View of luxury apartments along Singapore’s coastline.
Singapore continues to attract mainland Chinese property investors with its greater affordability, world-class education system and lifestyle offerings. At the same time, more foreigners are now looking for investment opportunities in the world’s second largest economy.
Despite the tough cooling measures put in place to curb speculation and foreign demand, mainland Chinese buyers continue to have an insatiable appetite for Singapore residential property, revealed experts.
Analysis of pageviews between January to June 2016 on Juwai.com showed that China remains their most preferred location when searching for property at 82.8 percent, but Singapore is their top overseas destination at 9.4 percent, followed by the US and Hong Kong at 1.2 percent each.
Data from the Chinese international property portal also revealed that the number of enquiries for Singapore properties surged by almost 99 percent from Q4 2015 to Q1 2016, translating to a total enquiry value of US$692.6 million. Further information showed that the median enquiry price was about US$633,000.
Central location versus resort feel
Interestingly, most of the enquiries focused on the residential estate of Pasir Ris, which is known for its laid-back resort feel. This was followed by the mature towns of Serangoon and Toa Payoh, which are centrally located and close to numerous amenities such as shopping malls, established schools and major transport nodes.
Separately, a report published by Edmund Tie and Co. showed that most of the purchasing activity by mainland Chinese centred on District 22 (Boon Lay, Lakeside, Jurong) and District 5 (Clementi, Dover, Pasir Panjang, West Coast).
This could be due to future plans to develop infrastructure projects in the west, including a second Central Business District in the Jurong Lake District, the Kuala Lumpur-Singapore High Speed Rail terminus in Jurong East, and a 600ha innovation district in Jurong West.
What makes them buy?
Experts noted that there are three main reasons for why Chinese investors continue to park their money in Singapore. These include:
Education
Majority of the enquiries on Juwai.com (66.3 percent) were driven by the motivation to educate their children in the city-state. Singapore’s proximity to China, its world-class education system and cultural similarities makes it a popular destination for Chinese students.
Tourism
The number of mainland Chinese visitors to Singapore surged by 32 percent in 2016 from the previous year due to improved flight connectivity between Singapore and second-tier Chinese cities, noted JLL. The development of major new attractions in recent years, such as two integrated resorts (Marina Bay Sands and Resorts World Sentosa) and Gardens by the Bay, have also helped to boost Chinese tourist arrivals, Singapore’s second largest market.
Affordability
Luxury home prices in Singapore have fallen by around 20 percent in the last three years, bottoming out in 2016, according to JLL. However, prime residential prices in other global cities like London, New York and Hong Kong have continued to rise in the last five years. The property consultancy noted that prices in Hong Kong are 130 percent higher than Singapore, while prices in New York are now 62 percent higher.
Investing in China
While Singapore is seen as a safe haven for Chinese investors, a growing number of Singaporeans and other nationalities are looking to invest in China. According to David Ji, Head of Research and Consultancy for Greater China at Knight Frank, there are vast investment opportunities in the world’s second largest economy, which is still growing at a healthy pace.
He noted that China’s GDP target was lowered to 6.5 percent from seven percent by the central government, but this growth easily outpaces other major economies. “China is a developing country with huge growth potential in multiple industries, including manufacturing, natural resources and high-tech,” said Ji.
As such, most investors are snapping up commercial properties (office and retail spaces), but there is also demand for luxury residential projects. Ji noted that it is relatively easy for foreigners to purchase property in China as the process is similar to those for local buyers. Foreigners only need to provide proof of residency in China.
Joining forces to help home seekers
Meanwhile, PropertyGuru Group, Asia’s leading online property group, has joined forces with Juwai.com to help overseas investors find the right investment in China. This partnership will also provide options to Chinese investors looking for property in Southeast Asia, including Singapore.
Juwai sees about two million Chinese consumers from around the world visiting its website each month. Ranked as the number one real estate portal by Chinese internet ranking firm CNZZ, it has 2.5 million property listings from 89 countries displayed on its site and mobile app.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, wrote this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
