For Singapore, I'm cautious till at least end-2014. If we see another three to four quarters of subdued transaction volumes and price declines, the Singapore authorities may lift some of the cooling measures. That could bring back buyers."