If you’ve been reading our comparison articles, you might notice that we give you the breakdown of buyers for each project. You might also notice that besides Singaporeans and permanent residents, foreigners form a chunk of buyers of condominiums here.
Now if you’re wondering exactly who these foreigners are, it’s safe to conclude that the majority are Chinese citizens followed by Malaysians and Indian nationals.
According to data from Singapore-based real estate agency, OrangeTee & Tie, mainland Chinese bought 391 flats and condominiums in Singapore in Q2 2022. In the same period, Malaysians bought 218 units while Indian nationals bought 123.
Despite the pandemic, purchases by Chinese nationals were well over 400 for three quarters last year (Q2 – Q4 2021). In fact, it hit a record high of 467 in Q2 2021.
What attracts Chinese citizens to buy properties here?
There are several reasons why Chinese nationals are still buying Singapore properties despite the high buyer’s stamp duty (BSD) and additional buyer’s stamp duty (ABSD) that they are subjected to.
BSD applies to all properties (residential, commercial, industrial) and everyone pays the same BSD in accordance to the table below:
Note: Based on figures given after Budget 2018
ABSD applies to only residential properties and it is applicable to everyone, but at different percentages. Here are the latest ABSD rates effective 16 December 2021:
SPRs are subject to the above rates regardless if they own the properties by themselves or co-buy with others.
However if you’re a citizen and permanent resident of Iceland, Lichtenstein, Norway, Switzerland and the USA, you’re in luck. Thanks to certain free trade agreements signed by your governments and Singapore, you’re not considered a foreigner when it comes to buying properties here. For instance, the European Free Trade Association (EFTA) gives those from Europe similar property ownership privileges as Singaporeans.
Besides the BSD and ABSD, there are also legal fees, real estate agent’s commission and registration fees.
There are many reasons why Chinese nationals are attracted to properties here
So, why are foreigners, particularly Chinese citizens, still buying Singapore properties? Here are some reasons:
– Singapore is politically and economically stable
– Singapore is in a geographically safe zone, sheltered from natural disasters
– Mandarin is being widely spoken here
– Singapore has relatively low tax rates, making it attractive to do business here
– These Chinese homebuyers have children pursuing their studies here
– They are cash-rich and want to park their wealth where it is safe and has good potential for high growth
– They want to escape the severe Covid lockdowns back home
What have they been buying?
Many of these Chinese property buyers are very well to do and are simply looking for prime opportunities to park their wealth.
There are many Chinese HNWIs interested to park their funds in politically stable Singapore
As reported by Lianhe Zaobao on 2 June 2022, a Chinese national from Fujian bought 20 units at CanningHill Piers condominium for a cool $85 million. The 20 units include ten 3-bedders priced between $3.1 and $3.3 million, and ten 4-bedders priced between $5.3 and $5.6 million.
As if that’s not enough, it was reported that the wealthy buyer was eyeing another ten more units, which would bring his total transaction to cross the $100 million mark. If he had gone ahead to buy the additional ten units, he would have paid $30 million in stamp duties alone!
The breathtaking Canninghill Piers condo near River Valley Road and Clarke Quay
In the past year, buyers are spoilt for choice as Singapore has been building more luxury homes with total volume reaching 1.2 million flats with some priced as high as $3 million each.
Around 50% of these Chinese buyers buy for their own stay while the other half rent out their units or keep it as a holiday home.
In this article, we’ve explored the reasons why foreigners, in particular Chinese nationals, buy properties in Singapore. If you want to know more, schedule a visit with us or book a free consultation with our trusted and renowned representatives.
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