ST : Home buyers from Europe, US are back

Nov 17, 2010

Home buyers from Europe, US are back

Purchases surge 70%; mainland Chinese one of fastest growing groups

By Esther Teo



US and European buyers have flocked to prime districts 9, 10 and 11, covering areas such as Tanglin (above), Orchard, Holland, Newton and Bukit Timah, and District 15 in the east and District 5 in the west. -- ST PHOTO: ALPHONSUS CHERN

HOME buyers from the Americas and Europe leapt back into the Singapore property market in the first nine months of this year, with purchases surging more than 70 per cent from a year earlier.

Property consultancy Savills Singapore said that the total number of purchases by Americans jumped to 246 units this year from 154 last year, while sales to Europeans shot up to 619 units from 353 units in the same period last year.

Ms Christine Sun, Savills' senior manager of research and consultancy, said the surge in interest followed the recovery of some key Western economies.

A number of banks in these countries have shifted hedge funds here, bringing along a number of high net worth individuals and private investors who are on long-term work assignments here.

'Some may prefer to buy a private home rather than lease as current interest rates are low. Some may also be buying in anticipation of further strengthening of the Singdollar,' Ms Sun added.

Together, Americans and Europeans made up 13 per cent of home purchases by foreigners in the first three quarters of this year. Buyers from countries such as the United States, Canada, Britain, France and Germany accounted for the largest increase, Savills said.

They have flocked to prime districts 9, 10 and 11, covering areas such as Orchard, Holland, Newton and Bukit Timah. District 15, which includes Katong, Telok Kurau and East Coast Road, and District 5 in the West Coast are also popular.

Almost half of these Western buyers have also purchased homes in the $1.5 million to $5 million range.

With interest rates expected to remain low for the next few years and the US embarking on another round of effective money printing, American buyers are set to be more active in the coming months.

However, despite the rebound, their numbers are still far from levels seen in 2007 when 1,617 buyers from North and South America and Europe entered the local property market in the first nine months of 2007.

Asian buyers, however, are still expected to dominate the market as the number of wealthy Asians is set to grow further and Singapore remains a popular migration and investment choice, Ms Sun said.

In fact, Asian buyers made up 83 per cent of all foreign purchases in the first three quarters of this year. Purchases by foreigners from Oceania and Australia have also increased 60 per cent year-on-year, Savills data showed.

Foreign buyers from Malaysia, Indonesia, China, India and Britain make up the top five. Mainland Chinese buyers are one of the fastest growing groups of foreign buyers this year, with purchases surging 54per cent in the first nine months year-on-year.

A total of 1,190 homes were snapped up by Chinese buyers in the period, more than the 1,055 sold for all of last year.

Savills data also showed an increasing proportion of foreigners in the market on a month-on-month basis.

Singaporean purchasers fell to 66 per cent last month, or 947 purchases out of 1,446 in total, the lowest monthly proportion since 2007.

Foreign purchasers - including permanent residents - however, have gradually risen from 22 per cent in August to 30 per cent last month, making up 436 out of 1,446 purchases.

One such foreign buyer is Mr Abhi Shroff, an Australian citizen who bought a home in Bukit Timah earlier this year after renting for the past two years.

With low interest rates and plans to be located here for the next few years, he has decided that paying a mortgage makes more sense than paying monthly rental.

'There is also a lot of development taking place in the Bukit Timah area, such as the upcoming MRT line, which could make the location more appealing in the future... Although the property market can be quite volatile, the rental yield is okay and could be worth keeping in the long term,' he added.

esthert@sph.com.sg