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    Apr 24, 2014

    Foreign share of home buys creeping up

    PRIVATE home purchases fell across the board in the first three months of this year to just over 2,000 units - the first time in more than five years that the number has dropped below 3,000 homes.

    However, foreigners' share of transactions edged up because of a sharper pullback by Singaporean buyers.

    In all, 2,076 private homes were transacted in Q1, nearly half the 4,312 units in the previous quarter and one third the Q1 2013 volume of 6,175 homes.

    Singaporeans' share - at 70 per cent - is at its lowest since the introduction of the additional buyer's stamp duty (ABSD) in Q4 2011. In absolute terms, purchases by permanent residents (PRs) and foreign buyers were also at their lowest levels since the Q1 2009 market trough during the global financial crisis.

    Based on DTZ's caveats analysis of URA Realis data as at April 15, Singaporean buyers accounted for 70 per cent of the 2,076 private homes that changed hands in Q1 this year, down from the 73 per cent share in both Q4 and Q1 last year.

    PRs saw their share increase to a record 19 per cent - the highest level since Q1 1995, the earliest date that the URA Realis caveats database goes back to - from 16 per cent in Q4 2013 and 17 per cent in Q1 2013.

    Market watchers linked the rise to the rule change in late-August 2013 requiring new PRs to wait three years before they can buy an HDB resale flat, prompting those who needed immediate accommodation to turn to the private housing market.

    Foreigners' share too has been creeping back up, touching 10 per cent in the first quarter. Although this is still low compared to the pre-ABSD proportion of 19 per cent, this was higher than the 9 per cent in Q4 2013.

    DTZ South-east Asia chief operating officer Ong Choon Fah said that given the high home ownership rate among Singaporeans, "there is no real push factor for them to buy right now".

    Lee Lay Keng, DTZ's regional head (SEA) research, noted that the combination of the ABSD measures and last June's total debt servicing ratio framework had led to a sharper pullback in buying activity by Singaporeans in the first quarter, amid expectations that prices could fall further.

    Ms Lee said while the 42 and 47 per cent quarter-on-quarter declines in Q1 purchases by PRs and foreigners respectively were smaller than the 54 per cent slide in Singaporean purchases, the 401 units and 203 units that PRs and foreigners acquired here in January-March were at their lowest levels since Q1 2009. In that quarter, the figures were 325 and 175 units respectively.

    The 1,453 private homes that Singaporeans bought in Q1 this year was the lowest since the 1,402 units in Q4 2008.