Lunar New Year is the most important festival in the Chinese calendar, but instead of traditional reunion dinners, some families have another ritual: luxury apartment shopping in Singapore.
With the political unrest in Hong Kong showing no signs of stopping, Chinese buyers are zeroing in on Asia’s other major financial center, doubling sales of units at the top end of the market. Rich foreigners are largely undeterred by the higher taxes that are now levied on them.
Inquiries in the lead up to Lunar New Year typically jump at least 15 percent, three property agents canvassed by Bloomberg said. Demand has intensified over the past two years with most people wanting to buy units as an investment rather than a principal place to live.
“Wealthy mainland Chinese are seeking a way to safely diversify and guard a portion of their wealth in offshore assets,” said Georg Chmiel, executive chairman of China-based property portal Juwai.com (居外網).
Chinese nationals are set to top Singapore’s list of foreign buyers in seven out of the past 10 years, according to List Sotheby’s International Realty analysis of government data. In the early years of the last decade, they bought homes to resettle in the city-state, but since 2017, an increasing number are purchasing apartments solely to park their wealth and are not keen on renting them out either, agents say.
Earlier this month, Clarence Foo (符策銘), a Singapore-based realtor at APAC Realty Ltd unit ERA, sold one property to such a buyer. The Chinese couple in their 50s run their own financial business and were in town for three days to apartment hunt.
After viewing four units in the central business district, they settled on a S$3 million (US$2.2 million) three bedder at the upscale Marina One Residences, a 10-minute walk from the iconic Marina Bay Sands casino, hotel and entertainment complex.
“They just wanted a place close to the hotel because they believe property prices will appreciate quickly since it’s near a landmark location and that area is slated for further redevelopment,” Foo said.
Hong Kong used to be a favored destination due to its proximity to mainland China and fewer market restrictions, but the protests have prompted many to turn to Singapore as an alternative investment haven, drawn by its economic and political stability.
“Whereas a year ago they were enthusiastic, mainland buyers today are cautious or downright skeptical,” Chmiel said. “Either they’re postponing their purchase in Hong Kong or deciding against it altogether.”
The Chinese couple, who own four other properties in China and Canada, sold their Hong Kong apartment when violence escalated, Foo said. The pair declined to be interviewed, while Foo declined to reveal their personal details.
Cooling measures levied by Singapore’s government in July 2018 made it more expensive for foreigners to buy property in the city-state. But the curbs have impacted cheaper units the most: Sales to Chinese buyers of apartments S$5 million or more doubled in the third quarter of last year from the same period of 2018.
“It shows that high-net-worth individuals are less affected by the cooling measures than those seeking to buy lower and mid-tier apartments,” said Christine Li (李敏雯), head of research for Singapore and Southeast Asia at Cushman & Wakefield PLC.
And while China has tightened capital controls to crack down on money leaving the country, the rich, it seems, can still find a way around things.
With many owning businesses overseas, they’re often able to fund their acquisitions through those channels, according to Justin Tang, the head of Asian research at investment and advisory group United First Partners LLP.
China also operates an annual quota system whereby individuals can in some circumstances take US$50,000 out of the country over a 12-month period. It is common for relatives to pool their quotas, so much larger amounts can be transferred.
Home prices in Singapore have also moderated, making buying an apartment more affordable. Private home prices rose just 0.5 percent in the final quarter of last year compared with a 1.3 percent expansion the previous three months. For all of last year, apartment prices on the island increased 2.7 percent, well below a jump of 7.9 percent in 2018.
Singapore has “done well economically, which could also result in additional benefits such as long-term price appreciation,” Li said.
RETAIL BANKING EXIT: Clients are concerned whether their rights would be protected, while employees were caught by surprise as the bank had just upgraded its services Citibank Taiwan Ltd (花旗台灣) yesterday said that credit card clients could continue using their cards as operations would continue normally until it sells its consumer banking business. As of February, the bank had 2.86 million credit cards in circulation in Taiwan, of which 2.17 million had been used in the past six months, ranking it sixth among all banks, data from the Financial Supervisory Commission showed. Credit card spending by Citibank clients totaled NT$15.66 billion (US$552.6 million) in February, also ranking sixth among banks in Taiwan. Citibank was the only foreign bank that made it into the top six. Customers should not
PANDEMIC EFFECT: Chromebook shipments in the first quarter more than tripled from a year earlier, driven primarily by educational institutions in North America Despite a semiconductor shortage, global PC shipments in the first quarter of this year increased 32 percent from a year earlier, preliminary data from research firm Gartner Inc showed. Shipments in the January-to-March period totaled 69.87 million units from 52.93 million units a year earlier, Gartner said in a report on Monday last week. The quarterly increase in shipments marked the fastest annual growth since it began tracking the PC market in 2000, Gartner said. “This growth should be viewed in the context of two unique factors: comparisons against a pandemic-constrained market and the current global semiconductor shortage,” Gartner research director Mikako Kitagawa
NO MONEY LAUNDERING: Banking Bureau Deputy Director-General Lin Chih-chi said transactions of more than NT$500,000 conducted in cash would need to be reported The Financial Supervisory Commission is to set up new money laundering regulations for the nation’s cryptocurrency exchanges from July 1, requiring them to report transactions valued at more than NT$500,000 (US$17,770), the commission said yesterday. The move came after the Executive Yuan earlier this month demanded that the commission establish regulations to prevent money laundering in the cryptocurrency industry. The cryptocurrency industry includes local trading platforms for cryptocurrencies, cryptocurrency wallet providers and firms that conduct security token offerings, the Executive Yuan said. The commission plans to require cryptocurrency exchanges to report any transaction of more than NT$500,000 conducted in cash, or an equivalent
TREASURY REPORT: A US government report urging the central bank to curtail its foreign-exchange intervention, coupled with soaring exports, might lift the NT dollar The New Taiwan dollar yesterday posted its biggest daily advance since December last year after a report by the US Department of the Treasury last week hinted that US President Joe Biden’s administration could exert greater pressure on Taiwan’s central bank to allow the local currency to appreciate. The NT dollar rose 0.5 percent to close at NT$28.205 against the greenback, and was emerging Asia’s best-performing currency for the day. While the Treasury report on Friday did not label Taiwan as a currency manipulator, it said the US would initiate “enhanced bilateral engagement” to address what it considers as “structural undervaluation”