Why locals in Singapore are buying more homes now than they have in the past decade

Foreign buyers are facing increasingly "punitive" measures

May.May 04, 2019 02:00 PM

Downtown Singapore (Credit: iStock)

Domestic buyers accounted for the largest percentage of home purchases in Singapore in a decade, signaling local confidence in the future of the island nation.

Singaporeans bought about 79 percent of the private apartments sold in the first quarter, the largest domestic share in Singapore since the first quarter of 2009, according to Bloomberg.

Property consultants OrangeTee & Tie Pte. also reported that luxury units accounted for 69 percent of private apartments sold in January, February and March, up sharply from 36 percent in the first three months of 2018. Luxurious bungalows, reserved only for local buyers, reported record prices.

During the quarter, developers sold the largest number of ultra-luxe new condos – those with prices topping S$3,500 ($2,750) per square foot – in more than 10 years. Prime residential units in Singapore sell for around $1.2 million, and monthly rent averages $1,935.

Christine Sun, head of research and consultancy at OrangeTree, said the trend shows confidence among affluent domestic buyers. A PropertyGuru survey of locals in Singapore also found young adults are moving out of their parents’ home earlier in life, and many existing apartment owners want to upgrade to executive condominiums.

Local buyers’ strength in the market comes as the government has been tightening regulation to prevent property prices from soaring, despite reports early last year that measures were easing. Christine Li, head of research in Singapore at Cushman & Wakefield Inc., said government policies “punitive” to foreign buyers reduced the first-quarter percentage of apartments sold to them. In July 2018, the government of Singapore raised stamp duties for apartment buyers, setting the highest rate at 20 percent for foreigners. [Bloomberg] – Mike Seemuth

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