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.
RSS