Last year, St Regis Residences in the Tanglin area made the headlines, with its plush units selling at $3,000 per square foot.
But the fine print packs another punch. Apart from the companies that bought apartments there, 43 of the buyers were foreigners and just 21 Singaporeans.
It is a similar story at The Tate Residences on Claymore Road — 37 foreign buyers against 14 Singaporeans. RiverGate on Martins Road saw 73 foreigners picking up a unit each, compared to 42 Singaporeans.
Exceptional as these developments might be — Singaporeans form the majority of buyers almost everywhere else — they underline a pattern that many people living in private condominiums may have observed: A large number of their neighbours, who own the properties they live in, are from out of town.
Property consultancy DTZ Debenham Tie Leung has now put a number to this trend. Last year, foreigners — including permanent residents — bought 4,980 private homes of the 21,343 sold here last year. This is a 39-per-cent increase from the 3,583 units they picked up in 2005.
Never before have foreigners picked up so many homes here in a single year, and analysts said that the reasons for them to do so are getting more and more compelling. And apart from the usual presence of Indonesians (22 per cent) and Malaysians (20 per cent), the ranks of these foreign buyers are also getting more diverse.
Buyers from India picked up 556 units, compared to 291 the previous year. And, according to DTZ, South Korean buyers increased threefold — from 55 in 2005 to 151 last year. Why is Singapore becoming their dream home?
Analysts cautioned that not all buys were necessarily for the long haul and the reasons, in many cases, were merely pragmatic.
Rental rates of private condos and apartments have jumped between 10 and 20 per cent in some areas.
“Instead of paying high rent and gaining nothing from it in the end, it makes more sense to buy and earn a profit when they sell their home before returning to their own country,” said Mr Albert Lu, managing director of C & H Realty.
“It’s a capital gain.”
The foreign buyers are also convinced that, after the prolonged property slump, the prices here are poised to rise for a while. Last year, overall private property prices shot up by 10.2 per cent — the biggest gain in eight years, according to figures released by the Urban Redevelopment Authority in January.
Even so, foreign buyers see more upside ahead as the prices have not peaked — unlike in some other countries where they have been surging for a few years.
But more than any other factor, the buzz created by the two upcoming integrated resorts (IRs) may have suddenly put Singapore on the radar screens of those who had previously not thought of investing here.
Said C&H’s Mr Lu: “The IRs have really put Singapore on the world map, and that, to me, is the main reason why home prices are picking up, especially at the high end.
“And because the high-end markets are going up, those in the middle range are following suit. It’s a domino effect.”
It also creates a virtuous cycle. As the lure of the IRs draws in more wealthy individuals, it also attracts more companies here eager to gain from the spin-offs. This, in turn, creates more demand for homes. Last year, 245 companies bought privates homes here, compared to 164 the previous year.
Singaporean developers have also been marketing themselves in countries like South Korea — and the results are showing.
“Many of the Koreans I meet here are now looking to own property,” said property agent David Kim, himself a South Korean based here.
“They see it as better value.”
And then, of course there is Singapore’s traditional strength: Liveability.
“Many of the foreign buyers here are those who have lived here for some time and they find Singapore a very liveable country,” said DTZ executive director Ong Choon Fah.
And even for the high-net-worth individuals who do not live here, Singapore remains an attractive place to buy a second home where they stay on vacations or when they come for medical check-ups.
It is also a sound investment and analysts say that the interest among foreign buyers is unlikely to die down, at least until the year 2010 when both IRs are open.
“We are more liveable now as a total package,” said Mrs Ong. “There are plenty of opportunities to work and the environment is safe. If you look at London and New York, there is a large pool of foreigners there, and Singapore is becoming more cosmopolitan like them too.”
Source: Today, 22 March 2007