S'poreans take bigger bite of private homes
They account for 76% of home deals last year, highest since 2005: DTZ
By EMILYN YAP
(SINGAPORE) Singaporeans had a better shot at owning a private home in 2009 as property prices fell in the early part of the year and mass-market launches were the order of the day.
Analysing caveats lodged, real estate consultancy DTZ found that Singaporeans' share of private residential transactions reached 76 per cent last year. This exceeded the 73 per cent in 2008 and was the highest level since 2005.
Permanent residents accounted for 13 per cent of the deals - unchanged from the previous year.
In contrast, foreigners' share shrank to 9 per cent from 11 per cent in 2008. But some market watchers believe this group of buyers could become more active this year, with more high-end projects in the market.
HDB upgraders spurred the revival in the property market last year when they snapped up suburban homes, taking advantage of lower prices at the height of the financial crisis. Encouraged by sentiment in this sector, developers focused on rolling out more mass-market projects.
DTZ pointed out that last year, those with HDB addresses made up 41 per cent of all private home buyers - almost double the 22 per cent in 2007.
Real Estate Developers Association of Singapore CEO Steven Choo said: 'Typically, upgraders and mass-market buyers are locals, many of whom buy for owner-occupation'. This would be a key reason why Singaporeans accounted for a greater proportion of private home transactions last year.
Mr Choo said the same trend had played out in 1999 after the Asian Financial Crisis.
Ngee Ann Polytechnic real estate lecturer Nicholas Mak said that on the other hand, foreigners who buy property as an investment still prefer prime districts. But high-end or luxury launches were few and far between until the later part of last year.
In 2007, when prime projects were making headlines in an exuberant property market, Singaporeans accounted for just 67 per cent of private residential deals, whereas foreigners accounted for 13 per cent. PRs and companies together accounted for the other 20 per cent.
Industry watchers expect to see foreigners' share of transactions edge up this year compared with 2009. 'That's nothing out of the ordinary, quite consistent with the (historical) pattern,' said Mr Choo, explaining that this could happen as property prices rise and the pace of purchases by HDB upgraders slows.
He said it is too early to say whether foreigners' share of deals will return to the level in 2007 - there is still uncertainty in the markets, and there is a need to see how the global economy pans out in the second half of the year.
DTZ's data does show HDB upgraders being increasingly sidelined as property prices rise. In Q4 2009, those with HDB addresses made up 34 per cent of all private home buyers, down from 56 per cent in Q1.
Prices of mass-market homes increased to $610 per sq ft in Q4 - 6.6 per cent up from Q2 and 'back to almost the peak price level in Q4 2007'.
Going by sales reports from developers, foreign buyers are returning. There is also talk in the market that some buyers from China made their way here to view showflats over the Chinese New Year holiday.
According to DTZ, Malaysians were most active among non-Singaporeans in the property market last year, accounting for 27 per cent of transactions by foreigners and PRs. Indonesians followed with a 19 per cent share - the lowest since 1995 when caveats were available for analysis.
The Chinese were in third place, accounting for 15 per cent of the deals. Indians ranked fourth with a 12 per cent share.
DTZ noted that in the second half of 2009 there were more foreign buyers from other countries, particularly the UK, Korea and Australia.
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