Chinese purchasers will gradually expand in the Singapore residential market in 2023

In Singapore, the property market was abuzz after there was a buzz when the Chinese government announced that it would end its strict travel restrictions to international destinations and quarantine-related rules for pandemics starting January 8. It is expected for Chinese property purchasers will be returning to Singapore in large numbers to invest into real estate. But, a study by real estate agent Huttons Asia shows that the rise in Chinese property investors may be slower than originally expected.

Marina View Residences location is earmarked for residential and hotel use. The 0.78 ha or 84,000 sq ft site enjoys a maximum GFA of 1.09 million sqft.

After the reopening and opening of borders and the removal of restrictions on quarantines in China travel and tourism agencies have seen an increase in inquiries from Chinese travellers. International travel is expected to increase in the coming Lunar New Year festive period that officially begins on the 22nd of January. Some of the most sought-after destinations within Asia Pacific include Asia Pacific region for Chinese travelers are Thailand, South Korea, Singapore, Malaysia and Australia.

However, Huttons Asia says the economy is less favorable since the global interest rates continue to increase. Singapore’s headline inflation rate has risen by around 6.7% y-o-y as of November 2022. property prices have also risen in the range of 8.4% y-o-y for 2022 and the 3 month Sora price was 3.0019% as of Jan 9. Sora is the term used to describe Sora is Singapore Overnight Rate Average, the benchmark rate for interest rates.

The buying mood of foreign buyers, which includes those coming from China is expected to remain cautious due to economic uncertainty and an ABSD of “prohibitive” 30% ABSD that will likely limit global demand for foreign purchases this year, according to Huttons.

The data collected by the company indicates that Chinese buyers are making home property purchase in Singapore were at 1,637 in 2011. The number dropped by 62.2% y-o-y to 618 units sold in 2012 because the government imposed an additional buyer’s stamp tax (ABSD) that was 10% for international buyers, as part of property cooling measures that were introduced in December 2011 to reduce the demand from foreign buyers. The subsequent property cooling measures increased overseas purchasers’ ABSD by 15% in 2013 to 20% at the time of 2013 and increased to 20% in 2018. In 2021 the ABSD increased by 30%.

This stamp duty on transactions is not preventing some rich Chinese purchasers from investing in high-end Singapore housing properties. As of the month June 20, EdgeProp Singaporereported that an unknown Chinese buyer had purchased 20 units at the newly constructed luxurious apartment Canninghill Piers at Clarke Quay. The entire deal is worth over $85 million which is about $2,773 per sq ft and the units comprise mostly three- and four-bedroom units spread across several stacks.

In all, 227 new non-residential residential and the resale of properties within Singapore were bought in 2022 by Chinese customers in 2022. “Singapore is known for being a safest haven… that is popular with investors. There is a lot of interest from Chinese companies to establish business within Singapore,” says the Huttons report.

Based on a study of transaction records from Huttons the top three projects favored by foreign buyers 2022 include Canninghill Piers (51 units sold), Riviere at Jiak Kim Street (49 units sold) of transaction data by Huttons, the top three projects are Riviere at Jiak Kim the Avenir located at River Valley Close (42 units sold). The list also includes projects such as Perfect Ten at Bukit Timah Road Irwell Hill Residences located at Irwell Bank Road, One Pearl Bank at Pearl Bank Road and Pullman Residences Newton at Dunearn Road