FOREIGN BUYERS RETURNING?

Singapore – Foreign demand is likely to flow back to the Singapore private housing property scene in this blockbuster year 2018 and beyond, Bank of Singapore (a Singapore-based private banking arm of OCBC) maintains. It is backed by the prospects of a recent price point recovery and better rental atmosphere in the local market, along with the fact that private housing premiums have fallen to an almost dessert spot after 4 whole years of declining. Therefore, our local marketplace appears to be of a more affordable prized asset in comparison to other metropolitan cities.

According to Mr Lee in a written statement on last Friday, that the current bull rage reflecting in the market has so far been largely driven by domestic purchasers. But savvy international investors will soon return and push the upside into higher gear, especially in our new residential development segment. Based on figures from URA, there have been no more than 1,600 deals by foreign friends in 2017, significantly lesser than the 2,200 on average each year, and the high average of 3,600 each year during the previous bullish market from 2010 to 2013.

Most of them were probably kept a distance by the additional buyer stamp duty for foreigners, only a mere 5.6% deals in 2017 were made by the foreign community. A drastic drop from the 8.7% in an 18-year average. The Singapore property market has since bottomed out after falling by 12% from the peak seen in 2013. Simultaneously, domestic income has improved together with an increase of positiveness in the overall market sentiment.

This is opposed to other major cities such as Hong Kong, London, San Francisco, Sydney and Tokyo, where asset affordability has appeared to worsen over the same period. Hence, Singapore real estate will be more appealing with the possible potential upsides.

Pertaining to the leasing environment, it will recover progressively from now due to a sharp drop of new project launches in recent years as they usually require 3 to 4 years to construct. Leasing rates began falling due to the oversupply since 2013 and exceeded the household formation, resulting in the increase of vacancy but due to the declining new projects seen in the past few years, the number of dwellings will go below the projected figures gauge by the state. Thus, vacancy rate will drop and a rebound in leasing will kick in.

Morgan Stanley, along with other analysts have suggested our local prices to rally by up to 10% this year while being lifted by a recovery in leasing market. It has already been seen in the existing en-bloc scene from 2017, with developers going all out in snapping lands before the price increases going forward.

Due to the onslaught by global environment and the government measures everywhere, demand and prices have fallen to the extent of only a 62% premium over mass market in the high-end residential segment, a 10-year low. It will begin to be the centre of attraction when foreign interest come flowing in the coming months ahead.

At the same time while writing, City Developments (CDL) have reportedly sold 18 luxurious units from New Futura, out of the 25 release units on its first day of private sale over the weekend, with less than a-third of them from local home buyers and most of the high-net-worth individual buyers came from the wealthy Chinese and Indonesians.

With such an increase on the foreign versus local buying ratio as seen, following up new condo developments in the same prime orchard vicinity such as 3 Cuscaden along Cuscaden walk will be in the spotlight. It is a very well positioned private residential projects situated diagonally across Wheelock Place and will certainly be of interest to a wide audience when it is release for sale in the next few months.

Apart from this development, there is another strong contender where they are almost completely built and ready for move-in condition. 8 Saint Thomas, they too are located within the same orchard neighbourhood, sitting along River Valley.

If you’ve been house hunting in the orchard area, these few condo developments will be the next up and coming beautiful sites to look out for.