More Chinese investors entering S’pore property market

More Chinese investors are entering the Singapore property market, according to property consultant DTZ.

Among non-Singaporeans, mainland Chinese buyers have grown significantly in number from 2009, recording their highest ever share of 20 per cent in the third quarter this year.

This puts them on par with Indonesians as the second-largest group of non-Singaporean buyers after Malaysians, who topped with 21 per cent.

DTZ also said that more small-sized units are being transacted in Singapore.

It noted that in the third quarter this year, the number of transactions for units below 500 square feet increased to 625 from 349 in the previous three months.

Almost 87 per cent of the 625 units transacted in the third quarter were purchased from developers.

Head of DTZ South East Asia Research, Chua Chor Hoon, said the so-called “mickey mouse” units have been gaining popularity since 2009.

She added that the recent measures announced by the government to cool the real-estate market will make smaller units more attractive.

This is because the government now wants buyers with existing home loans to fork out more cash for subsequent purchases. Those buying smaller units will find the demand on their cash resources less onerous.

The research report is based on caveats lodged for both new and secondary sales.

Another DTZ finding showed the level of sub-sales has generally stabilised between nine and 12 per cent since the first round of cooling measures in September 2009.

DTZ also said the proportion of transactions in the prime districts of 9, 10 and 11 has been declining. The share of these prime districts fell to 16 per cent in the third quarter from 25 per cent in the January-to-March period.

This is a result of both an increase in the number of homes for sales outside the prime areas from the second quarter of 2010 and a lack of new project launches in prime districts.

Signs of increased buying activity among investment funds were also visible as the share of company purchases increased to three percent in the third quarter from two percent in the previous three months.

DTZ also said tougher measures can be expected here if the market continues to be buoyant.

It drew this conclusion based on the determination of the government to clamp down on property speculation and rising prices.

Source : Channel NewsAsia – 23 Nov 2010

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