More Singaporeans have their sights trained on offshore property markets as the outlook for local prices dims, according to some real estate agents and industry watchers.
A survey by PropertyGuru found that 19 per cent of more than 1,737 respondents were “tempted” to invest overseas, up from the 14 per cent registered in PropertyGuru’s previous survey in June 2011.
Malaysia was the top overseas destination in the most recent poll, with 32 per cent interested in that market. This was followed by Australia with 24 per cent and New Zealand and the Philippines, both with 9 per cent. The survey was conducted before the Singapore Government’s recent cooling measures. PropertyGuru expects an increase in the proportion of local and foreign investors looking overseas in the next six months, as indications mount the gains in Singapore’s residential market will slow.
This month, the government slapped an Additional Buyer’s Stamp Duty of 10 per cent on purchases by foreign investors, including permanent residents and companies.
Malaysia-based developer Eastern & Oriental says it has noted a 20-per-cent increase in inquiries on its projects in Penang from home hunters in Singapore. One of them is Madam Soh Poh Neo, who bought two units at Andaman in Quayside condominiums in Penang. She paid RM2.2 million (S$900,000) for a 2,500 sq ft apartment and, subsequently, another two-bedroom apartment for RM1.75 million (S$717,000).
Having visited Iskandar Malaysia, Kuala Lumpur and Penang, Madam Soh said she is now turning her attention to Penang Island. She says the “limited supply of land” on Penang makes it an alluring destination, particularly for seafront land. Madam Soh found that more than half of Penang Island is 250 feet or more above sea level and cannot be developed due to government policy.
Madam Soh, who has also invested in the United States, Singapore and Hong Kong, says her Penang units have appreciated by about 40 per cent since buying them last year.
Analysts say cooling measures have taken some of the heat out of the high end of the residential market, and that it is likely to continue next year as investors look for opportunities in oversold Western markets. Such diversion of funds to the West may affect demand for luxury homes in Singapore, Shanghai, Beijing and Hong Kong, where prices have risen by about 25 per cent in recent years.
Mr Donald Han, vice-chairman of Cushman & Wakefield, said: “While we saw very strong activity by high-net-worth investors, particularly from the Asia-Pacific region … the course might change in the next 12 months, where we see more outflow in terms of money going into markets like in Europe, in key markets in the US, by high-net-worth Asian investors.”
Source : Today – 27 Dec 2011