Travel restrictions imposed in various countries prevented foreigners from visiting the city-state, many whom prefer to physically inspect the property or visit a show-flat before making a purchase.
Singapore saw foreign buying of private homes decline to its lowest in 17 years at 724 units in 2020, reported Bloomberg citing ERA Realty Network and OrangeTee & Tie.
The drop in sales came as travel restrictions and lockdowns imposed in various countries prevented foreigners from visiting the city-state.
An analysis of government data as at Tuesday (26 January) – which took into account second-hand, sub-sale and new apartments – showed that non-permanent residents purchased 671 private homes in 2003.
The city-state rolled out a two-month lockdown in 2020 to curb the spread of COVID-19, shutting down showflats and putting a stop on viewings.
And while it has eased virus curbs, most countries across the world kept their border restrictions, deterring foreigners from coming to Singapore to acquire units.
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“For the luxury market, many buyers prefer to physically inspect the premises or visit a show-flat before making a purchase,” said Ms Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie as quoted by Bloomberg.
“Last year, many overseas buyers were not able to travel to Singapore to view properties in person which may have resulted in a dip in foreign purchases.”
Based on government data gathered by ERA Realty Network and OrangeTee & Tie, acquisitions of apartments by non-permanent residents made up 4.1% of total sales in 2020, making it the lowest in over two decades.
Currently, Singaporeans accounted for the biggest proportion of buyers, with the contribution from such group increasing two percentage points to 80.2% from the previous year.
“Anecdotally, we have also observed more Singaporeans reducing their overseas investments,” said Sun.
Nicholas Mak, Head of Research and Consultancy at ERA unit APAC Realty, expects sales among foreigners to gradually pick up due to developers launching more projects this year and the rollout of vaccine.
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He noted, however, that the expected hike in foreign buying is premised on the government not introducing another round of cooling measures.
The recent hike in private home sales and prices has sparked concerns of the authorities imposing more policy curbs, which could include a hike in stamp duties for foreigners, said DBS Group Holdings.
Mak noted that while acquisitions by Chinese, excluding those holding permanent residency status, fell from 339 in 2019 to 215 in 2020, these group of buyers continue to flock the city-state due to its legal, financial and political stability.
In fact, he described Singapore as “one of the most friendly nations“ for Chinese buyers. And considering that the population of China’s middle class is so big, “just a tiny fraction of them buying apartments in Singapore can cause a surge”, he said.
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