Chinese nationals made up the largest number of non-resident home buyers in Singapore in the second quarter of the year, as many found the Southeast Asian country to be more stable than its regional peers and worth the hefty tax on foreigners owning property.
Mainland Chinese bought 391 apartments and condominiums in Singapore last quarter, according to data compiled by Singapore-based real estate agency platform OrangeTee & Tie, up from 281 in the first quarter.
Purchases by Chinese citizens hit a record 467 in the second quarter of last year, followed by two more quarters of over 400, before falling as the Omicron variant stifled inbound travel.
More wealthy Chinese are buying investment properties, often newer luxury apartments, according to Christine Sun, senior vice president of research and analytics at OrangeTee & Tie.
“Right now, what we’re seeing is that a lot of Chinese buyers are looking for luxury properties to park their money,” Sun said on Wednesday (August 17).
The country is “politically stable” and free from natural disasters, she added, with some Chinese already living there to study and do business.
About a third of the city-state’s nearly six million residents also speak Mandarin, while Chinese expats make up Singapore’s second-largest group, at 426,000, after Malaysians.
And compared to other parts of Southeast Asia, Singapore lacks “economic uncertainties”, real estate technology firm Juwai IQI said in its third-quarter 2022 outlook.
Juwai IQI co-founder and CEO Kashif Ansari called it “stable and well-regulated”.
“They buy there to diversify their wealth, so they are less vulnerable to relative changes in exchange rates and [gross domestic product] growth,” Ansari said.
Singapore’s reputation as a Chinese “gateway” city to other countries also adds appeal, he added.
Chinese nationals had long been shopping in the city-state’s suburbs and living in their apartments, Sun added.
She said buyers have been able to view the apartments in person again since Singapore lifted Covid-19 restrictions in April.
Affluent people have always bought, based on floor plans and virtual tours of properties, Sun said, noting that buyers have generally opted to stay in China during the pandemic to avoid a lengthy quarantine upon their return.
A surge of luxury homes built over the past year is giving overseas buyers plenty of choice from Singapore’s total volume of around 1.2 million apartments, Sun said, with prices as high as $3 million. dollars per unit.
About half of Chinese buyers live in their apartments, with the rest owning only to invest or rent the units, Sun said.
However, foreign buyers of property in Singapore are at a price disadvantage, being subject to a 30% stamp duty on residential purchases since January.
They face “significant taxes and duties,” notes James MacDonald, head of Savills Research China.
Investments are often made to obtain immigration clearance or as part of a wealth management portfolio, he added.
“Chinese nationals who buy overseas tend to be relatively affluent – they either have children studying overseas, parents, or frequent business travelers,” MacDonald said.
He also noted that some Chinese are choosing to buy vacation homes in Thailand and investment properties in Vietnam instead.
Homes sold to foreign buyers from all countries numbered 1,172 in the last quarter, down from 873 in the first three months of the year.
Units sold to Malaysians in the second quarter totaled 218 units and Indian nationals purchased 123.
This article was first published in the South China Morning Post.