Why are foreigners buying Singapore property Despite Cooling Measures?
Do you know that foreigners from China, Malaysia, USA, Indonesia and several others are buying Singapore Luxury properties? This is because Singapore is the third most attractive real estate markets, just behind London and Hong Kong according to Heitman LLC, one of the world’s top investment firm.
There is a reason why foreigners love buying properties in Singapore. It’s simple, it’s because the property market in Singapore is just that attractive. In fact, Singapore’s property market has long been regarded as a “safe haven” because of how lucrative and secure it is. Even during the COVID-19 pandemic, the property market scene in Singapore continued to grow stronger. Specifically, the private property price grew by almost 23% in the past 2 years.
Despite Singapore has several regulations and cooling measures put in place by the authorities, foreigners are still coming into Singapore. In fact, the housing market in Singapore is one of the most regulated compared to other major cities. If such cooling measures had not been implemented, Singapore would likely garner more interest and capital, and a more pronounced appreciation in private property prices. But the issue is, is the property market in Singapore still attractive despite these implemented cooling measures?
Our answer to that question is yes. Singapore will continue to be one of the most attractive cities for investors and businesses alike, even in the post-pandemic world. Consequently, the housing market in Singapore will continue to grow in the medium and long run due to the increase in demand. In fact, Singapore’s prime geographical location and long-term planning put Singapore at an advantage, especially with the current COVID-19 epidemic exacerbating geopolitical concerns. For instance, the US-China competition disrupted global supply lines and fuelled trade protectionism among nations that are primarily concerned with the short term.
The Rise of Singapore
The ever-evolving epidemic has re-defined risk attitudes, especially among individuals with extremely high net worth. What this means is affluent entrepreneurs, and worldwide talent will flock to Singapore. In fact, the ongoing promotion by the variable capital company (VCC) has also raised Singapore’s status to be a wealth and management powerhouse. As such, making Singapore become a default go-to city for global funds and many alike to establish themselves. Singapore is also a regional manufacturing powerhouse despite its modest size. Specifically, manufacturing accounts for over 20% of Singapore’s GDP, in contrast to other global financial centres, which are predominantly service-oriented.
Singapore’s attractiveness on a global stage does not just end there. On the global supply chain aspect, Singapore plays a key role in a wide range of products, from storage and memory to microelectromechanical systems. Specifically, Singapore produces four of the world’s top ten pharmaceutical drugs and is also the world’s seventh largest supplier of petrochemicals. In terms of biomedical activities and innovations, it is also expected to acquire significant impetus in Singapore from 2022. With such a wide range, it helps to diversify Singapore’s economical context and has even benefited Singapore during the COVID-19 epidemic.
Apart from being attractive on a global scale, Singapore also manages to distinguish itself from other countries. This is because of its distinctive services as worldwide wealth management and financial centre founded on low corruption rates, transparent public institutions, and strong political stability. As such, Singapore will continue to be an ideal site for investors and enterprises that are looking to capitalize on Asia’s massive development potential in the future decade.
Although the cooling measures in place may have caused Singapore a slower property market growth as compared to some other cities, it has stopped private house values from spiralling out of control. This is especially beneficial with the COVID-19 pandemic affecting the economy. As such, local and foreign property purchasers are likely to invest in properties in Singapore. This is even despite the increased additional buyer’s stamp duty (ABSD) rates, where we predict that luxury residences in Singapore will continue to attract strong interest from overseas investors. This is especially so with the recent declaration of easing border curbs. Consequentially, Singapore will attract some of the internationally mobile rich who are still willing to pay the 30% ABSD for admission into Singapore’s steady prime property market.
Taken together, property purchasers, both domestic and international, are likely to keep a keen eye on Singapore as a home investment destination.