The Housing & Development Board (HDB) is checking to see if buyers are using its government-subsidised flats to speculate in the property market – even as resale flat prices hit a new high in the fourth quarter of 2009.

‘There are some people who are saying that people are buying HDB flats for speculation,’ said Minister for National Development Mah Bow Tan. ‘So let’s look at that, see whether it is really happening and if so, whether any of our rules are allowing it to happen.’

Speculation ’shouldn’t be’ taking place as HDB flats under the government’s home ownership programme are for people to live in, Mr Mah added. He was speaking to reporters on the sidelines of the International Housing Conference on Wednesday.

The minister has asked HDB to relook its rules to make sure that prices are not being artificially inflated. ‘I have asked HDB to review its rules and see whether there are any rules that are encouraging and allowing people to speculate in HDB flats,’ he said.

The move comes as HDB resale prices hit a new record in Q4 2009, with prices climbing 3.9 per cent from the previous quarter. The median cash-over- valuation (COV) for all resale transactions doubled to $24,000 in Q4 from $12,000 in Q3.

Answering questions on whether HDB flats were still affordable, Mr Mah noted that the resale market should be allowed to operate as a free market, with prices set on a ‘willing buyer, willing seller’ basis. So if there is ‘genuine’ demand, prices will climb.

But he drew the line at speculation and stressed that public housing is for owner-occupation. He did not say which rules are being studied, but added that the review should be completed in a few months’ time.

Aside from reviewing regulations, Mr Mah said he has also asked HDB to step up enforcement. ‘I’ve asked HDB to also step up on any possible breaking of the rules. I don’t know if it’s extensive, but anecdotally you do hear of one or two cases,’ he added. ‘We want to make sure that this is not happening.’

Analysts BT spoke to said that there was little speculative activity in the HDB market – in the sense that few buyers are buying flats with the sole purpose of flipping them.

‘In my opinion, there is little or no speculative activity in the HDB market. I think the existing rules are relatively adequate,’ said PropNex Realty chief executive Mohamed Ismail.

Under existing rules, home buyers who receive a grant from HDB can sell their flats only after five years. Singaporeans who choose not to take up grants – as well as PRs who are not eligible for any grants – can sell their flats after a year if they have not received a loan from HDB.

However, there are concerns that people could be buying flats for rental investment. Recent media reports have suggested that some flat owners at the newly completed Pinnacle@Duxton have rented out their entire units without a minimum occupation period. This is illegal under HDB’s rules.

But market watchers pointed out that it will be difficult to check if an HDB flat is being occupied solely by renters.

Going forward, HDB will launch another 12,000 new flats this year as demand for public housing grows. Some 7,000 flats will be pushed out in just the first half of 2010.

‘So long as there is demand, so long as there is a genuine take-up rate, HDB will build,’ Mr Mah said.

Source: Business Times, 29 Jan 2010

THE home buying buzz continues at showflats. Allgreen Properties is said to have sold 54 units at its Holland Residences condo at Taman Warna released this week. The average price of the 68 units released in the 83-unit project is $1,625 per square foot; but the figure is weighed down by private enclosed spaces for ground-floor units in the five-storey freehold project.

Singaporeans bought 80 per cent of the units sold, says Joseph Tan, executive director at CB Richard Ellis, which is marketing the project.

In a more upscale location, a joint venture between BBR Holdings and SP Tao’s Shing Kwan Pte Ltd has sold seven of the total 16 units at its six-storey freehold 8 Nassim Hill project since last Friday. The development is expected to receive Temporary Occupation Permit at the end of March this year.

The project comprises eight townhouses and eight penthouses – all of them triplex units spanning across three levels. The townhouses occupy the project’s lower three levels and range from about 4,200 sq ft to 4,500 sq ft, while the penthouses, which are on the upper three storeys, are about 3,200 sq ft each. Each of the 16 units has its own swimming pool; each townhouse also has its own garden at the back.

The 16 units are priced between $3,100 psf and $3,400 psf or $11-14 million apiece. Singaporeans bought two of the seven units sold so far; the other five were picked up by foreigners – from Europe and Hong Kong.

In the Beach Road area, Hong Fok Corporation is said to have recently released upper-floor units at its 99-year leasehold Concourse Skyline priced at $2,200 psf to $2,400 psf. The 360-unit development reaches up to 43 storeys.

Over at Holland Residences, one-bedroom units (601 sq ft) and two bedders (ranging from 957 to 979 sq ft) were the first to be snapped up at this week’s preview.

The project also has three- and four-bedroom units as well as penthouses. Prices of one bedders start from $1.06 million. Two bedders cost between $1.63 million and $1.73 million. The most expensive units sold was $3.6 million for a four-bedroom duplex penthouse.

The average price of $1,600 psf for Holland Residences is higher than the $1,500 psf at which Ho Bee is selling its nearby Parvis, a 12-storey condo at Holland Hill.

However, there are no one-bedroom units in Parvis; developers typically can command a higher per square foot price for smallish units as the lumpsum amount is still relatively small.

Hence the tendency among some developers to build projects with a higher proportion of smallish units to achieve a higher overall average psf price for the development.

At a Knight Frank auction yesterday, a 1,206 sq ft unit on the 10th floor of Leedon 2 changed hands for $1.38 million or $1,144 psf. Leedon 2, a freehold development, is said to be more than 20 years old.

Source: Business Times, 29 Jan 2010

inTHE Housing Board will launch new flats every month over the next six months in response to growing fears that demand is outstripping supply.

National Development Minister Mah Bow Tan, speaking on the sidelines of a housing event on Wednesday, said that ‘HDB will build flats to meet demand as long as there’s genuine demand’. It is looking to offer 7,000 new flats in the first half of this year and is planning 12,000 for the whole of 2010.

For higher income earners who aspire to own private property, Mr Mah said the HDB was catering to this group by selling land for development into executive condominiums – a hybrid flat with condo facilities but HDB rules.

He assured first-time buyers that there was no need to rush into buying, given that there are ‘more than sufficient flats’. ‘If there is even stronger demand, of course HDB will build even more flats,’ he said.
Mr Mah claimed the high subscription rates at recent launches – at popular projects such as Dawson, where 11 applications were received for every flat – was not a measure of genuine demand.

‘We know that many of them are multiple applicants…they apply every month to make sure they have a better chance…that means the number of subscribers may appear large, but it doesn’t mean that that is the total demand,’ he said.

‘The final test is when we finally offer the flats to these buyers, (we’ll) see what the take-up rate will be.’
The minister emphasised that if there was real demand, the HDB would respond with its build-to-order (BTO) scheme.

‘As the name suggests…you order, we build. That’s the situation.’

Mr Mah pointed out that waiting for a flat to be built was not new. In the past, home buyers have had to wait for as long as seven years for a flat, he said.

Under the BTO scheme, HDB is ‘promising, in a way…that you will get your flat in three to four years, once you have booked it.’

Source, Straits Times 29 January 2010

THE Housing Board is embarking on a review of its rules to ensure that property speculators are not abusing the system – and driving up flat prices.

It will check if any rules are ‘encouraging or allowing’ people to speculate on HDB flats, said National Development Minister Mah Bow Tan.

At the same time, it will step up efforts to make sure people do not get away with abusing the system.
Some disgruntled homebuyers, priced out of a rising market, worry that some HDB buyers are exploiting the rules to try to make a fast profit.

They claim these speculators snap up flats on the resale market and then either rent them out illegally or sell them legally after the stipulated one-year period.

Under HDB rules, citizens and permanent residents who buy resale flats without housing grants or HDB loans must live in the flats for at least one year before selling, or at least three years before renting out the entire flat.
Speaking on the sidelines of a housing conference hosted by the HDB on Wednesday, Mr Mah said these claims were worth checking and he wanted to ensure that such factors were not inflating the market artificially.
He said it would not do if buyers were buying flats because they hoped to make money through flipping or selling the flats later on, or by renting them out without living in them.

He did not know how prevalent such practices were, but added that ‘anecdotally, you do hear cases, so I want to make sure that this is not happening’.

The HDB’s findings will be out in a couple of months, he said.

Industry observers said that if there were speculators, they would be less likely to be flipping HDB flats – reselling them quickly – and more likely to be renting them out.

‘HDB flats in good locations enjoy very high rental yields, up to 7 or 8 per cent. Even if owners are not legally allowed to rent out their whole flat, you hear of creative cases where they do so anyway,’ said ERA Asia Pacific associate director Eugene Lim.

Agents said an owner might lock up a room to make it seem he is still living there, even though he has rented out the entire flat.

Chesterton Suntec International research and consultancy director Colin Tan said this has gone on for years, but these cases were hard to prove and needed a major effort to enforce.

Mr Mah acknowledged that recent housing data had raised fresh concerns about high resale flat prices.

Latest HDB figures showed the median cash amount paid by buyers for resale flats over and above a flat’s valuation, known as Cash-over-Valuation (COV), doubled to $24,000 in the last three months of last year compared to the previous quarter.

Resale flat prices also rose 3.9 per cent in the final three months of last year to hit a fresh record, taking the full-year jump to 8.2 per cent.

Mr Mah said the Government did not wish to meddle in the resale market, and COV payments were part and parcel of the market.

‘If you’re a buyer, you feel anxious, understandably you want prices to be low. But if you’re a seller, you want prices to be high. It’s not possible for the Government to set the resale prices,’ he said.

‘The buyer might be happy today, but tomorrow he’s a seller and if we set the prices of what he wants to sell, he’ll be unhappy.

‘Let the price be set by willing buyers and willing sellers. We don’t, and should not, interfere in the resale market.’

Mr Mah also downplayed the impact of permanent residents on the resale market.

‘Our numbers show that the PRs are buying about 20 per cent, or one in five flats sold. So yes, they do have some impact, but they don’t have such a great impact,’ he said.

Asked if PRs should be restricted from buying in the resale market, Mr Mah said that was not the right thing to do.

PRs also need a place to live, he said, and the solution was to make a clear distinction between Singaporeans and PRs in terms of the grants they get.

Source, Straits Times 29 Januray 2010

THE former sleepy fishing village of Punggol is to undergo a green makeover that will transform it into Singapore’s first ‘eco-town’.

National Development Minister Mah Bow Tan said on Wednesday that the northern coastal town is to serve as a testbed for innovative green technologies.

Testing such technologies at Punggol will allow the Housing and Development Board (HDB) to lower the implementation cost of these solutions and to replicate them across other towns, he added.
The HDB sees Punggol, one of Singapore’s younger towns, as being ideally placed to undergo the planned transformation.

It is already home to HDB’s first green housing project, Treelodge@Punggol, which features solar panels and rainwater recycling.

A waterway is being built at Punggol that will feature green landscapes and bring nature closer to residents.
The town has small, intimate estates featuring common green areas, accessible amenities and a well-integrated public transport network.

The HDB hopes the town’s green living environment will raise awareness of environmental sustainability.
To bring about Punggol’s revamp, it will be working with government agencies and private sector firms in the areas of energy, waste and water management.

The HDB is adopting a three-pronged approach to the development of the eco-town.
This will involve implementing effective urban planning designs that encourage residents to adopt greener lifestyles, using green technologies and educating residents through grassroots events.
Speaking to a 500-strong audience yesterday at an HDB-hosted housing conference at Suntec City, chief executive Tay Kim Poh said the HDB viewed such investment as being in line with its goal of providing a higher quality of life for residents.

‘As the largest developer in Singapore, we have the responsibility to promote environmental sustainability,’ he said.

He added that in recent years the HDB had been driving a number of initiatives to combat climate change.
It is introducing solar systems at four precincts – Tampines, Bukit Panjang, Tanjong Pagar and Marine Parade – with a combined capacity of 600 kilowatt-peak that will be used to offset the energy consumption of the towns.

Mr Tay underlined the importance of constantly rejuvenating ageing towns, and said HDB intends to extend to all towns its Remaking Our Heartland urban rejuvenation programme for public housing estates.

Over the next 20 to 30 years, this massive programme will revitalise older towns and estates, he said.

Source, Straits Times 29 January 2010

LAST December, MP Lim Wee Kiak saw a notice pasted illegally on a wall in his Canberra ward of Sembawang GRC. It was written entirely in the Myanmar language.

Curious, he got it translated. The notice was from a real estate agent offering his services solely to Myanmar permanent residents (PRs) looking for flats here.

Dr Lim was disturbed as he saw this as a tell-tale sign that ethnic congregation of foreigners was beginning in HDB estates.

Such concerns are evidently shared by the Government.

The HDB disclosed on Wednesday that it was considering introducing a separate ethnic quota for PRs to prevent enclaves from forming in estates.

Earlier, Minister Mentor Lee Kuan Yew said at a dialogue that the Government did not want to see new citizens congregate and would disperse them across HDB estates.

Recognition of this as an issue was welcomed by seven MPs who were contacted yesterday about the situation in their wards, and for their views on how such a quota could be implemented.

The HDB has not provided details of what the changes might entail.

But several MPs did point out yesterday that it was through renting of flats in the same areas – and not necessarily buying flats – that PRs have also been able to congregate.

Latest available data showed that as of June last year, only 4.9 per cent of HDB flats were owned by PRs.

Hence, a quota imposed on home-buying by PRs might make little difference.

The Ethnic Integration Policy (EIP), introduced in 1989, aims to maintain a healthy racial mix in housing estates by stipulating maximum proportions for the key ethnic groups.

But MP Charles Chong, whose Punggol Central ward, like all new estates, has seen an influx of foreigners, said the EIP now is too porous for a new generation of PRs.

‘The Indian community is pretty diverse. Sri Lankan is classified as Indian; Bangladeshi, Pakistani, northern Hindi-speaking Indians are all classified as Indians (for purposes of the EIP).’

If there are no sub-divisions, there could arise an enclave, say of Bangladeshis, all staying in the same block or precinct, he pointed out.

The same goes for mainland Chinese, Taiwanese or Chinese-Indonesians, who are all classified under ‘Chinese’.

Dr Lim argued, however, that the important distinction to make is not within ethnic classifications, but between Singaporeans and PRs. He said there are some floors of HDB blocks in his ward where more than half the residents are foreign.

They are a mix of nationalities. So although there is no ‘ethnic’ enclave as such, there is a high concentration of foreigners ‘to the point where Singaporeans feel threatened and become a minority’.

When that happens, then it becomes an issue, he said.

Dr Lim suggested a quota limiting the proportion of PRs in each precinct or block to the proportion of PR homeowners nationwide – or about 5 per cent.

MP Ho Geok Choo – who recalled a visitor describing her Boon Lay ward as being so cosmopolitan that it felt like being overseas – said a quota would help dampen excessive property prices. This would make it more difficult for PRs to artificially inflate prices in certain areas by all snapping up flats there, she said.

It would also assuage the concern of those Singaporeans who feel besieged in their neighbourhood by new sights and smells. On her house visits, every block throws up at least two or three Singaporeans who voice their concerns about this, she said.

But ultimately, a quota on home-buying may not make much of a difference.

Jurong GRC MP Halimah Yacob said more than 70 per cent of foreigners in her Bukit Batok East ward are renting. They rent in the area as it is close to their workplaces in the West.

While it is possible to envision an ethnic enclave of renters, ‘there’s nothing you can do (about where PRs rent)’, she said. The rental market is left entirely to free market forces.

Regardless, director of Dennis Wee Properties, Mr Chris Koh, foresees a big plus if a new quota is implemented: It would puncture the belief that some Singaporeans have that their flats can fetch a higher price if they sell them to PRs.

Sellers who hear that a certain nationality is prominent in the neighbourhood pressure agents to find such buyers, thinking it will mean more profits, he said.

‘If quotas are set… we can tell them, ‘We hit the quota max already and we have to be realistic about the price.”

Source, Straits Times 29 January 2010

The Housing and Development Board (HDB) is reviewing its rules to curb speculation and illegal subletting in the public housing market.

National Development Minister Mah Bow Tan said the move is to ensure prices are not being artificially inflated.

The review comes amid fresh concerns over the affordability of public housing sparked off by HDB’s latest data that showed resale flat prices continued to climb in the fourth quarter of last year.

In addition, the median cash premium that home owners have to pay upfront doubled to S$24,000, prompting calls for the government to step in.

But Mr Mah noted that the resale market should be allowed to operate as a free market, with prices set on a “willing buyer, willing seller” basis.

He said: “Now, if you are a buyer, you feel anxious because you want prices to be low. But if you are a seller, you want prices to be high. So it’s not possible for the government to set the resale prices.

“If you were to interfere in the COV (Cash-Over-Valuation), or the resale flat market, essentially, you are saying the government should set the resale flat prices which I think both parties will be unhappy. Why? Because the buyer may be happy today, but today if he’s a buyer, tomorrow he would be a seller. Then when we set the prices and he wants to sell, he will be unhappy.”

While promoting a free market, Mr Mah drew the line at speculation and stressed that HDB flats are for “owner-occupation, not speculation or rental investment.”

As such, Mr Mah said the housing board is relooking rules to ensure that prices are not being artificially inflated.

“If somebody is coming in and buying because they hope to make money, through flipping or selling the flats later on, or to buy to rent without staying in there, I think that’s not possible. That’s not the idea of HDB flats,” he said.

Mr Mah declined to say which rules are being studied. But he noted that the review will be completed in a few months’ time.

How much impact will the review have? Housing analysts said speculators are not the main problem, because prices are not rising fast enough to lure them in.

ERA’s Asia-Pacific associate director Eugene Lim noted that for speculators to be lured into the market, prices have to be moving up very fast. But that’s not happening in the public housing market. For example, prices of HDB flats only increased by 8.2 percent in the past year.

He added that the mandatory holding period before you can sell your flat – one year if you’ve taken a bank loan; 2.5 years for those who borrowed from HDB – also acts as a deterrent against flipping.

Mr Lim said: “It’s basically a case of demand more than supply, because there are probably more people with immediate housing needs now, who cannot wait for the three years for new flats to be built. There is also an increasing population of PRs. They’re not allowed to buy from HDB direct, so they have to go to the resale market.”

But Mr Lim noted that while business from PRs now accounts for 25 percent of his firm’s business, up from 20 percent previously, that is still considered small. He added the review of rules is a sign that HDB is “leaving no stone unturned”.

But demand is being pushed up partly by those who buy flats to earn rent.

Mr Lim said: “If an investment gives you 7 to 8 percent (returns), it is certainly very attractive to look at. Because it’s quite easy to rent out HDB flat. It doesn’t cost much – with $300,000 or $400,000 you can get a HDB flat, you can get good returns, it does attract a fair number of people to look at this option.”

Latest HDB figures showed that between January 2008 and December last year, 56 homeowners were caught renting out their flats illegally.

And recent reports suggested that some flat owners at the newly completed Pinnacle@Duxton had rented out their entire units without a minimum occupation period. This is illegal under HDB’s housing rules.

Home buyers who received a grant from HDB must stay in their flat for a minimum of five years before they can sublet their entire unit. For those who do not use a grant, there’s a minimum occupation period of three years.

Offenders face a fine of between S$1,000 and S$21,000 and may even have their flats repossessed.

Mr Mah said: “I’ve asked HDB to also step up on any possible breaking of the rules. I don’t know if it’s extensive but anecdotally you do hear one or two cases. So we want to make sure that this is not happening.”

But observers said many of these transactions are done under the table. So even if rules are tightened, enforcement will be difficult.

However industry players like Chris Koh of Dennis Wee Realty noted that new rules requiring homeowners to report the details of their tenants are an incentive for them to be honest.

But he felt that there is scope to increase the penalties further, and to penalise agents who facilitate illegal transactions.

And to help curb demand, analysts suggested tweaking rules on how flats are financed.

Currently, a buyer can take out a loan to pay for up to 90 percent of the purchase price of a new or resale flat.

Analysts suggested HDB lower that quantum and make buyers fork out a larger down-payment. This could force them to reassess just how much they can afford, thereby serving as a check on escalating prices.

Source: Channel News Asia, 28 Jan 2010

The opening of the second phase of the Circle Line MRT in April is definitely something to look forward to for residents living nearby. But those looking to sell or rent their homes are set to benefit as well.

Property agents said the opening of the 11 new stations along the Circle Line is likely to push property prices up.

Agents MediaCorp spoke to estimate home prices will increase by 10 per cent while office rents will go up by 20 per cent.

They said estates like Serangoon, Bishan and Paya Lebar have a lot of market potential while units in industrial estates are also expected to be in high demand.

Eddy Ng, division director, ERA Real Estate, said: “Most of the workers are taking public transport, it can be very accessible for them, if there’s an MRT line that leads them back home after work.”

Source: Channel News Asia, 28 Jan 2010

The Ministry of Law is proposing that law firms set up a new type of bank account – a conveyancing account – for lawyers to hold funds entrusted to them by homebuyers and sellers.

The pilot trial of the new scheme could take place as soon as April this year, with the entire scheme taking off as early as next year, BT understands.

These conveyancing accounts will have a host of security measures in place to make sure that lawyers cannot abscond with clients’ money, such as requiring signatures from both the buyer’s and the seller’s lawyers before any money can be moved.

‘A home is often a person’s most substantial asset. The money intended for its purchase and arising from its sale should be properly protected,’ the Law Ministry said in a statement yesterday.

The proposed changes follow the infamous case involving lawyer David Rasif, who ran off with some $10 million of his clients’ money in 2006, as well as other recent cases in which lawyers absconded with their clients’ conveyancing money.

Conveyancing money, which is used for housing transactions, includes stamp duty payment and option deposits. A seller receives an option deposit – typically 4 or 9 per cent of the purchase price, which a buyer pays – once the option to purchase is exercised.

The law currently does not prohibit lawyers from holding clients’ conveyancing money.

In a public consultation paper released in August 2009, the Ministry of Law suggested prohibiting lawyers from holding any conveyancing money. The Singapore Academy of Law (SAL) will be the main entity appointed to hold conveyancing money, the paper said then.

But after public feedback – which included suggestions to allow banks to hold conveyancing money – the ministry has made revisions to the proposed measures. A second public consultation paper was released today.

Under the newest set of measures, approved banks will be permitted to open conveyancing accounts for law firms. But, as an alternative, buyers and sellers may still choose to use the service provided by SAL to hold option deposits in private property or HDB industrial/commercial property transactions.

The Law Ministry also said that a central signature repository will be established to allow the approved banks and SAL to check the signatures.

A pilot trial of the proposed measures will be conducted soon. BT understands that about 30 law firms and the three local banks – DBS Bank, United Overseas Bank (UOB) and OCBC Bank – will be involved in the pilot, which could take place in April and May this year. The new measures could be implemented in early 2011, sources said.

Lawyers welcome the new proposed measures, though they add that it will mean more time for administrative procedures, such as getting the counter signatures.

They also highlight some concerns. For one thing, they say the cost to customers could increase if banks charge a fee for the conveyancing accounts. For another, the interest earned from these accounts will be kept by the banks, as opposed to the current practice where interest earned from law firms’ client accounts is returned to the clients.

Source: Business Times, 18 Jan 2010

Westerners choose units in $1.5-5m band; most Asians prefer $500,000-1m

Among the top foreign buyers of private homes last year, Asians (excluding Indonesians) primarily bought units in the $500,000 to $1 million range, while most Western buyers (Australians, UK and US citizens) picked up homes mostly in the $1.5-5 million range.

Indonesians were in the same category as the Western buyers, with the $1.5-5 million range being their most favoured price band. In fact, 47 per cent of the 1,219 caveats for private homes lodged by Indonesians last year were in this band, shows Jones Lang LaSalle’s analysis of URA Realis caveats.

On the other hand, Malaysians, mainland Chinese, Indians, Koreans and Burmese were more likely to have bought a private home last year in the $500,000 to $1 million category.

DTZ executive director (consulting) Ong Choon Fah argues that Indonesians tend to buy a property here as a home away from home, often as a residence for their children studying here, and as a safe haven to park their wealth in a nearby country. Hence they are prepared to invest more for a property in Singapore.

Generally, though, Asians may set aside smaller budgets for their property investments in Singapore because they also compare property prices here relative to their home markets, Mrs Ong suggests.

JLL’s South-east Asia research head Chua Yang Liang observes that while there is no noticeable difference in the location (district) preference between Asian and Western foreign buyers, there is a more prominent difference in terms of their price range. He suggests that this could be because the majority of Western foreign buyers are probably here on expatriate terms, while Asian buyers are likely to be working here under local terms or are just investors.

Mrs Ong suggests that Asians may be more ‘adventurous’ and prepared to shop for a property in Singapore’s suburban locations, where deals below $1 million can still be found, whereas Western buyers may be more comfortable sticking to their traditional investment locations such as Districts 9 and 10 where expats have traditionally lived and property is pricier.

However, property market watchers point to a stronger presence by mainland Chinese in the higher-end property market in Singapore. JLL’s analysis shows that they picked up 22 properties exceeding $5 million apiece last year. Most of their purchases in this price band were in Districts 10 and 4. District 4 includes Sentosa Cove, while District 10 is one of Singapore’s traditional prime districts covering such locations as Ardmore Park, Cuscaden Road and the Nassim area.

Some 41 Indonesians, 28 Malaysians, 18 British Virgin Islanders and 16 UK citizens each bought properties costing over $5 million apiece in Singapore last year.

JLL’s caveats analysis showed that foreigners’ share of private home purchases increased to 27 per cent in Q4 last year, from a low of 15 per cent in Q1 2009, when the property market was still eschewed by foreign investors who had gone into hibernation in the aftermath of the global financial crisis. Foreigners lodged 20 and 23 per cent of caveats in Q2 and Q3 last year.

Their relatively low share in the first two quarters of last year dragged down their full-year share to 21.8 per cent from 24.1 per cent in 2008. However, in absolute numbers, the number of private residences bought by foreigners doubled from 3,176 in 2008 to 6,472 last year, amid the spectacular overall recovery in private home sales following price cuts by developers in the earlier part of last year. As well, investors soon developed a preference towards investing in property as an asset class after the global financial slump when billions vaporised overnight in investments in financial instruments.

Dr Chua forecasts that foreigners will continue to be active in the local property scene this year as the regional economies improve.

Source: Business Times, 21 Jan 2010