SINGAPORE: Foreigners buying private apartments in Singapore fell to a 17-year low in 2020 as travel restrictions and closures during the coronavirus pandemic prevented them from coming to the city.
Unit purchases fell to 742 in the last year, according to Singapore-based property consultants ERA Realty Network and OrangeTee & Tie Pte.
This is the lowest since 2003, when non-permanent residents purchased 671 units during the SARS epidemic. The numbers are based on analysis of government data as of Tuesday that takes into account new, sub-sold and used apartments.
The two-month lockdown in Singapore last year brought an end to viewing and display units closed.
Even as the country loosens restrictions on viruses, border restrictions are still largely in effect globally, preventing foreigners from traveling to the city-state to purchase units.
“In the luxury market, many buyers prefer to physically inspect the buildings or visit a showroom before purchasing,” said Christine Sun, Senior Vice President of Research and Analytics at OrangeTee & Tie.
“In the past year, many foreign buyers were unable to travel to Singapore to see real estate for themselves, which could lead to a decline in foreign purchases.”
Non-permanent apartment purchases in 2020 accounted for only 4.1% of total sales, the lowest level in more than two decades, according to government data compiled by ERA Realty Network and OrangeTee & Tie.
Singaporeans currently make up the largest proportion of buyers, according to government data. The contribution of that group increased by two percentage points to 80.2% last year from 2019.
“Through the anecdotal stories, we have also noticed more Singaporeans reducing their overseas investment,” Sun said, adding that many view Singapore’s currency and economy as more stable than other markets.
Nicholas Mack, head of research and consulting at APAC Realty Ltd, ERA unit, said sales among foreigners could gradually increase with the launch of vaccines and developers launching more projects this year after the downturn in 2020.
He added that this is based on the assumption that the government does not issue another round of cooling measures.
Rising interest among locals has led to higher sales and prices, raising concerns that authorities may issue policy restrictions.
One step they might consider is increasing stamp fees for foreigners, according to an analysis by DBS Group Holdings Ltd.
The top of the charts
Mac said that while purchases by the Chinese, excluding those with permanent residency, fell to 215 last year from 339 in 2019, they are still pouring into Singapore due to its political, financial and legal stability.
“Singapore is one of the friendliest countries” for Chinese buyers, Mac said.
“Since the population of the middle class in China is so huge, just buying a fraction of them for apartments in Singapore can cause a huge increase.”