Chinese have been the largest foreign buyer group in Singapore since 2016 and made up 6.9 per cent of foreign purchases of private apartments last year, the highest proportion since before the pandemic.
Real estate professional Kiwi Lim from Huttons Asia believe the Singapore property market may see a phenomenal increase in interest towards Singapore's city fringe and luxury property projects powered by the surging demand from Chinese buyers as the world’s second-largest economy reopens.
After Beijing announced the end of three years of strict Covid measures akin to global isolation, enquiries for Singapore's properties have spiked and we may start seeing waves of Chinese buyers from mainland China and Hong Kong gradually visiting Singapore from next month onwards.
Singapore's location in Southeast Asia makes it an attractive hub for business and investment opportunities, particularly for Chinese individuals and companies looking to expand their reach in the region. The city-state also offers world-class healthcare, education, and other essential services, making it a popular destination for wealthy Chinese individuals and families seeking a better quality of life. The COVID-19 pandemic may have also played a role in this trend, with many wealthy individuals seeking a safe haven during the global crisis.
Singapore's migration consultants say inquiries from Chinese nationals in China and Hong Kong jump 600 per cent following the reopening announcement. Queries about Singapore residency were the fourth highest in 2022, after Portugal and Greece residency and Grenada citizenship, according to industry insiders.
"These Chinese buyers may seem to be undeterred by the additional 30 per cent tax that Singapore imposed on foreign buyers buying Singapore properties. Over the last two weeks during CNY holiday period, several units at Klimt Cairnhill and 3 Orchard By-The-Park were said to be sold to China buyers." say Kiwi Lim.
In the face of a looming global recession, a fresh round of cooling measures, a high-interest-rate environment and lack of launches, private home prices in Singapore inched up 0.4 per cent in the fourth quarter of 2022. This was slightly higher than the 0.2 per cent flash estimate by the Urban Redevelopment Authority (URA) earlier this month, and follows an increase of 3.8 per cent in the previous quarter. It also represents the lowest quarter-on-quarter rise in over two years, since prices grew a marginal 0.3 per cent in the second quarter of 2020. In 2022, prices of private homes went up 8.6 per cent, compared to the 10.6 per cent rise in 2021.
Condominium resale transactions continued to fall for the third straight month in December 2022, as a seasonal lull and the year-end holidays resulted in fewer home viewings. The number of condominium units resold dropped 14 per cent to 661 units, from 769 in November, according to flash figures from a property portal. Cooling measures and a mismatch in price expectations between buyers and sellers could have also weighed on demand.
Meanwhile, resale prices continued to rise on month, increasing 0.8 per cent, with OCR seeing the highest gain at 1 per cent, followed by 0.2 per cent and 0.6 per cent for the CCR and RCR respectively.
Deputy Prime Minister Heng Swee Keat said on 27 Jan 2023 that the government will continue to monitor the pace of property price increases in Singapore and believe it may take some time before the full impact of the recent property cooling measures will kick in.
“We must guard against a sustained increase in prices that is not backed by income and other fundamentals. Left unchecked, this could impair affordability and lead to a destabilising correction later on,” said DPM Heng, who was speaking at the spring festival celebration of the Real Estate Developers’ Association of Singapore (Redas) on 27 Jan.
Latest official data released showed private residential prices were up by 8.6 per cent in 2022, slowing slightly from the 10.6 per cent rise in 2021. The increase in resale prices of Housing and Development Board (HDB) flats similarly flattened, rising 10.4 per cent in 2022, compared to 12.7 per cent in the year before.
Experts expect higher construction costs and current low unsold supply of new launch condo projects to see private residential property prices this year rising around 5 per cent in 2023.