Foreign buyers seem to be holding back from buying homes here in Singapore. The largest fall were from Indonesian buyers, from 112 down to 39 units in the last quarter. Chinese, Malaysian and Indian buyers make up the rest of the buying clout, though there has also been a decline in all segments.
Private home prices have fallen 1.3 per cent in all regions – 1.3 per cent in the central regions, 1.5 per cent in the city fringes and 1.6 per cent in the suburbs. An accumulation of various factors could have impacted the market:
- Tighter immigration and foreign labour policies
- Stronger Singapore Dollar
- Additional Buyers’ Stamp Duty (ABSD)
- Comparisons with other overseas property markets
Photo credit: GoHome.com.hk
Singapore is often compared with Hong Kong, for its size, population and infrastructure. Why then are property prices in Hong Kong skyrocketing while Singapore properties fight to garner foreign buying interest? One of the main factors could be the proximity of the country to China. Mainland Chinese buyers make up the bulk of the foreign buying pool here and Hong Kong is inevitably closer. Should they wish to travel far out, they often look at countries such as Australia, New Zealand or even the United Kingdom and United States. The yuan has also weakened and with the Chinese economy slowing down, Chinese buyers may also be more selective about their choices.
The Indonesian property market is flourishing and in fact, more buyers, even Singaporeans have been buying into the market. Jakarta and Bali are a few of the cities where buyers’ interest have peaked.
How then can Singapore continue to attract foreign buyers and will mere policy changes affect a change?