Thursday, February 23, 2012

Sharp fall in total private home sales in 2011

The media in Singapore is usually focused on the new property sales by developers to follow the property sales numbers in Singapore. But the real deal is the overall number of properties sold in a given time both by developers and owners in the market. According to a DTZ Research report total private home sales in Singapore in 2011 fell sharply by 18.6% compared to a year ago. The fall would be sharper if the number of private residential properties bought by foreigners did not rise 20.4 per cent to a record high last year!

If you are seeing less and less people in the little red dot buying private property but wondering how sales numbers are up, this report will enlighten you: Private residential properties purchased by Singaporeans in fact fell a sharp 24.3 per cent to 20,079 units. Singapore Permanent Residents did not do better and their purchases declined 15.7 per cent to 4,072 units. It is pretty obvious that private properties are becoming increasingly less affordable for Singapore residents both citizens and PRs.

Foreigner numbers increased to new highs, especially the mainland Chinese buyers who seem like on a crazy mission to create a world wide property bubble:

For the whole of last year, foreigners purchased 5,246 units, breaching the previous high of 4,982 units in 2007. They accounted for 17 per cent of the 30,133 private homes purchased, up from 12 per cent in 2010 and the highest proportion in the past 15 years.
Buyers from China, Malaysia, Indonesia and India continued to be dominant groups, accounting for 77 per cent of transactions among non-Singaporeans, up from 73 per cent in 2010. Mainland Chinese buyers alone accounted for 28 per cent of non-Singaporean purchases last year, up from 20 per cent in 2010, as their growing wealth and restrictions on purchases back home led to more purchases, DTZ said.

With the introduction of Additional Buyer's Stamp Duty in December 2011, it is now less attractive to buy private residential property in Singapore for investment purposes and it is expected that the percentage of foreign buyers as well as the total private home sales (new development + second hand) are expected to fall. Still, two strong pillars are still supporting the prices, the super low interest rates and super high private property rentals. As long as they are there, there will be positive or very little negative monthly cash-flow from the investment and owners will likely have power to hold on high asking prices.

This blog article is to provide general information only and should not be treated as an invitation to buy or sell any property or as sales material.  Users of this report should consider this report as a one of the many factors in making their investment decision. Users should make reference to other sources of information and specific investment advice to obtain a more objective view of the property market. Asia Singapore shall not be responsible for losses suffered.

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