Singapore’s prime residential market is showing signs of a rebound, led by demand from Malaysian and Chinese buyers who have been spurred by political and economic uncertainties at home, a new survey shows. Property sales in Singapore’s upmarket districts jumped almost 70% from 364 in the first three months of the year to 608 in the second quarter, according to real estate services firm DTZ. The prime districts include the city center and the exclusive island resort of Sentosa. Demand from foreigners was up 63% quarter-on-quarter, with 219 sales to overseas buyers recorded during the period. More: Luxury Homes Go Under the Hammer in Singapore Malaysians and Chinese were top buyers, according to DTZ, followed by those from Indonesia, the U.S. and Hong Kong. “This trend seems interesting,” Lee Nai Jia, the Southeast Asia research head for Chicago-based DTZ, told Mansion Global. “It coincides with a time when the Chinese market is still uncertain due to the (turmoil in the) equity market and for Malaysia, the falling ringgit. Malaysian buyers are coming to Singapore to safeguard their wealth.” Lee said he was surprised to see increased demand among buyers from neighboring Malaysia as its currency, the ringgit, has fallen heavily which means Malaysians have to pay more for Singapore property.
The ringgit is Asia’s worst-performing currency this year, having fallen about 20% against the dollar over the past 12 months, on concerns over the slumping prices of oil, a key export, and political turmoil stemming from a government corruption scandal. China has faced two economic shocks in recent weeks. An equities rout beginning in June wiped trillions of dollars off the stock market, followed by the devaluation this month of its tightly-controlled yuan currency to help its exports and combat an economic slowdown. More: Chinese Developers at Risk as Yuan Slides “(Singapore’s property sector) is helped by these regional factors. All these uncertainties make Singapore even more attractive,” Lee said. Foreign buyers had been put off by the city-state recently due to tough government steps aimed at cooling the market, but they are now used to the new measures and are returning to the market, he added. Singapore has introduced measures including additional stamp duties and stricter mortgage rules to rein in sky-high property prices. Despite the promising recent signs, Singapore remained the weakest luxury residential market in the second quarter in terms of price growth in Knight Frank’s Prime Global Cities Index, which tracks luxury residential prices in 35 major cities.