CommercialGuru.com.sg is Singapore's commercial property expert offering you the best one-stop solution to start your commercial property search as an investor, buyer for own use, or tenant looking to rent commercial space.
Foreign interest in non-residential properties remains flat
Jun 08, 2012
by Cheryl Tay Foreign interest in commercial and industrial property remained lukewarm, despite the 10 percent additional buyers' stamp duty (ABSD) on residential properties. Foreigners, including permanent residents (PRs), bought only 13 strata shops in Q1 2012, a slight increase from 11 in Q4 2011, according to a report by Ong Kah Seng, Director at R'ST Research. For the period of January to May 2012, foreigners acquired 33 units in this category, which account for a mere seven percent of the 489 units sold over the period. When it came to factories, including landed and strata-titled ones, foreign buyers acquired 22 units in Q4 2011 and 29 in Q1 2012. In the first five months of this year, foreigners bought 41 units, or only four percent of the 930 units of total purchases within this category. Ong noted that the proportion sold to foreigners is still small. "Singaporeans and companies still made up the bulk of buyers, which has always been the case." A slightly different trend, however, was observed for strata offices. From January to May 2012, foreigners picked up about 43 units, accounting for 16 percent of the 266 units sold. In Q4 2011, 12 strata offices were sold but figures rose to 30 units in Q1 this year. Apart from the 10 percent ABSD that applies to foreigners, PRs also pay an additional three percent for their second home purchase. The ABSD could be blamed for the decline in private home sales to 1,317 units in Q1 from 2,234 units in the previous quarter. Ong said most foreigners have little knowledge of the technical aspects of non-residential sectors. "(This is) unlike private residential properties which foreigners buy in the hope of long-term capital appreciation, investment, or as a holiday home. As commercial and industrial properties don't offer the possibility of owner-occupation, it remains unpopular with foreigners," he added.