Huttons Asia: Singapore residential market to see gradual increase of Chinese buyers in 2023

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As of Jan 8, the Chinese government officially removed its strict international travel requirements and pandemic-related quarantine rules, resulting in a buzz of activity in the local property market as investors look to Singapore for reinvestment opportunities.

However, according to a report by real estate agency Huttons Asia, the rebound in Chinese-based property investors may be more gradual than initially anticipated. Hotels and travel agencies have reported an influx of inquiries from Chinese travellers, looking to take advantage of the reopening of borders and the upcoming Lunar New Year festivities, which will begin on Jan 22.

These travelers have likely been drawn by Tengah EC popular destinations in the Asian Pacific region, including Thailand, South Korea, Singapore, Malaysia and Australia.

Yet, the global economic climate and accompanying hikes in interest rates could affect foreign buyer sentiment, as evidenced by Singapore’s 6.7% y-o-y headline inflation and an 8.4% y-o-y rise in property prices in 2022. The Singapore Overnight Rate Average was 3.0019% as of Jan 9.

The 30% Additional Buyer’s Stamp Duty (ABSD) has also been noted as potentially curbing overall foreign buying demand this year, creating a cautious sentiment among foreign buyers.

Transaction data compiled by Huttons reveals that Chinese buyers’ residential property purchases in Singapore dropped from 1,637 in 2011 to 618 in 2012, following the introduction of an ABSD of 10% on foreign buyers in December 2011. Subsequent property cooling measures have seen this rate increase to 15%, 20%, and most recently, 30% in 2021.

Despite this, some deep-pocketed buyers have still made considerable investments in prime residential properties. In June 2022, EdgeProp Singapore reported the purchase of twenty units at the new Canninghill Piers condominium at Clarke Quay, with the bulk deal totalling an average price of approximately $2,773 psf or beyond $85 million. The units, mostly three- and four-bedroom, came out of multiple stacks.

The top three projects favoured by foreign buyers for 2022 were Canninghill Piers (51 units sold), Riviere at Jiak Kim Street (49 units sold), and The Avenir at River Valley Close (42 units sold). Other popular projects included Perfect Ten at Bukit Timah Road, Irwell Hill Residences at Irwell Bank Road, One Pearl Bank at Pearl Bank Road and Pullman Residences Newton at Dunearn Road.

These investments demonstrate continued investor interest in Singapore, which has become a “haven” among foreign investors. Chinese corporations have shown a particular interest in setting up operations in the city-state.