Singaporeans accounted for 64% of private home sales in the Core Central Region (CCR) between Q3 2018 and Q3 2019. However, foreigners made up nearly 50% of home purchases priced above $5 million.
Private home prices edged higher in the third quarter as demand for homes in the prime districts receive a boost from foreign investors seeking safe-haven assets and from buyers drawn to city-centre living.
Data from the Urban Redevelopment Authority (URA) showed that private residential prices rose 0.9 per cent in 3Q 2019, marking a second consecutive quarter of rising home prices.
The biggest winners were properties in the Core Central Region (CCR), where private home prices gained 2.9 per cent sequentially, accelerating from 2.3% in the previous quarter. The uptick was fuelled largely by rising demand for prime and super-lux condos.
In this article, we seek to examine the profile of buyers of luxury homes within the prime districts, as well as buying trends and behaviors in the high-end segment.
Singaporeans make up over 60% of luxury home buyers this year
Based on URA data, Singaporeans accounted for roughly 64% of buyers of non-landed private residential properties within the prime districts between Q3 2018 and Q3 2019.
About 16% of these buyers were Singapore Permanent Residents (PR), while 18% were Non Permanent Residents (NPR) or foreign buyers. About 1% were corporate buyers.
- Private home sales in Singapore’s prime districts
Luxury homes priced between $2 million and $3 million saw the highest number of transactions between Q3 2018 and Q3 2019. Properties within the pricing threshold were also the most popular with Singaporeans, followed by properties between $1.5 million and $2 million, and those between $1 million and $1.5 million.
But foreigners drove sales of pricier properties, leading transactions above $5 million
Non-landed luxury homes above $5 million were most popular with foreign buyers, who made up for nearly 50% of such purchases between 3Q 2018 and 3Q 2019, according to URA data. This was followed by prime district condos between $4 million and $5 million, and those between $3 million and $4 million.
Based on URA caveats, we observed that there were about 403 transactions for luxury condos priced above the $5 million threshold over the past year, and there were about as many Singaporean buyers (30%), as they were Chinese buyers (30%), who purchased such properties. Another notable group is Indonesian buyers, who accounted for about 6% of such property purchases.
Will prices rise further?
Singapore’s reputation as a safe investment haven in Southeast Asia will continue to attract foreign investors, especially amid the ongoing US-China trade war, Brexit and uncertainties which threaten to cast a pall on the global economy. Some Hong Kong tycoons have reportedly moved their personal assets offshore as concern deepens over a local government plan to allow extraditions of suspects to face trial in China for the first time.
Given these factors, we won’t be surprised if home prices continue to rise in the coming quarters.
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