ST : Malaysians are top foreign buyers of private homes

Feb 18, 2010

Malaysians are top foreign buyers of private homes

They accounted for 27% of deals by non-S'poreans

By Harsha Jethnani

MALAYSIANS are snapping up more private homes in Singapore than any other nationality, according to a new report.

DTZ Debenham Tie Leung found that last year, they accounted for 27 per cent of total transactions by non-Singaporeans, who include foreigners and Singapore permanent residents (PRs).

This is the second year in a row that Malaysians have emerged as the most active non-Singaporean purchasers in this type of study, which is based on Urban Redevelopment Authority data and uses caveats lodged as a proxy for sales transactions.

Indonesians were behind 19 per cent of transactions last year, the lowest proportion since 1995, when caveat data became available.

In all four quarters of last year, Malaysian buyers came out tops - a turnaround from the period between 2004 and 2007 when this position was held by Indonesians. And in the final three months of last year, Malaysians were responsible for 25 per cent of transactions by non-Singaporeans, significantly higher than the 17 per cent that went to Indonesians. The two groups of buyers were on an equal footing during the same quarter in 2008.

Mr Joseph Tan, executive director for residential at CB Richard Ellis, said geographical proximity and cultural similarities were key reasons for the interest shown in Singapore by its nearest neighbours.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak said the legal system and language make it more comfortable for Malaysians to deal with Singaporeans.

Malaysians look at a wider spectrum of property compared to Indonesians, who are more likely to focus on upper-middle tier to high-end homes, noted Mr Tan.

Indonesians made up one-third of total transactions worth more than $1.5 million during the second quarter of last year, according to a previous DTZ study on private residential demand during the period.

In contrast, Malaysians were well represented among the transactions below the $1.5 million mark - particularly in the under $500,000 and the $500,000 to $1 million segments.

Up to 75 per cent of the transactions by Malaysians were made by Singapore PRs, the same report noted.

These PRs - especially those living in Singapore for more than 10 years - have adopted buying patterns similar to Singaporeans', Mr Mak said. He credited the strong continuing demand from the mainly PR Malaysian buyers to their tendency to buy properties to live in, mainly in the mass-market segment, rather than as investments.

harshamj@sph.com.sg