A combination of factors are accounting for a slowdown in Singapore’s residential property market, and China is positioned to take the lead among foreign buyers. Upscale real estate is proving less vulnerable to the slump, with an increase in million dollar purchases reflecting the price growth of recent years. See the following article from Property Wire for more on this.
The private residential real estate sector in Singapore is cooling due to a combination of European debt worries, local stock market jitters and increased land supply, according to analysts.
The latest report from property consultants DTZ suggests that market activity slowed in May and June due to subdued global outlooks. Primary sales in the second quarter fell by 8% to 4,033 units, as developers slowed the pace of launches because of the subdued sentiment.
Sub-sales, an indicator of speculative activity, made up 10% of the non-landed transactions in the second quarter, lower than the previous quarter’s 13%, the report also shows.
The introduction of seller’s stamp duty in February could also be adding to the reluctance to buy and drop off in sales, analysts said.
But the luxury sector seems more immune to the downturn with the sale of high end properties rising. Transactions on units that are at least S$3 million edged up 1% to 10% of all sales transactions. Most of these were in the prime districts of 9, 10 and 11.
More buyers are paying more than $1 million each for their new properties, the report also reveals. Some 43% bought HDB properties worth $1 million or more in the quarter compared with 36% in the first three months of the year. While the number of private purchases of $1 million and over rose to 73% from 69%.
‘This shift is due to prices having risen almost 20% since the third quarter of 2009, according to the residential property price index compiled by the Urban Redevelopment Authority,’ the report said.
The report also said that 33 per cent of all private units transacted in the quarter were bought by purchasers with HDB addresses – way higher than the 22 per cent seen in 2007 when the property boom was led by the higher-end segment.
More Chinese buyers are entering the market and are set to become the main overseas buyers in the country. Mainland Chinese buyers made up 17% of non-Singaporean purchasers in the second quarter, while Indonesians were at 18%. Malaysians continued to be the top non-Singaporean buyers, accounting for 22% of total transactions.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.