Foreigners Interest In Singapore Residential Market

With our housing property price recovery after four years of decline and a prospect of better rental market, Singapore residential market is deemed affordable compared to other global cities. The recent bullish demand in the residential property market has been by the domestic buyers. Analysts are now expecting foreign demand to return to the Singapore residential property market this year especially in the prime residential segment. The Singapore residential property sector has recently rebounded after the housing property prices fell 12% from the last peak in 2013. With the household income improved over this period, our housing affordability as measured by private home price/income fell to a 20-year low. Foreigner-demand Source : Business Times, 22 Jan 2018 In 2017 there were about 1,600 transactions vs the long-term average of 2,200 transactions done by foreign buyers per year. During the last bull market from 2010 to 2013, the average transacted volume by foreigners was 3,600 per year. Global cities such as Hong Kong, Tokyo, Sydney, London and San Francisco had seen home prices increased with decreasing housing affordability over the same period. Singapore residential property now offers attractive valuation for the foreign buyers. As housing projects usually take three to four years to build, the annual rate of completions will decline by about 40% from 2018 to 2020 due to fewer launches in the preceding years. This will bring the number to below the projected population growth. Thus it will assist the rental market to bottom out and drive a rebound in rentals going forward. The rental market will also see demand from recently displaced residents from collective-sale developments who intend to rent while looking for a new home in the near future. Most of the analysts expect Singapore private home prices to gain by 3-8% and the recovery in rentals by 5-10% in 2018. The top-end prime residential housing sector will attract foreigners’ interest again as it is dependent on foreign demand which has suffered the most from the cooling measures. The median psf for this sector is now at a 10 year low over the mass market housing sector. The New Futura released 25 units on its first day of exclusive private viewings on 18 Jan 2018, with two-thirds of the buyers being permanent residents and foreigners. Most of the units sold were the four-bedroom and three-bedroom units.