Singaporeans' share of private home purchases continued to slip in 2014

SINGAPORE - Singaporeans made up a smaller share of private home purchases here last year, constituting 71 per cent of sales compared to 75 per cent and 77 per cent in 2013 and 2012 respectively, according to an analysis by DTZ.

The proportion of sales to Permanent Residents (PRs) increased from 15 per cent in 2013 to 18 per cent last year, while that to foreigners remained unchanged at 9 per cent.

According to DTZ, Singaporeans tended to be more active in the primary than the secondary property market. The primary market experienced a decline last year, with only approximately 6,700 units transacted, under half of the 14,640 in 2013.

In its report, DTZ attributed the slowdown of the primary market to the property market cooling measures, particularly the curbs on property loans imposed through the Total Debt Servicing Ratio (TDSR) framework in June 2013. The regulations prevent banks from approving new property loans if borrowers' monthly debt repayments exceed 60 per cent of their gross monthly income.

Launches of new private property also fell last year.

According to the report, the increased purchases by PRs may be linked to the three-year waiting period before new PRs become eligible to buy a resale public flat, part of the cooling measures. This may have shifted demand to the private housing market, said DTZ.

Among the sales to foreigners, in the fourth quarter of last year, approximately 78 per cent were to mainland Chinese, Malaysians, Indonesians and Indians.

This is the lowest collective share for these four groups since 2011.

Malaysians were especially active in the primary market, possibly due to the launch of Marina One Residences, a joint development between the Malaysian and Singaporean governments, according to the report.

At the same time, the share of sales to citizens of the United States, the United Kingdom and Southeast Asian countries excluding Malaysia and Indonesia increased.

Due to the 2003 Free Trade Agreement between Singapore and the US, Americans are accorded the same treatment as Singapore citizens and are exempt from paying the Additional Buyers' Stamp Duty (ABSD) on their first private home purchase.