Us Buyers Lead Foreign Demand Singapore Third Straight Year
In the first half of 2024, the Core Central Region (CCR) saw a total of 64 residential property purchases by foreigners, who are not permanent residents. This is a slight increase from the 21 transactions in the first quarter and 43 in the second quarter, according to data from PropNex Research. Out of these transactions, US buyers made up the majority at 56% (36 caveats) (see Tables 1 and 2).
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The number of home purchases by US citizens in the CCR has been on the rise since 2019. In 2022, they overtook Chinese buyers with a total of 130 transactions, compared to 114 units bought by the latter over the same period.
PropNex CEO Ismail Gafoor attributes the increase in US buyers to the favourable stamp duty treatment they receive under the free trade agreement (FTA) between Singapore and the USA. The same treatment is also extended to nationals and permanent residents of Iceland, Liechtenstein, Norway, and Switzerland under their respective FTAs with Singapore.
While the property market may remain subdued for the remainder of the year, Gafoor notes that the average transacted prices of non-landed private homes in the CCR have held steady even after the hike in additional buyer’s stamp duty (ABSD) in April 2023.
According to data from PropNex Research and URA Realis, the average price of a new sale of non-landed homes in the CCR in the second quarter of 2024 was $3,273 psf, higher than before the ABSD hike in April 2023 (see Table 3 “Average transacted unit prices”). Meanwhile, the average resale price of non-landed private homes in the CCR was $2,133 psf in the same period, a slight decrease from $2,172 psf in the second quarter of 2023.
However, Gafoor observes that there was a significant drop in new sales of non-landed homes in the CCR, which may be attributed to fewer launches in the segment following the implementation of property cooling measures.
Looking ahead, PropNex predicts that potential upcoming launches in the CCR in the second half of 2024 could include the 683-unit Marina View Residences, the 186-unit Aurea at the former Golden Mile Complex, and the 367-unit The Collective at One Sophia. In the Rest of Central Region, upcoming launches such as the 366-unit Union Square Residences are expected in the second half of 2024, adds Gafoor.