Despite cooling measures and interest rate hikes, luxury condo purchases by foreigners back at pre-pandemic levels: OrangeTee & Tie

/ EdgeProp Singapore |
CanningHill Piers in District 6’s Clarke Quay area was the most popular new project among foreign buyers so far this year (Picture: Samuel Isaac Chua/The Edge Singapore)
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SINGAPORE (EDGEPROP) - Despite property cooling measures implemented last December and interest rate hikes, the number of luxury condo purchases by foreigners has returned to pre-pandemic levels, according to a research report by OrangeTee & Tie.
URA Realis data as of Sept 29 shows that foreigners (defined as non-citizens and non-permanent residents) have purchased 143 non-landed homes priced at $5 million and above in the first eight months of the year, representing 23.6% of total condos purchased by foreigners in that period. In comparison, in the pre-pandemic period between January and August 2019, foreigners purchased 136 units in that price range, making up 21.5% of total condos purchased by foreigners.
luxury condos - EDGEPROP SINGAPORE
OrangeTee & Tie’s report also points out that the total number of foreign buyers for all condo purchases is also nearing pre-pandemic levels. In the first eight months of the year, foreign buyers bought 607 condos, marginally lower than the 632 units transacted during the same period in 2019.
The report attributes the rebound in foreign buyer transactions to Singapore being viewed as a safe haven with palatably-priced properties. “Despite the increased additional buyer’s stamp duty, some buyers consider luxury properties here to be cheaper than in many other cities, given that prices have similarly increased in those places,” explains Christine Sun, senior vice president of research & analytics at OrangeTee & Tie.

Foreign buyer profile

Drilling down by nationality, mainland Chinese buyers made up the bulk of foreigners who purchased condo units in Singapore between January and August. Including both permanent residents and non-permanent residents, Chinese buyers took up 932 condo units during the period, followed by buyers from Malaysia (566 units), India (324 units), the US (203 units) and Indonesia (194 units).
Mainland Chinese buyers also represented the biggest group of foreign purchasers that acquired luxury condos. Roughly 20% or 81 units of condos priced at $5 million and above were bought by mainland Chinese buyers. This was followed by US citizens (34 units or 8%) and Indonesians (28 units or 7%).
In terms of location, District 10 was the most popular district among foreign buyers, followed by Districts 9, 3 and 6. Foreign buyers also purchased more new condos compared to resale condos. Between January and August, foreigners acquired 350 new condo units, versus 249 resale condo units. As a proportion of total new condo sales, foreigner purchases rose from 4% for the first eight months in 2021 to 6.7% for the same period this year.
new condos bought by foreigners - EDGEPROP SINGAPORE
CanningHill Piers, the 696-unit development by City Developments Ltd (CDL) and CapitaLand in District 6’s Clarke Quay area, was the most popular new project among foreign buyers, with 43 units purchased. This was followed by the 376-unit project by GuocoLand and Hong Leong Group in District 9’s River Valley area (30 units); Frasers Property’s Riviere on Jiak Kim Street in District 3; and CDL’s Irwell Hill Residences, also in the River Valley area.
Meanwhile, the most popular release project was CDL’s Nouvel 18 development on Anderson Road, with 13 units transacted between January and August. This was followed by D’Leedon, located along Leedon Heights off Farrer Road (10 units), Marina One Residences on Marina Way (10 units), and Wallich Residence at Guoco Tower on Wallich Street (nine units).
OrangeTee & Tie's Sun notes that for foreign buyers, the “sweet spot” when it comes to price falls between $800,000 and $2 million for a condo unit. Data for the first eight months of the year indicates that the majority of mainland Chinese and Indian buyers purchased units between $800,000 and $3 million. For Malaysian buyers, units priced less than $2 million made up the bulk of transactions.

Continued traction

Looking ahead, Sun does not anticipate the new cooling measures announced on Sept 30 to impact the luxury market. “The impact of the measures is not likely to be significant as high-net-worth individuals have sufficient cash or capital,” she states.
The luxury market will also likely be bolstered by Singapore’s new initiatives to attract top foreign talent. In late August, the government introduced a new five-year visa for foreign national workers with fixed monthly salaries of $30,000. “The move will likely benefit the luxury market as some expatriates may purchase a home to settle down for the long term,” Sun adds.

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