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Analysts note growing trend of foreigners snapping up of shophouses in Singapore; Prices seemingly up as a result

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2 years ago

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It was reported in the Straits Times today (26 Sep) that a three-storey shophouse on Stanley Street in Singapore’s Chinatown was snapped up by a foreigner for $15.5 million last Sep.

In fact, the shophouse was bought by a local only in Jan last year for $11.5 million. In the span of just 8 months, the local seller has made himself a cool profit of $4 million. This works out to about a gain of $500,000 a month for the local investor.

In another transaction, a 1,149 sq ft shophouse at Arab Street, bought for $5.5 million last Feb, was sold for $10 million this Apr. The seller made an excellent profit of $4.5 million after owning the property for just 14 months. The identity of the buyer was not disclosed.

Altogether, there were 114 shophouse sales in the first six months of this year with a total worth of nearly $1 billion. The shophouse sector is poised for further gains following a new wave of demand coming from foreign investors, analysts said. Mr Leonard Tay from Knight Frank noted that foreign buyers are mainly from China and India.

PropNex Realty’s senior group district director Richard Tan added that other foreign investors also include Indonesia, Malaysia and Hong Kong. “(They) did not lodge a caveat as they wanted to keep a low profile. Some foreign investors also made their purchases through their companies,” Mr Tan explained. He himself has sold around five shophouses in Amoy Street and Stanley Street in the millions, over the past two years.

“These buyers see Singapore as a safe haven to park their wealth, especially when data has shown that majority of shophouse sales are profitable. Moreover, there are no restrictions on the number of commercial shophouses foreigners can buy without having to pay any additional buyer stamp duty (ABSD).”

Indeed, such huge gains are becoming almost routine as tight supply and lack of restrictions are attracting more foreign investors to buy up Singapore shophouses.

Data from Urban Redevelopment Authority (URA) shows that historically high per square feet (psf) prices are being broken for shophouses in conservation areas such as Little India, Tanjong Pagar, Kampong Glam and Geylang this year.

The highest psf price for Tanjong Pagar was recorded in May when a shophouse unit was sold for $10,215 psf or $13.25 million, while another went for a record psf price of $8,649 or $9.3 million in Little India in the same month.

Ms Yap Hui Yee, senior director of investment sales and capital markets at Savills Singapore, said, “Purchasers see shophouses as an opportunity to hedge against inflation and the volatility in the equity market and other asset classes. So amid the limited supply and high liquidity environment, they will continue to be the preferred asset class for mid-to-long term investments.”

And for foreigners, there is another added advantage — the strong Singapore dollar. By investing in Singapore properties, they are also hedging their own country’s currency against the Singapore dollar.

Foreigners Account For Very Small Proportion Of Private Housing Transaction Says Minister

Other than commercial properties, there has been growing concern from the public as to whether there is an increase of foreigners purchasing private properties in Singapore following news of bulk property purchases such as 20 units bought at CanningHill Piers, a condominium along the Singapore River, by a Chinese national for more than S$85 million.

In response to such concerns, Mr Leong Mun Wai, a Non-Constituency Member of Parliament, asked the Singapore Minister for National Development whether the inflow of foreign money into the local property market has increased in the last two years and if so, whether such inflow has pushed up private and public property prices in the last two years.

Minister Desmond Lee, in his response, noted that foreigners account for a very small proportion of private housing transactions. In the past two years, they accounted for around 3% of all private housing transactions. This is lower than the pre-pandemic level of around 5% between 2017 and 2019.

On the same topic, the Minister also provided data for Mr Gan Thiam Poh, MP for Ang Mo Kio GRC, who asked if the Ministry of National Development has data on the total number and percentage of private residential properties that are bought by locals and foreigners respectively for each of the past three years.

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Property

Flat in Toa Payoh sold for S$1.2M, becomes most expensive 4-room HDB in estate

A four-room HDB flat at Toa Payoh Crest has set a new record, selling for S$1.201 million. The 1,000 sq ft flat, located between the 37th and 39th storeys of Block 130A, has 93 years left on its lease. This September transaction eclipsed the previous high of S$1.2 million for a flat in neighboring Block 131B.

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2 weeks ago

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30 September 2024

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SINGAPORE: A four-room Housing and Development Board (HDB) flat in Toa Payoh has been sold for a record-breaking S$1.201 million, setting a new high for the area.

The 1,000 sq ft flat, located at Block 130A Lorong 1 Toa Payoh in the Toa Payoh Crest estate, has 93 years left on its lease and sits between the 37th and 39th storeys.

The flat, sold in September for S$1,200,888, surpassed the previous record held by a similar four-room flat at Block 131B, which fetched S$1.2 million in June this year.

Source: HDB

Highly Sought-After Estate

According to property portal 99.Co, Toa Payoh Crest, completed in 2018, has emerged as a popular choice for homebuyers.

The estate comprises four 40-storey blocks with a total of 1,007 units. So far, it has recorded 16 million-dollar-flat transactions this year alone.

The estate’s prime location contributes to its high demand.

Based on Google Maps, Toa Payoh Crest is conveniently located near three MRT stations: Caldecott, Braddell, and Toa Payoh.

In addition, its proximity to Toa Payoh West Market and Food Centre, as well as Toa Payoh Central, makes it highly attractive for potential buyers.

The unblocked view of the city skyline, thanks to the undeveloped plot of land next to the estate, further enhances its appeal.

Price Hikes and Concerns

Although record-setting resale prices continue to make headlines, Minister for National Development Desmond Lee pointed out on August 20 that flats with very high resale prices account for “a very small proportion of all transactions.”

He noted that such sales represent only 0.5 per cent of all four-room or smaller flat transactions in the past two years.

These units tend to be centrally located, well-connected to public transport, and situated on very high floors with good views.

Nevertheless, the rise in million-dollar flats has sparked concerns about the affordability of resale flats in general.

Minister Lee warned that these transactions could lead to unrealistic price expectations among sellers and anxiety among buyers, potentially distorting market dynamics.

He cautioned that if the market moves too far out of sync with economic fundamentals, it could result in a property bubble.

Million-dollar flats currently account for about 2 per cent of all resale transactions over the past 1.5 years.

In August alone, 104 flats were sold for at least S$1 million, down from 120 in July.

In the first seven months of 2024, 539 HDB flats crossed the million-dollar threshold, compared to 470 in 2023 and 369 in 2022.

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Property

Newly MOP-ed projects in Bidadari and Ang Mo Kio fetch S$1.2M and S$1.08M

Two recently MOP-ed projects have achieved impressive resale values: a unit at Alkaff Vista in Bidadari sold for S$1.2 million, marking the highest resale in the area, while a flat at Cheng San Court in Ang Mo Kio fetched S$1.08 million, making it the most expensive 4-room HDB resale not just in Cheng San Court but throughout Ang Mo Kio.

Published

3 weeks ago

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23 September 2024

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SINGAPORE: Two recently MOP-ed (Minimum Occupation Period) projects have achieved significant resale values.

As per reported by Singapore’s property portal 99,co, a unit at Alkaff Vista in Bidadari sold for S$1.2 million, while a flat at Cheng San Court in Ang Mo Kio fetched S$1.08 million.

A check on HDB website indicated that the S$1.2 million 5-room unit located at Block 106A, Bidadari Park Drive.

This particular unit, situated between the 7th and 9th floors of the 17-storey building, spans 1,216 square feet.

Launched in 2010 and completed in 2019, Alkaff Vista boasts nearly 95 years remaining on its 99-year lease, contributing to its substantial market value.

When Alkaff Vista’s BTO units were initially launched, 4-room flats began at S$433,000.

Alkaff Vista offers a range of amenities, including a children’s playground, fitness stations, and a roof garden on the 8th storey, appealing to families and individuals alike.

Its location adds further allure, being a mere 5-minute walk from Potong Pasir MRT Station and conveniently close to various shopping hubs and schools, such as Cedar Primary School and St. Andrew’s Junior School.

Interestingly, the S$1.2 million sale stands as the highest resale not only in Alkaff Vista but across Bidadari.

This project is the first in the area to reach MOP, and its current lack of competition may have contributed to the elevated prices.

As more projects in Bidadari reach MOP, it is anticipated that additional million-dollar sales will follow.

This S$1.2 million sale is not an isolated event; in fact, three other transactions from the project were also sold at impressive prices, with two of them exceeding the S$1 million mark.

4-Room unit at Cheng San Court Achieves S$1.08 Million Sale

Meanwhile, a unit at Cheng San Court (Block 590B, Ang Mo Kio Street 51) recently sold for S$1.08 million.

This flat, located between the 28th and 30th floors of a 32-storey block, measures 1,001 square feet and achieved a price of S$1,078 psf.

Cheng San Court, launched in 2019, is one of the youngest resale projects in Ang Mo Kio, with approximately 93 years and 6 months left on its lease.

Original buyers of this Cheng San Court unit also experienced a notable capital gain.

When the project was launched, 4-room flats were priced from S$435,000, making the recent resale price a 59.72% increase, or S$645,000.

Cheng San Court has seen a surge in million-dollar transactions since recording its first such sale in November 2023, marking Ang Mo Kio’s first-ever million-dollar sale for a 4-room flat.

With this latest S$1.08 million transaction, it stands as the most expensive 4-room HDB resale not only within Cheng San Court but throughout Ang Mo Kio.

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