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23 April 2013

23rd April 2013, Tuesday




Foreign buyers keen on private homes again

Source: The Straits Times

Foreign buyers are returning to the private property market but their numbers are still well under levels seen before the big stamp duty hit in December 2011.

Their focus has also changed, with mass-market condos in suburban areas now higher on their wish lists, a shift from the high-end homes that they have traditionally sought.

Analysts said the additional buyer's stamp duty (ABSD), which imposed a 10 per cent levy - now 15 per cent - on purchases by foreign buyers, has prompted more of them to aim downmarket.

Foreign buyers, not including PRs, bought 10.7 per cent of the 4,884 private homes sold in the first quarter of this year.

This proportion is well under levels seen before the ABSD was implemented but an increase from their 7.4 per cent share of the 7,918 units moved in the three months to Dec 31.

It is also a jump from the first, second and third quarters of last year when foreign buyers accounted for 5.7 per cent, 7.1 per cent and 7.2 per cent respectively, of new private home purchases, according to caveats lodged with the URA.

The Chinese and Indonesians were the largest groups of buyers in the first quarter of this year, followed by Malaysians. Chinese home-buyers in particular seem to be regaining their foothold in the market. They accounted for 42.6 per cent of the 108 foreign buyers last month, the first time since July they have surpassed Indonesians, who made up 32.4 per cent of buyers last month.

This contrasts with the first two months of this year, when Chinese buyers made up 25 per cent to 30 per cent of foreign purchases while Indonesians accounted for about 38 per cent in both months.

In absolute terms, the number of foreign purchases - 523 in the first quarter - was 40 per cent higher than the 373 recorded in the same period a year ago.

This is despite the ABSD being raised on Jan 12 this year, from 10 per cent to 15 per cent for foreign buyers, as part of a seventh round of cooling measures.

However, the proportion of foreign buyers has still not returned to pre-ABSD levels.

Before the introduction of the ABSD in December 2011, foreigners accounted for a solid 21.2 per cent of private home purchases in the fourth quarter of 2011. This dropped off sharply to 5.7 per cent for the first quarter of last year, as the initial introduction of ABSD at 10 per cent for foreign buyers forced a retreat.


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Office leasing market to bottom out this year

Source: Business Times

Despite office rents remaining soft in 1Q 2013, a consultancy expects the office leasing market to bottom out late this year.

They expect "overall islandwide rents to remain flat with a possibility of marginal increases of around 0.5 per cent towards the end of 2013".

This is against a backdrop of an overall continued downward rental trend this quarter, with a 2.3 per cent quarter-on-quarter drop in rents for grade A+ office space in the Marina Bay and Raffles Place area.

The rent decline is attributed to the completion of Asia Square Tower 2 in the Central Business District (CBD), which is slated for 3Q 2013. The consultancy also foresees a decline in rents in the Shenton Way/Tanjong Pagar and Robinson Road precinct due to the ongoing construction of buildings in the area, posing negative externalities such as noise inconveniences.

Suburban rents are likely to remain strong while the development of good quality new office buildings boost overall average rents.

The lower rents will allow Singapore to retain its competitive edge globally, this being enhanced by the entry of more certified Qualifying Foreign Law Practice firms.


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