‘YOLO’ mentality and foreign buying interest widen old-new property price gap

As the political unrest in Hong Kong has taken a violent turn, there is growing unease among the wealthy. A side-effect has been an increase in enquiries and expressions of interest about buying residential property in Singapore from private bankers in Hong Kong, according to some property agents.
“It’s not just private bankers enquiring on behalf of their clients in Greater China including Hong Kong, but the private bankers themselves are house-hunting in Singapore too,” says Ken Low, managing partner of SRI, who recently met such a banker. “And it’s not just local Hongkongers, but expatriates living and working there, who are now exploring the possibility of diversifying their risks and parking some of their wealth in Singapore.”
Anecdotally, the high-net-worth individuals from Hong Kong have a shopping budget in the $4 million to $5 million range, notes Low, and are looking at completed projects in the Core Central Region, the likes of Wallich Residence at Tanjong Pagar Centre, Marina One Residences, 8 St Thomas and South Beach Residences. However, some are also shopping at new launches in the prime districts, for instance, Juniper Hill on Ewe Boon Road, The Hyde at Balmoral and Boulevard 88, as they are looking at “the prospect of capital appreciation”, he adds.

50% jump in foreign buyers

While there is definitely an increase in interest from Hongkongers, it is still too early to tell whether this will translate into actual sales, says Bruce Lye, managing partner of SRI.
The Good Class Bungalow at Maryland Drive, completed in 2002, and sitting on a 999-year leasehold site of 19,171 sq ft, was sold for $25 million ($1,304 psf) in June (Photo Credit: SRI)
However, there was a significant jump of more than 50% in the number of foreign buyers in 2Q2019, notes Lee Sze Teck, head of research at Huttons Asia. Some of the projects that were popular with foreign buyers in the quarter were Boulevard 88, Marina One Residences, Park Colonial and The Tre Ver, he adds.
The additional buyer’s stamp duty (ABSD) is still “a hindrance” for investors, adds Lye, although those buying for owner occupation, especially the Chinese, are more likely to take the stamp duty in their stride and treat it as “a higher cost of transaction”.
As buyers...