Number of foreign purchases fall; many buying homes in suburban areas

HIGH-END homes have become the first to buckle under the pressure of volatile market conditions and gloomy buyer sentiment.

Prices of luxury developments dipped in the first three months of this year, even as foreign buyers - a traditional source of demand for such properties - turned to cheaper options.

A report by property firm Savills Singapore released yesterday showed that prices of expensive homes fell 2.1 per cent in the first quarter, after a steady 21/2-year climb that saw values more than double.

Foreigners also began switching from the prime central districts to suburban areas, such as East Coast, Bukit Batok and Serangoon, said Savills.

Its analysis covered luxury developments located in districts 1, 4, 9, 10 and 11, which include Shenton Way, Sentosa, Orchard, Holland, Newton and Bukit Timah. The average price of these homes fell to $2,360 per sq ft (psf) in the period from January to March, from $2,410 psf in the previous three months.

At the very top end, the priciest condominiums registered a 2.9 per cent dip in prices to $3,577 psf in the first quarter, from $3,683 psf in the previous quarter, Savills said. These are developments that have crossed $2,500 psf.

While Savills would not disclose the names of the buildings it analysed, a check of caveats showed that luxury projects such as Ardmore Park and St Regis Residences in Cuscaden Road recently lodged sales at gradually lower prices.

Savills suggested that luxury condos might be more vulnerable to the global credit crisis.

On the bright side, foreign buying islandwide stayed strong despite the softening housing market, it added.

Foreign buyers took up 28 per cent of private homes in the first quarter, up from 25.9 per cent for the whole of last year.

But the total number of foreign purchases fell, in line with the general slowdown in market activity. Foreigners bought only 901 private homes from January to March this year, less than half the 2,245 homes they took up in the same period last year.

Surprisingly, many of the homes they bought were well away from their usual stronghold of districts 9 to 11.

Savills’ report showed that areas as far-flung as Changi and Hougang made it to the most-bought list, while traditionally foreigner-friendly areas such as Shenton Way dropped out of the top 10.

This could be because more of the foreign buyers now are expatriates living here with their families, rather than investors looking for prime assets, said Mr Ku Swee Yong, Savills’ director of business development and marketing.

‘Rentals are still holding up at high levels, and many expats who are more price-sensitive may now be converting from leasing homes to buying them,’ he said.

‘Some of these expats postponed buying homes last year, but now they could be taking advantage of the slowdown in the market to get a good deal.’

This would explain the foreign demand for suburban areas, as expatriates are likely to buy homes in neighbourhoods that have good schools or where they are currently renting houses.

Bolstering this theory is a sudden drop in the number of leasing transactions this year, said Mr Ku. Based on leases that were signed in 2006, there should be a lot more renewals this year than had actually taken place, he explained.

Savills expects private home prices to grow a moderate 5 per cent to 10 per cent this year.

Source : Straits Times - 13 May 2008

The shortage of places at international schools in Singapore shows little sign of easing, even as many have announced expansion plans.

The latest is Tanglin Trust School which says it will add another 700 places from next year.

The situation is of concern among business groups and even the Singapore government.

For many foreign companies, doing business in Singapore is getting more costly. Amidst rising office and housing rents, the growth in expatriates - from 798,000 in 2005 to 875,500 a year later - has worsened the shortage of places in international schools for their children.

David Boden, chairman of Select Committee on International Schools, American Chamber of Commerce, said: “We did a study that started out with 68 respondees, from our members, and they said, ‘yes, we do see an issue’. We have at least 22 of those companies that had probably an additional 200 expatriates coming in the next year, probably 300 children within those families coming…and then found out that about 35 percent actually had kids already on waiting lists, and not just at the American school.”

The Singapore American School has stopped accepting applications from non-US citizens since late 2007.

It now only accepts applications from US citizens, green card holders and children of employees of American companies.

Others, like Tanglin Trust School, guarantee a place in return for a hefty placement fee.

Steven Andrews, CEO of Tanglin Trust School, said: “It’s still possible to gain entry into the school through normal wait list procedures without joining either the Guaranteed or Standard Placement Rights scheme. But for those companies who do want to plan, it is much more helpful.”

About 80 places out of a total enrolment size of 2,250 at the Tanglin Trust School are open to this “placement rights” scheme.

The United World College and more recently, the Canadian International School, are also offering it.

The Canadian International School says its plan is “without question, a response to market conditions”.

For the schools, the placement fees can help provide funds for expansion projects.

The Tanglin Trust School, for example, estimates it can raise about S$80 million from the scheme alone.

The school will enlarge its senior section over the next few years to take in another 700 pupils. The first phase is expected to be ready by September 2009.

It now has 600 children waiting to be admitted in August this year.

That’s just one-third of the queue at the United World College of South East Asia.

Its Dover campus has over 1,900 on its list for August 08 intake.

The length of a wait list can often look intimidating, especially when the numbers stretch into the thousands.

But many international schools say these are sometimes exaggerated, and should be taken with a pinch of salt, as many parents tend to put themselves on multiple wait lists in order to maximise their chances of securing a place for their child.

Joanna Bennett, a Singaporean married to a British national, got her sons enrolled into United World College of South East Asia’s new East campus.

Its 6-ha Tampines campus will open in 2010 and take in 2,500 students. But a temporary East campus in Ang Mo Kio will open next September and take in 440 students.

When Joanna first applied to the Dover campus, she was told the wait could last three years.

But even as expansion plans by United World College of South East Asia and other schools enabled parents like Joanna to move up the queue, wait list numbers are growing.

And many say physical expansion is not a long-term solution.

Schools and business groups want to work more closely with each other and with the Singapore government to better address the issue.

The American Chamber of Commerce, which has convened a select committee on the issue, says its member survey this year will focus on the shortage of places in international schools.

Details are expected to be out in August. -CNA/ir

Source : Channel NewsAsia - 11 May 2008

Prime Minister Lee Hsien Loong said Singapore will continue to develop the financial sector as more activities are being moved to the city-state.

Mr Lee, who was speaking to 120 bankers at the hour-long Thomson Reuters Dialogue on Tuesday, added that more would be done to ease capacity constraints, such as the crunch in office space and accommodation.

The financial sector in Singapore grew by some 17.5 percent last year. But the prime minister said Singapore needs to level up to cope with this upsurge in activities.

He said: “We are running up against constraints because we don’t have enough office space, we don’t have enough accommodation and rentals have gone up.

“We don’t have enough schools for the expatriates’ children. (But) we are addressing this – we are helping the United World College to build a new school in Tampines, and they told me that places are already fully taken.”

Mr Lee added that rentals are likely to come down, with more offices and apartments coming on stream in the next few years.

On the whole, he is optimistic that Singapore will be able to weather the economic slowdown in the US.

Responding to a question, Mr Lee said while the value of export in the electronics sector is down, the volume has increased and there are other sectors that are doing well within the manufacturing sector, such as the pharmaceutical and petrochemical businesses.

On the issue of inflation, the prime minister said food prices will continue to rise for some time as consumption continues to increase.

Another reason for the price hike is an under-investment in the agricultural sector previously. This shortage in food supply has resulted in hoarding and some countries have limited the export of rice.

Mr Lee said he hopes ASEAN member countries can coordinate efforts and not work against one another so as to ensure that rice gets to the people.

The topic of foreign talent was also raised at the dialogue session. Mr Lee said that like London and New York, Singapore needs to tap on a range of expertise from all over the world.

“We are not only a city, we are a country. We have to have a hard core of Singaporeans so that the character of the place remains Singaporean, while being cosmopolitan,” he said.

As for leadership renewal, Mr Lee said Singapore needs to keep it contestable while focusing on building a good team that can meet future challenges and find new ways of engaging the population.

Source : Channel NewsAsia - 6 May 2008

MYANMAR nationals seem to congregate in the western part of Singapore, going by the number of shops catering to them which have sprung up there.

At least seven of them, mainly provision shops and mini-marts, have surfaced in Clementi, Boon Lay and Jurong East over the past two years.

On sale are Myanmar fare such as pickled tea leaves, preserved fruit jam and Myanmar noodles.

Ms Aye Aye, 29, opened Kaung Zone mini-mart in Clementi in 2006 after noticing that the area was home to Myanmar students from the nearby Singapore Polytechnic and the National University of Singapore. ‘Most of them come here to buy phone cards every week to call their loved ones at home,’ she said.

Like other shops catering to the community, she offers a faxing service for those who want to send documents home.

These neighbourhood shops are welcomed by the community, whose members usually have to make their way to Peninsula Plaza in North Bridge Road. That is another hub for Myanmar nationals, with over 100 shops there catering to them.

NUS postgraduate student Kyaw Swar, 27, shops at a mini-mart two blocks away from his three-room HDB flat. He said: ‘It’s so convenient to buy my daily essentials here. I head to Peninsula Plaza for that weekly big shopping trip.’

Source : Straits Times - 3 May 2008

MYANMAR nationals are making their presence felt here, not just in their red T-shirts joining the queue outside their embassy to vote on their country’s new Constitution, but in other sectors of Singapore too.

The Myanmar Embassy, in St Martin’s Drive, estimates that there are 100,000 of its nationals living here, up from 60,000 at the beginning of last year.

This 40,000 jump in numbers has been fuelled by the unrest in their country, which was triggered by the ’saffron’ protest in August last year when monks demonstrated against the rising price of fuel.

Some 75,000 people fled their homes in East Myanmar amid the conflict, which left about 500,000 displaced.

Most of the Myanmar nationals here hold employment passes or work permits, and work in accounting, engineering and construction. More are also arriving to work as maids.

Most come here in search of money and a better life.

‘There are more opportunities here and we can get access to the Internet, a wide range of books and reference materials from the library,’ said Ms Ei Thet Khine, 29.

She came here in 2006 to work as an assistant accountant, while studying to be certified as one.

Mechanical engineer Maung Pho, 31, said Singapore has given him a chance for a better life. His $3,400 salary pays for the rent on a two-room HDB flat in Jurong West and supports his wife and two-year-old daughter.

‘The same job in Myanmar would pay me only $60 a month. How could I feed my family?’ he said.

The presence of well-heeled Myanmar nationals is also being felt in the property sector. They made it into the Urban Redevelopment Authority’s top 10 list of foreign buyers of private property last year for the first time in the last decade.

Last year, Myanmar nationals bought 159 condominium apartments, said Mr Joseph Tan, executive director (residential) at CB Richard Ellis.

Popular areas include Little India, Buona Vista and Boon Lay.

Myanmar youth are also filling up classrooms here.

While the Education Ministry declined to give figures, Myanmar student networks say they number about 5,000. The students are enrolled in all levels of government schools and at tertiary and private language institutes.

Partly driving those numbers is the Singapore Tourism Board’s (STB) aggressive effort since 2006 to promote Singapore to Myanmar students.

That year, its education exhibition in Myanmar’s biggest city, Yangon, drew about 1,500 people. Last year, 2,700 showed up, said STB director of education services John Gregory Conceicao. It now plans to open an education information centre there.

Mr Gregory Lye, general manager of Education Unlimited Singapore, one of the largest agencies which match foreign students to schools, said he placed 60 Myanmar students in private and government schools last year.

Madam Zin Zin, a Myanmar ’study mama’, explained: ‘Over here, my children learn more about the outside world and can ask questions, something they can’t do back in Myanmar.’

Her son is in his final year at Temasek Polytechnic and her daughter is in Whitley Secondary School.

The 53-year-old housewife and part-time tutor, who holds a master’s degree in science, plans to sink her roots here by getting permanent residency and a job.

Despite the rising cost of living and struggles with learning English, most Myanmar nationals say roughing it out here beats going back to a home still in a state of unrest.

An administrative executive who arrived here last year and gave her name only as Nyunt, said: ‘Even if it means cutting down on my expenses and eating out less here, I’d rather do that than go back.’

Source : Straits Times - 3 May 2008

THE rising cost of living, high residential rents and expensive office space are among contentious issues that plague the American expatriate community here.

However, these cons are outweighed by the benefit of being able to participate in global trade. ‘Singapore is a good place to do business, especially for our members who are so regionally focused,’ Steve Okun, the newly elected chairman of the American Chamber of Commerce (AmCham) Singapore, told BT. AmCham Singapore represents almost 2,700 members from more than 500 companies, and over US$25 billion of investments in Singapore.

Going forward, AmCham will look at broadening its reach to make it even more regionally focused, especially as Asean moves towards integration.

A prime opportunity to do this will be in 2009, when Singapore hosts the Asia-Pacific Council of American Chambers of Commerce (APCAC) meeting in March. It will be attended by local and American government officials, AmCham leaders and representatives of multinational companies and Asian small and medium-sized enterprises.

About 15,000 American expats live in Singapore. And the number has been rising despite a 2006 tax law change in the US that significantly increased the burden on Americans working overseas. APCAC, with other member AmChams, is lobbying to change the taxation, which has been labelled unfair.

‘The number of Americans in Singapore has increased 25 per cent in the past two years,’ said Mr Okun, raising the possibility that the tax change could have deterred even more Americans from moving overseas.

Another major problem for American expats is the limited number of places at international schools here, which has resulted in waiting lists, employers having to pay to procure ‘enhanced placement rights’ and even examples of ‘key employees’ being unable to relocate to Singapore because their children could not get a place in school.

Earlier this week, AmCham announced a new committee to address the education problem and will liaise with the government, foreign schools and AmCham members. This way, ‘decision makers can make more informed decisions’, said Mr Okun.

Source : Business Times - 26 Apr 2008

Foreigners could be switching from leasing to buying property, says Savills Singapore

Residential leasing transactions have stagnated in the past two years after falling from a recent high of 33,874 in 2005.

According to an analysis of Urban Redevelopment Authority data by Savills Singapore, transactions were about 15 per cent lower at 28,928 in 2006 and 28,893 in 2007, versus 2005.

Savills Singapore director of marketing and business development Ku Swee Yong said that as leases are generally renewed on a two-year basis, the drop between 2005 and 2006 should imply a rise in 2008.

But figures for the first two months of this year indicate that residential leasing is not likely to pick up. Indeed, Savills’ analysis reveals only 3,495 transactions.

The lowest number of quarterly transactions since the start of 2000 was 4,024 in Q1 2003, while the high of 9,917 was recorded in Q3 2005.

Mr Ku, who reckons foreigners make up about 90 per cent of the leasing market here, said it will be important to watch the figures over the next few quarters.

He thinks fewer financial-sector expatriates may relocate here due to the global credit crunch.

But according to some foreign business associations, there has been no let-up in the influx of expatriates so far.

American Chamber of Commerce executive director Dom LaVigne said: ‘Due to the strong business conditions in Singapore and based on what we’ve heard from our members hiring more employees, we think that the number of American expats living here will continue to rise in the coming years. Two years ago, there were 14,000 Americans in Singapore. Today there are 15,000 Americans and more than 3,000 US businesses here.’

The number of British expatriates here has also increased over the past two years, with the British Chamber of Commerce (BCC) saying about 20,000 British nationals now live in Singapore.

BCC spokesman Roman Scott, who is also managing director of the Calamander Group, said: ‘Although everyone is moaning (about rents), it’s mourning the end of a particularly good deal, not complaining that the recent sharp rises are unfair.’

BCC, which tracks the cost of housing and offices, believes the rise in rents is a function of market forces and a ‘long-overdue cyclical correction from artificial lows’.

Pointing out that rents fell sharply 10 years ago, Mr Scott said: ‘Given that real wages and wealth have actually risen in those 10 years in Singapore, this means rents are still cheaper in real terms than the previous high 10 years back, and affordable compared with other global cities, particularly Hong Kong and Tokyo.’

Rents, however, have been increasing rapidly. Based on Savills’ basket of properties, rents for high-end homes increased about 30 per cent year on year in Q4 2007. Savills noted that a 2,885-sq-ft unit at Ardmore Park was recently leased for $20,000 a month or about $7 per square foot (psf) a month.

For high-end properties, Savills says the quarterly average rent is now $6.68 psf a month.

January saw a particularly low number of new leases, with just 1,474 transactions. District 10, the most popular district, suffered a 42.2 per cent drop to 203 transactions, compared with 351 a year earlier.

Other districts in the top five, including districts 15, 9, 14 and 16, saw transactions fall 39.2, 50, 19.8 and 43.2 per cent respectively.

A shrinking pool of leasing properties due to collective sales could have exacerbated the drop in numbers, especially in the prime districts. But as Savills’ Mr Ku points out, demand should have spilled over into other districts, keeping the overall number of transactions up.

He believes foreigners could be simply switching from leasing to buying property.

‘This was helped by the attractive low cost of mortgages in Singapore and also the favourable tax advantages foreigners from certain countries enjoy from owning properties in Singapore,’ he said. ‘We certainly saw many tenants convert from leasing to owning in 2006-2007, starting with a change in US Federal Tax on US nationals’ housing benefits overseas.’

A separate analysis of property data by Chesterton International seems to support this assertion.

Comparing data from 1995 - during the run-up to previous property market peak - and 2007, Chesterton’s head of research and consultancy Colin Tan notes that while the percentage of foreigners, including permanent residents (PRs), buying non-landed private property increased from 17.9 per cent in 1995 to 29 per cent in 2007, the percentage of acquisitions by PRs alone doubled from 6.7 per cent to 14.4 per cent.

The relevance of this, according to Mr Tan, is that PRs tend to buy for owner-occupation while foreigners are more likely to buy for investment.

He said: ‘In recent years we have seen many purchases by Indian and Chinese nationals who are buying for owner-occupation, not investment. These people eventually become citizens. I personally know a number of them.’

Source : Business Times - 8 Apr 2008

Rising rents, influx of foreign talent set to spur demand for homes, say analysts

THE attraction to foreigners of buying a non-landed home in Singapore isn’t expected to wane in the mid- to longer-term, say property experts.

Jones Lang LaSalle’s head of research (SE Asia) Chua Yang Liang expects the ratio of foreign buying to be maintained in the short term - because of sub-prime uncertainty - but to increase moderately in the medium to longer term.

‘A key factor is that residential rents have moved up quite a fair bit, and the low interest rate environment will encourage more foreigners and PRs (living here) to consider taking up home ownership,’ he added. This, of course, is assuming that they can get loans.

Another factor that will contribute to the trend is the government’s policy of encouraging more immigration into Singapore to power the Republic’s economic growth, say market watchers.

Knight Frank executive director (residential) Peter Ow notes that non-PR foreign investors were last year a major buying force especially in the Core Central Region (CCR), drawn by the story of Singapore’s transformation into a global city and its ambitions to be a hub in many fields - including financial, healthcare, education, R&D.

‘The implication is that Singapore’s property prices, especially in CCR, will be more affected by events in the rest of the world such as the sub-prime crisis which is now unfolding.

‘But that’s not necessarily a bad thing. If the situation worsens overseas and international investors view Singapore as a safe haven, that could draw more foreign funds to the local property market, especially in the CCR,’ Mr Ow reckons.

‘Increasingly, we may see more foreigners who will be able to afford properties in CCR. That also explains why some high-end residential developers are feeling pretty confident that prices will not slide in the luxury tier, as demand is being supported by foreign investors looking for a place to park their monies,’ Mr Ow said.

A 12 percentage-point slide in Singaporean buyers’ share of private apartments/condo purchases in the Outside Central Region - which covers mass-market suburban locations, the staple of Singaporean upgraders - between 2000 and 2007 revealed in JLL’s study may have implications on that perpetual Singaporean dream - of upgrading to a private condo.

‘The authorities may have to ramp up supply of the high-end of public housing, like the Design, Build and Sell Scheme (DBSS), and executive condos (ECs) to cater to local home buyers,’ Mr Ow suggests.

ECs are condominium housing that have resale and other restrictions in the first 10 years, while DBSS are public housing flats designed, built and sold by private sector developers.

DTZ executive director Ong Choon Fah also says these housing types will help meet the aspirations of Singaporeans who feel priced out of private housing. ‘There’s a right product for everybody. We must understand that in a global economy, there is open competition. We must embrace meritocracy. Anybody can buy the product if they can pay. To survive, Singapore must keep attracting the best.’

Source : Business Times - 27 Mar 2008

S’poreans buying more private homes but their share is still falling as foreigners outpace them

Take a walk down some of the poshest parts of Singapore and your eyes will confirm precisely what the numbers say. With its immigration-friendly policies and its growing attraction for wealthy individuals across the world, Singapore is seeing more foreigners than ever before parking their funds in private property here - especially in the Core Central Region (CCR).

Singaporeans, too, are buying more private property but, in relative terms, their share is dwindling because of the foreign influx.

Result: From a 77 per cent share in the purchases of private apartments and condo units here in 2000, Singaporeans have seen their slice drop to 63 per cent in 2007, according to a study by Jones Lang LaSalle. This is their lowest share since 1995, which is as far back as the caveats captured by Urban Redevelopment Authority’s Realis system go.

Conversely, foreigners (including permanent residents) accounted for 29 per cent of non-landed private homes purchased here last year - nearly double their 16 per cent share seven years earlier and also their highest ever.

Companies account for the remaining purchases.

Market watchers expect the trend to continue in the mid- to long-term. ‘We need the external talent to support Singapore’s economic growth in the long term, as the citizen population has not been replacing itself sufficiently,’ says JLL’s head of research (SE Asia) Chua Yang Liang.

JLL’s study shows the trend of declining ratio of Singaporeans among non-landed private home buyers was most apparent in CCR - which has been a hotbed of purchases by foreign investors.

Here, Singaporeans accounted for 47 per cent or less than half the caveats lodged for the purchase of non-landed private homes last year, while foreigners (including PRs) had a 41 per cent share, nearly double their 21 per cent share back in 2000, according to Jones Lang LaSalle’s analysis.

Foreigners who are not PRs have shot up the buying charts. They picked up 26 per cent of non-landed homes that changed hands in CCR last year, compared to their 11 per cent share seven years earlier. CCR includes the prime districts 9,10 and 11, Downtown Core location and Sentosa Cove.

DTZ executive director Ong Choon Fah likens the luxury residential sector in CCR to Central London, with a high proportion of foreign ownership. ‘We’ll have to accept that Singapore will be open to international competition, with funds and high net-worth individuals coming in. People who cannot afford to live in these areas will have to find alternative locations,’ Mrs Ong says.

JLL’s study showed that even in the Outside Central Region (which covers suburban locations and is a realm dominated by typical Singaporean home upgraders), the share of foreign buyers (including PRs) went up to 22 per cent last year from 13 per cent in 2000.

In the Rest of Central Region, which covers the mid-tier market, foreigners’ (including PRs’) share increased from 18 per cent in 2000 to 29 per cent in 2007. The percentage of non-landed homes bought by Singaporeans in the area fell from 74 per cent in 2000 to 61 per cent last year.

Jones Lang LaSalle analysis covered caveats lodged for the purchase of non-landed private homes in both primary and secondary markets (including subsales).

Overall, the absolute number of such properties purchased by all categories of buyers has increased over seven years. The total caveats lodged for purchases of apartments/condos more than tripled, from 9,347 in 2000 to 30,576 last year. Even though Singaporeans bought more than they did in 2000, their share fell as purchases by foreigners saw higher percentage gains.

Islandwide, the number of private apartments/con- dos bought by Singaporeans jumped 165 per cent from 7,225 units in 2000 to 19,154 units last year.

Over the same period, the number of private apartments/condos bought by foreigners (counting PRs as well) leapt 496 per cent from 1,491 units in 2000 to 8,884 units in 2007.

The increase was due partly to the influx of foreign talent into Singapore. ‘As birth rate of the citizen population is below replacement level, in-migration has been necessary to sustain economic growth. As at end-2007, Singapore’s total population stood at 4.588 million, with well over a million foreigners. This is a 33 per cent increase from the 750,000 foreigners as at-end 2000,’ JLL says.

Source : Business Times - 27 Mar 2008

Their purchases could account for half of 2007 transactions on the secondary market

A record number of foreigners here have opted to purchase homes instead of renting them at ever-climbing rates.

According to an analysis of transactions of private residential properties by DTZ Debenham Tie Leung, foreigners bought 6,536 non-landed homes from the secondary market in 2007 - the largest number since 1995.

They could account for more than 50 per cent of the secondary market transactions last year.

That is because while more than 20,000 non-landed homes were sold on the secondary market last year, this number includes the units from more than 100 collective sales. DTZ’s analysis does not include en bloc units - though earlier reports had put this figure at around 6,000 for the first half of 2007 alone.

Purchases by foreigners on the secondary market represent a 105 per cent increase in volume compared to 2006.

DTZ research senior director Chua Chor Hoon said that while some buyers were investors, there were also those who ‘are not on company budget and find it more worthwhile to buy rather than face escalating rentals, especially if they are going to be in Singapore for more than a couple of years’.

DTZ’s figures for 2007 reveal that rents of prime apartments and condominiums increased 45 per cent year-on-year in 2007 to average $4.80 per square foot (psf). This was attributed to the influx of expatriates and a tight supply of prime apartments, as numerous prime developments were demolished or slated for redevelopment after being collectively sold.

The percentage of foreigners buying non-landed property from the primary market (developer sales) was lower at 25.4 per cent, or 2,314 transactions out of a total of 9,089, reinforcing the assertion that foreigners are more inclined to buy a home for immediate occupation.

Indonesians and Malaysians remain the biggest foreign buyers here, accounting for 23 and 17 per cent of all foreigners in 2007 respectively, but Indians (12 per cent), Britishers (8 per cent), Chinese (7 per cent) and Koreans (7 per cent) are also well represented.

While foreigners bought non-landed homes in record numbers last year, boosting demand in the process, their absence in the landed homes sector (because of restrictions imposed by the government) did not stop a record number of landed homes being sold in the secondary market.

DTZ’s analysis reveals that of the total 5,211 landed homes sold in 2007, 4,823 were from the secondary market.

Apart from the bullish sentiment which ’spilled over’ from the non-landed sector last year, the landed sector also saw demand rise as it was still considered comparatively good value.

DTZ’s figures show that average capital values for non-landed freehold homes in the prime districts increased by 55 per cent year-on-year to $1,480 psf.

For freehold landed homes in the prime districts, average capital values of detached homes increased 31 per cent year- on-year, while average capital values of semi-detached and terrace homes rose 29 and 27 per cent respectively.

The situation was also exacerbated by the tight supply of new launches of landed homes in the year, estimated at around 650 units.

DTZ’s Ms Chua also believes that with speculation less rampant in the landed housing sector - ‘most buyers are owner-occupiers’ - prices are expected to be more stable and could even prove ‘more resilient’ if the downturn in the global economy is protracted.

However, DTZ expects future supply of landed homes to be relatively low at just 3,100 units over the next few years, so this could push up demand and prices for both primary and secondary market landed homes.

Speculation, defined by the number of subsales, was rampant among developer sales of non-landed homes last year, hitting an all-time high of 4,631 transactions - a 312 per cent year-on-year increase over 2006.

Interestingly, while subsale transaction volume in 2007 was just 27 per cent higher than during the previous peak of 1996, the value of subsales was almost twice as high, hitting $7.9 billion.

The fourth quarter, however, marked a shift in sentiment in the property market. Only 3,947 non-landed homes were transacted in the quarter, of which just 846 were sold by developers, reflecting a 64 per cent quarter-on-quarter drop. This was one of the worst performing quarters in the last three years.

Source : Business Times - 12 Mar 2008