Voice of Commonwealth

Singapore’s property market braces itself for a surge in Chinese demand.

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SINGAPORE (Commonwealth Union)_As the world’s second-largest economy reopens, Singapore’s housing market is prepared for a surge in demand from Chinese purchasers.

The city-real state’s estate agencies have noticed an uptick in queries from mainland Chinese, with industry observer OrangeTee & Tie reporting a 10% to 15% spike in January since Beijing stated it was ending three years of global isolation. The reopening of the border has also resulted in an increase in inquiries about migrating to Singapore.

“I’m definitely witnessing an increase in interest among Chinese friends interested in relocating to Singapore since the border opened,” said Lily Li, who acquired a 640 square foot (60 square metre) apartment for S$1.3 million ($989,000) including taxes at the end of last year.

“I’m getting a lot of calls inquiring about our experience, as well as people wanting to know how to rent and buy property.”

According to OrangeTee & Tie data, Chinese have been the largest foreign buyer group in Singapore since 2016 and accounted for 6.9% of foreign purchases of private residences last year, the greatest proportion since before the pandemic. According to Christine Sun, the agency’s senior vice president of research and analytics, the number of homes acquired by Chinese this year might climb by more than 10% due to rising supply.

However, such demand is unlikely to fuel price increases in the city-state because the number of Chinese buyers remains tiny in comparison to locals. In the fourth quarter of 2022, home prices rose at the slowest rate in more than two years, bringing the annual rise to 8.6%.

China’s openness is also generating increased migration interest, with the city-state ranking among the top destinations for wealthy Chinese. Following the reopening announcement, investment migration consultant Henley & Partners saw a 600% increase in migration requests from Chinese nationals in China and Hong Kong, compared to three weeks prior. According to the business, Singapore residency inquiries were the fourth most in 2022, trailing only Portugal and Greece residence and Grenada citizenship.

According to Ismail Gafoor, CEO of Singapore-based agency PropNex, Singapore’s “safety and security, stable political environment, pro-business policies, and solid infrastructure” are appealing to worldwide investors. In both the commercial and residential markets, Chinese led international enquiries, with many prospective purchasers being “high net worth or ultra-high net worth individuals,” he added.

According to ERA Research and Consultancy, the “allure of Singapore as a safe haven, as well as their predilection for real estate as a store of wealth,” more Chinese are relocating to the city-state to work, reside, and invest, despite the additional 30% tax international buyers must pay on property.

However, the relative high prices in Singapore are leading some prospective Chinese purchasers to halt and reconsider.

“I can buy two properties overseas for the price of one in Singapore,” said Jeremy Zhang, 57, who owns an electronics company in Shenzhen and is looking for a private apartment in a prime location near a train station. “Of course, I’m not going to make a decision without giving it careful thought.”

Chung Ting Fai, a lawyer who assists in the establishment of family offices, stated that in late 2022, he had one inquiry each week from people looking to relocate at least US$20 million (RM85 million) to Singapore. “I can buy two properties overseas for the price of one in Singapore,” said Jeremy Zhang, 57, who owns an electronics company in Shenzhen and is looking for a private apartment in a prime location near a train station. “Of course, it’s not something I’ll make hastily. Many are parents seeking permanent residency for their children, he added, noting that inquiries from Japanese and Malaysian potential clients, in addition to Chinese, had come in.

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