SINGAPORE) Sales of private homes rose 21.6 per cent quarter on quarter in Q2 2011 and the number of units bought by mainland Chinese buyers hit a new high, according to a new report from DTZ.
The property firm, which analysed caveats lodged for both new and secondary sales, said that the number of transactions rose to 8,458 in the second quarter of this year from 6,958 deals in Q1.
Mainland Chinese buyers continued to be the top non-Singaporean purchasers of residential properties in Singapore for the second consecutive quarter. In absolute terms, purchases by mainland Chinese buyers accounted for 640 units of all private residential transactions - which is a new high and more than the 527 units purchased in Q1 2011.
The total proportion of private homes bought by all foreigners stayed at a record high of 16 per cent in the second quarter of 2011 - the same ratio as in the first three months of the year and the highest quarterly percentage recorded since data was made available for analysis in Q1 1995.
'The bulk of private residential purchases by foreigners continued to be in the high-end market segment,' said DTZ's head of South-east Asia research Chua Chor Hoon. Of the total private residential purchases by foreigners, 43.3 per cent cost $1.5 million or more.
DTZ, which downloaded the caveats from URA Realis on August 5, also found that the ratio of buyers with HDB addresses has been inching up over the last three quarters.
Such buyers bought 38.7 per cent of all private homes in Q2 2011, up from 37 per cent in Q1 2011 and the 34.6 per cent in Q4 2010.
And in a reversal from past trends in 2010 and Q1 2011, more purchasers with HDB addresses bought units of sizes below 1,000 sq ft as compared to purchasers with private addresses.
DTZ found that 50.3 per cent of buyers who picked up units below 1,000 sq ft in Q2 2011 had HDB addresses, which is an increase over the 47.5 per cent in Q1.
A separate analysis of caveats by Knight Frank similarly found that more HDB upgraders bought small, or 'shoebox', units in Q2.
Some 16.4 per cent of home buyers with HDB addresses bought shoebox units (which Knight Frank defined as units with sizes up to 550 sq ft) in Q2 2011, higher than the 14.6 per cent in Q1 2011 and significantly higher than the 8.6 per cent in Q2 2010, Knight Frank said. The firm downloaded caveats on August 16. 'A significant group of these HDB buyers may be investors looking for rental yields in a low interest rate environment,' said Knight Frank research head Png Poh Soon.
'Based on their budget, shoebox units with a lower price quantum appeal to these buyers.'
Looking ahead, analysts noted that concerns over the US and Europe debt problems and the slowing economy have led to more cautious sentiments in the private residential market.
Said OCBC Investment Research analyst Eli Lee in a recent report: 'We expect developers and buyers alike to remain cautious for the remainder of H2 2011 and sales volume to soften going forward.'
In Singapore, purchase demand for private homes will still be supported by economic growth and the low-interest rate environment in Singapore, DTZ's Ms Chua said.