What causes the high investment activity in Singapore
Analysts at Real Capital Analytics evaluated the real estate market in the Asia-Pacific region. According to the results, the greatest investment activity was observed in Singapore. During the first half of this year here, more than 50% of total transactions accounted for foreign buyers.
Overall, for 6 months the investment activity in the Singapore market grew by 97% and reached $4.7 billion. Despite the excellent performance, this result is the third-largest in modern history for the country. The maximum volume of investment in real estate was observed in 2019. And as for the inflow of foreign capital, here Singapore has become a leader among the popular destinations for investment.
Residential real estate in the country is rising in price as buyers’ activity increases. More investors are returning to the market as the level of confidence in the segment is increasing. As for demand, it has been highest in the office and industrial sectors. However, the residential market practically did not lag behind, which was facilitated by the recent sale of the Eden complex, owned by Swire Properties. The transaction amounted to more than $220 million, boosting investment in the residential sector.
In general, Singapore shows the general trend for the Asia-Pacific region – the market recovery and increase in buying activity. It recorded stable positive dynamics in almost all countries. Investment activity in the region reached almost $78 billion, 8% more than in the previous period.
High demand in Singapore was recorded in the segment of luxury housing. Sales of these homes have reached a ten-year high. During the quarter the number of transactions increased by 25% and amounted to 1930 units. According to statistics, this period is the most successful since Q4 2010, when 2014 units of luxury homes were sold. High demand contributes to the growth of prices, which, in turn, is fueled by consumer confidence in the market. As a result, housing in Singapore is rapidly becoming more expensive, and so far there is no sign of a slowdown in the trend.
Approximately 3.5 thousand luxury homes were sold in the first half of this year, this figure exceeds the annual figures for 3 years. Buyers purchased 272 prestigious condominiums worth more than $5 million. This was the highest result since 2014. 70 units belong to the “super-luxury” category, whose value starts at $10 million.
And buyers of such real estate belong to different categories. There are big businessmen and individuals involved in the field of biomedicine or IT. The number of local investors in luxury housing is steadily growing.