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.
‘SHORT-TERM ECONOMIC PAIN’: A military takeover would only temporarily weigh on wafer production on both sides of the Taiwan Strait, IC Insights said Taiwan has more chip manufacturing capacity than any other economy in the world, US-based market information advisory firm IC Insights said in a research paper last week, cautioning that the nation’s strength could prompt China to attempt to take over Taiwan. Taiwan commanded 21.4 percent of global installed IC capacity, ahead of South Korea’s 20.4 percent, Japan’s 15.8 percent and China’s 15.3 percent, North America’s 12.6 percent and Europe’s 5.7 percent, IC Insights said. Taiwan is one of two countries that uses 10-nanometer technology or better to produce wafers, holding 62.8 percent of global capacity, with South Korea holding the remaining 37.2
SELF-SUFFICIENCY: Alibaba is one of a number of Chinese firms that has answered Beijing’s call to invest in the development of cutting-edge technologies Alibaba Group Holding Ltd (阿里巴巴) yesterday unveiled a new server chip that is based on advanced 5-nanometer technology, marking a milestone in China’s pursuit of semiconductor self-sufficiency. The Chinese tech giant’s newest chip is based on micro-architecture provided by the SoftBank Group Corp-owned Arm Ltd, it said. Alibaba, which is holding its annual cloud summit in Hangzhou, China, said that the chip is to be used in its own data centers in the “near future” and would not, for the time being, be sold commercially. “Customizing our own server chips is consistent with our ongoing efforts toward boosting our computing capabilities with better
AGGRESSIVE STEP: With the new processors, Apple is aiming at the high-end chips Intel has provided for the MacBook Pro and other top-end Macs for about 15 years Apple Inc on Monday took the most aggressive step yet to strip Intel Corp chips from its computers, announcing more powerful homegrown Mac processors alongside a total revamp of its MacBook Pro laptop computers. The company showcased the chips at an event called “Unleashed,” which also included its latest audio products. The new components, called the M1 Pro and M1 Max chips, are 70 percent faster than its M1 predecessors, Apple said. It also unveiled a redesigned MacBook Pro, adding larger screens, MagSafe charging and better resolution. With the new processors and devices, Apple is aiming squarely at the high-end chips that Intel has
PRICE SPREAD: Oil trading under the Brent futures contract is giving the US a hefty edge in pricing, increasing the rush to secure cheap fuel as winter approaches Asian demand for US oil is rising as the energy crisis boosts prices for other crudes that are priced against the global Brent futures contract. China and other Asian buyers have been snapping up supertankers of US oil for delivery next month and seeking more for December, some traders have said. Most buyers are seeking US grades that had recently slumped to the lowest levels in more than a year, with an added incentive after Beijing awarded millions of tonnes of crude oil import quotas. A wide spread between Brent and West Texas Intermediate (WTI) oil futures is accommodating higher US crude
RSS