Bloomberg News

Singapore’s Foreigner Home Demand Beat Local in 2011, DTZ Says

February 26, 2012

Feb. 24 (Bloomberg) -- Singapore’s private home purchases by foreigners rose 20 percent in 2011 even as demand from Singapore citizens and residents fell, DTZ Holdings Plc.

Foreigners bought a record 5,246 housing units last year, surpassing the earlier record of 4,982 units in 2007, the property brokerage said in a report. The number of private homes purchased by Singaporeans and permanent residents in 2011 fell by 24 percent and 16 percent respectively, the report showed.

Singapore’s private home prices posted gains in every quarter last year, even as the government in January raised down payment requirements for second mortgages and extended the period homeowners must hold properties to avoid stamp duties or sales taxes.

“The better performance in the primary market is due to the availability of smaller units costing less than S$1 million ($797,000), and buyers can buy and hold during the construction period to avoid paying the seller’s stamp duty in the first four years of purchase which was imposed in January 2011,” Chua Chor Hoon, the head of Asia Pacific research at DTZ, said in the statement.

Foreigners were the only group that increased purchases, accounting for 17 percent of home sales in 2011, the highest in the past 15 years since data is available, DTZ said, citing the government’s data.

China vs Malaysia

Buyers from China overtook Malaysians for the first time, making up 28 percent of foreign buyers last year from 20 percent in 2010, DTZ said. Indonesians and Indians are also among the dominant groups of buyers from abroad in 2011, with the four nationalities making up 77 percent of transactions among non- Singaporeans, up from 73 percent in 2010, DTZ said.

Singapore’s January private home sales rebounded from their lowest in two years, boosted by purchases in the suburban areas of the island state. Home sales dropped to the lowest in two years after the government imposed new taxes on house purchases by foreigners in December.

“With the implementation of the additional buyer’s stamp duty measures, the share of local buyers is expected to rise in 2012 as foreigners now have to pay a much higher stamp duty on any residential purchase,” Chua said.

--Editors: Linus Chua, Tomoko Yamazaki

To contact the reporter on this story: Pooja Thakur in Singapore at pthakur@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net


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