Property
Private Home: Sliding Demand By PRs And Foreigners
By Property Buyer  •  July 28, 2013
A recent report, based on caveats lodged with URA, by DTZ shows that the number of foreigners and Singapore permanent residents (PRs) buying private housing has declined for two straight quarters since Q4 2012.  

Table 1: Private Homes (exclude ECs) Sold by Residential Status

Singaporeans

Q-o-Q Change (%)

Singapore Permanent Residents (PR)

Q-o-Q Change (%)

Foreigners

Q-o-Q Change (%)

Companies

Q-o-Q Change (%)

Total

Q2'13

4,954

14.6%

872

-12.9%

480

-17.5%

83

107.5%

6,381

Q1'13

4,322

-35.1%

1,001

-31.6%

582

-5.1%

40

-66.9%

5,945

Q4'12

6,656

1,464

613

121

8,854

Source: URA   Table 1 shows the figures for each group. Specifically all four groups - Singaporeans, PRs, foreigners and companies – registered a fall in the number of purchases quarter-on-quarter (q-o-q) in Q1 2013. Conversely the q-o-q numbers for Singaporeans and companies shot up for Q2 2013; this was despite the comprehensive 7th round of cooling measures imposed on 12 January 2013. A likely explanation is that for that round the restrictions were more targeted towards foreigners and PRs, as well as Singaporeans who are buying their second or subsequent homes . For instance the ABSD (Additional Buyer’s Stamp Duty) and the loan-to-value (LTV) ratio were only tightened for Singaporeans buying more than one home. And even then some locals found ways to circumvent these measures by using family members' names in their property purchases. In contrast, in the 6th round of cooling measures (on 6 October 2012) the tightening of the LTV ratio was applied across the board affecting even first time buyers of HDB flats and private homes alike. This is probably the reason why the 4Q2012 numbers dipped from the previous quarter, across all four groups. Meanwhile the waning demand by PRs and foreigners in the latest quarter (2Q'13) likely stem from the more targeted measures against these two groups in the 7th cooling round. For instance, ABSD was upped from 10% to 15% for foreigners and for the first time PRs has to pay an ABSD (5%) on their first home. The ABSD for PRs buying their second or subsequent home was also raised from 3% to 10%. Furthermore, as Ms Lee Lay Keng, head of Singapore research at DTZ, pointed out after the 7th round some developers were dangling discounts to offset the hike in ABSD. The result was a blip in demand. “The q-o-q fall in foreign purchases in the primary market in Q2 was amplified by a high base in Q1 when foreign buyers acquired 87 units in D'Leedon as its developer was giving discounts to entice buyers,” said Ms Lee Lay Keng, head of Singapore research at DTZ. Ms Lee also noted that the number of private housing PRs bought from developers rose by 4.2% in 2Q2013 over 1Q; whereas the figure for the secondary market dropped by 30.3%. A result, Ms Lee, attributed to a new January rule that bars PRs from owning a private home and HDB flat concurrently. A PR who owns a HDB flat will have to dispose of it within six months after buying a private home. However, this time-frame is extended for private homes that are still being built; explaining why (according to Ms Lee) more PRs are drawn towards developers' sales whereby homes are launched for sale before completion. Equally interesting is the fact that private home purchases by companies (non-individuals) jumped in 2Q2013 to reach 83 - a huge increase of 107.5% from the 40 in 1Q. This was notwithstanding the lower LTV ratio of 20% (from 40% previously) which came into effect on 12 January 2013. Based on caveats lodged with URA, we present here, by price range for the four groups, the private home purchases from 1Q2012 to 2Q2013.  

Table 2: Private Home (exclude ECs) Purchases By Singaporeans

less than $500000

> $500000 to $1 mil

> $1 mil to $1.5 mil

> $1.5 mil to $2 mil

> $2 mil to $3 mil

> $3 mil to $4 mil

> $4 mil to $5 mil

more than $5 mil

Total

Q2'13

11

1,868

1,693

621

432

183

58

88

4,954

0.2%

37.7%

34.2%

12.5%

8.7%

3.7%

1.2%

1.8%

100.0%

Q1'13

3

1,295

1,434

732

553

143

69

93

4,322

0.1%

30.0%

33.2%

16.9%

12.8%

3.3%

1.6%

2.2%

100.0%

Q4'12

7

2,186

2,369

956

651

231

111

145

6,656

0.1%

32.8%

35.6%

14.4%

9.8%

3.5%

1.7%

2.2%

100.0%

Q3'12

28

2,053

2,176

864

709

240

86

134

6,290

0.4%

32.6%

34.6%

13.7%

11.3%

3.8%

1.4%

2.1%

100.0%

Q2'12

140

3,232

2,423

946

712

268

85

121

7,927

1.8%

40.8%

30.6%

11.9%

9.0%

3.4%

1.1%

1.5%

100.0%

Q1'12

322

2,683

1,588

487

327

114

40

66

5,627

5.7%

47.7%

28.2%

8.7%

5.8%

2.0%

0.7%

1.2%

100.0%

Source: URA

Table 3: Private Home (exclude ECs) Purchases By PRs

less than $500000

> $500000 to $1 mil

> $1 mil to $1.5 mil

> $1.5 mil to $2 mil

> $2 mil to $3 mil

> $3 mil to $4 mil

> $4 mil to $5 mil

more than $5 mil

Total

Q2'13

5

379

235

86

83

43

16

25

872

0.6%

43.5%

26.9%

9.9%

9.5%

4.9%

1.8%

2.9%

100.0%

Q1'13

1

374

311

129

109

36

12

29

1,001

0.1%

37.4%

31.1%

12.9%

10.9%

3.6%

1.2%

2.9%

100.0%

Q4'12

2

563

455

178

117

55

33

61

1,464

0.1%

38.5%

31.1%

12.2%

8.0%

3.8%

2.3%

4.2%

100.0%

Q3'12

9

573

432

169

109

50

13

34

1,389

0.6%

41.3%

31.1%

12.2%

7.8%

3.6%

0.9%

2.4%

100.0%

Q2'12

32

671

407

150

125

45

19

36

1,485

2.2%

45.2%

27.4%

10.1%

8.4%

3.0%

1.3%

2.4%

100.0%

Q1'12

116

490

291

90

54

14

7

19

1,081

10.7%

45.3%

26.9%

8.3%

5.0%

1.3%

0.6%

1.8%

100.0%

Source: URA

Table 4: Private Home (exclude ECs) Purchases By Foreigners

less than $500000

> $500000 to $1 mil

> $1 mil to $1.5 mil

> $1.5 mil to $2 mil

> $2 mil to $3 mil

> $3 mil to $4 mil

> $4 mil to $5 mil

more than $5 mil

Total

Q2'13

0

137

157

62

68

25

8

23

480

0.0%

28.5%

32.7%

12.9%

14.2%

5.2%

1.7%

4.8%

100.0%

Q1'13

0

146

146

124

94

27

15

30

582

0.0%

25.1%

25.1%

21.3%

16.2%

4.6%

2.6%

5.2%

100.0%

Q4'12

1

147

188

97

81

44

25

30

613

0.2%

24.0%

30.7%

15.8%

13.2%

7.2%

4.1%

4.9%

100.0%

Q3'12

0

161

159

89

66

28

18

26

547

0.0%

29.4%

29.1%

16.3%

12.1%

5.1%

3.3%

4.8%

100.0%

Q2'12

5

166

187

127

85

37

27

35

669

0.7%

24.8%

28.0%

19.0%

12.7%

5.5%

4.0%

5.2%

100.0%

Q1'12

7

110

126

49

37

21

14

15

379

1.8%

29.0%

33.2%

12.9%

9.8%

5.5%

3.7%

4.0%

100.0%

Source: URA

Table 5: Private Home (exclude ECs) Purchases By Companies

less than $500000

> $500000 to $1 mil

> $1 mil to $1.5 mil

> $1.5 mil to $2 mil

> $2 mil to $3 mil

> $3 mil to $4 mil

> $4 mil to $5 mil

more than $5 mil

Total

Q2'13

0

4

7

10

15

14

9

24

83

0.0%

4.8%

8.4%

12.0%

18.1%

16.9%

10.8%

28.9%

100.0%

Q1'13

1

2

4

6

8

5

2

12

40

2.5%

5.0%

10.0%

15.0%

20.0%

12.5%

5.0%

30.0%

100.0%

Q4'12

1

10

16

25

16

7

10

36

121

0.8%

8.3%

13.2%

20.7%

13.2%

5.8%

8.3%

29.8%

100.0%

Q3'12

0

2

21

10

46

10

7

22

118

0.0%

1.7%

17.8%

8.5%

39.0%

8.5%

5.9%

18.6%

100.0%

Q2'12

0

3

4

14

10

5

4

23

63

0.0%

4.8%

6.3%

22.2%

15.9%

7.9%

6.3%

36.5%

100.0%

Q1'12

0

3

10

20

13

6

0

9

61

0.0%

4.9%

16.4%

32.8%

21.3%

9.8%

0.0%

14.8%

100.0%

Source: URA As can be seen from Table 2 to 5, Singaporeans most prefer housing in the price range of $500,000 to $1.5 million. Foreigners show a similar preference with a leaning towards the $1 million to $1.5 million range. On the other hand, PRs prefer homes costing between $500,000 to $1 million. For all the six quarters the buyer proportion for this price range is always the highest. Companies, however, tend to go for homes that exceed $5 million. Copyright ® - All articles are the copyright of www.propertybuyer.com.sg and CoreConcept Systems Pte Ltd and the company reserves full rights to use, reuse in any form or in any media with or without attributing authors or supplanting the name of one author with another.
About Property Buyer http://www.PropertyBuyer.com.sg/mortgage We are a research-focused Singapore mortgage consultancy which helps you compare Singapore home loans either for new loans or refinancing. We use loan reports from Singapore's best loan analysis system (exclusive to us) at http://www.icompareloan.com/consultant/ to serve our customers. Our services are completely FREE to you as the banks pay us a referral fee upon loan disbursement.
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