Singapore Housing Market Preps for Return of PRC Buyers 

In a much-awaited move, China lifted COVID-driven travel restrictions on its citizens on Sunday, with property analysts in Singapore expecting the move to help prop up home sales in the city-state this year as mainlanders turn to the city’s safe haven status to park their wealth.

Purchases of condos by mainland citizens is likely to rise by up to 70 percent this year from 2022 levels, according to Tricia Song, head of research for Southeast Asia for CBRE.

“On the back of the slightly earlier-than-expected reopening of China’s borders, we believe that there should be a positive impact on the private housing market, particularly in the higher-end and luxury property market,” she said, noting how Chinese investors make up at least a third of the overall foreign home buying activity in Singapore.

Buyers from mainland China purchased around 1,314 new and secondhand private condominium units in the Lion City last year, accounting for 6.8 percent of overall home sales and ranking them tops among foreign homebuyers in 2022, according to data collated by OrangeTee & Tie Research & Analytics.

Christine Sun, the property agency’s senior vice president of research and analytics told Mingtiandi that enquiries from potential Chinese buyers have already risen based on the feedback from their agents, and she expects homes purchases by mainlanders to rise by 10 to 15 percent this year, following China’s full relaxation of COVID restrictions on Sunday.

Prices to Stay Stable

Despite the number of private homes (excluding hybrid public-private executive condos) sold to mainland Chinese buyers falling by nearly a quarter in 2022, compared to the 1,738 units sold in 2021, their share of Singapore’s overall home sales is closing in on pre-pandemic levels as overall transaction volumes have fallen.

With private non-landed 2022 sales in the Little Red Dot having fallen to 19,409 units from their 29,465 volume a year earlier, mainland buyers’s 6.8 percent share of the market last year represented an increase from their 5.7 percent share in 2020 and came close to matching the 6.9 percent registered before travel became restricted, according to data from OrangeTee & Tie.

Sun said many PRC citizens are relocating to Singapore for work, studies or to settle down, while some are applying for citizenship given the city-state’s business-friendly reputation and the ubiquity of Chinese culture and language in the city-state.

“They also like to buy properties in Singapore as the capital appreciation is attractive and rental income is attractive,” she said. “Although there are many mainland Chinese buyers, they are not likely to (push) prices up or down as their numbers are still considered small when compared to locals.”

After China, Malaysia was the second biggest source of foreign home buyers in Singapore last year, accounting for 811 new and resale condo purchases followed by India, whose nationals snapped up a total of 461 homes. Rounding out the top five buyers by nationality were the US and Indonesia with citizens of those countries purchasing 295 and 260 units respectively.

Prime Locations to Benefit

With mainland residents having purchased 283 of the 3,943 private, non-landed homes sold in Singapore’s urban core – called the core central region in official parlance –  they bought 7.2 percent of the homes in that sector, with buyers from the PRC expected to again make their biggest impact in the most expensive neighbourhoods.

“The anticipated return of Chinese buyers following China’s reopening – although the pandemic situation in the mainland is still evolving – is likely to bolster homebuying demand and prices of private residential properties in Singapore,” Siew Chuin Chia, JLL’s residential research head for Singapore, said in a separate note. “This augurs well for developments in the Core Central Region (CCR), which generally represents the prime high-end and luxury districts of the market.”

Separate data from CBRE showed that luxury condo purchases by non-resident mainlanders in the CCR, where most of the premium homes are concentrated, went down by 36 percent year on year to 100 units in 2022.

With Singapore’s luxury home market having slowed the past two years, Chia of JLL believes that mainland buyers will have a major role to play in the high-end home market in 2023 thanks to the Southeast Asian nation’s status as a safe haven for the region’s wealthy.

“Those from China are expected to remain active in Singapore and form the largest group of investors in 2023. Singapore has long been a magnet for those looking to invest in properties overseas… given its reputation as an efficient, safe and prosperous country,” she said.