By Michelle Tan
SINGAPORE - Malaysians have emerged as the biggest foreign buyers of Singapore residential property, outpacing those from China.
According to data from the Urban Redevelopment Authority (URA) and CBRE Research, Malaysian buyers comprised 27.6 per cent of all foreigner purchases during the first half of 2012, compared to China's 20.3 per cent. This is a sharp contrast to the second half of 2011, when China occupied top spot with 29.6 per cent, and Malaysia had 18.7 per cent.
Said R'ST Research director Ong Kah Seng: "The resilience of Malaysian buyers is due to Singapore's proximity.
There are also many Malaysians who are permanent residents (PRs) in Singapore, and PRs are allowed to purchase at least one 'ABSD-free' private property."
Mr Ong also pointed out that Indonesian buyers (1H2012: 18.4 per cent) have been coming back strongly, following a slight lull in the first few months after the ABSD (additional buyer's stamp duty) was implemented.
Sharing some reasons for the revival in interest from Indonesian buyers, Mr Ong said: "Singapore is still a well-tested and well-positioned property hotbed for them, especially for those who have been on the sidelines during the prior prolonged sluggish central region home performance period.
With homes in the central region seemingly poised for sustained recovery, some people (especially those who are PRs) may decide to quickly purchase a unit.
Also, younger Indonesians who do not require posh or major-sized units to house their families see homes in Singapore as good avenues to be independent and yet remain close to their families."
All in all, it seems foreigners have started to accept the ABSD as a tax and are starting to hunt for properties in Singapore. And consultants are not the least bit surprised.
Lee Sze Teck, senior manager of DWG's research and consultancy arm, said: "After all, Singapore is still one of the best places in the region to invest in property because of its clarity in ownership of property, low-tax environment, absence of capital gains tax, low interest rate and stable government."
This article was first published in The Business Times.