Singapore luxury apartment sales surge to 11-year high

Chinese investors are turning to Singapore as a safe alternative to rival hub Hong Kong. (Shutterstock)
Updated 20 September 2019

Singapore luxury apartment sales surge to 11-year high

  • Sales of such apartments also exceeded the numbers racked up for each full year from 2011 to 2018, the consultants’ analysis of transaction data shows

SINGAPORE: Sales of Singapore apartments worth at least S$10 million ($7.3 million) have hit an 11-year high, fueled by increased demand from Chinese millionaires seeking safe-haven assets, say property consultants OrangeTee & Tie.

Investors have long viewed Singapore as an island of stability that attracts the super-rich from its less developed Southeast Asian neighbors, as well as multimillionaires from mainland China.

In the first eight months of 2019, 68 condominium units in the wealthy Asian city-state were sold for S$10 million and more, the highest tally since the corresponding period of 2008.

Sales of such apartments also exceeded the numbers racked up for each full year from 2011 to 2018, the consultants’ analysis of transaction data shows.

Some buyers may have sought an alternative to rival financial hub Hong Kong, hit by protests, while others may have shifted funds from China after its yuan currency was devalued in a trade war with the US, an OrangeTee expert said.

“This may explain why we have observed more foreign buyers, especially mainland Chinese, coming into Singapore lately,” said Christine Sun, its head of research and consultancy.

Mainland Chinese are the biggest group of foreign buyers of Singapore luxury homes.

In Singapore’s prime districts, Chinese citizens bought 76 apartments worth more than S$5 million from January to August, versus 75 purchases by Singaporeans, data until Sept. 19 show.

Expensive apartments in premium neighborhoods are mainly bought by foreigners, because at such high prices Singaporeans have the option to buy landed property, such as bungalows and mansions.

Singapore does not allow foreigners to buy landed homes, except for those on the resort island of Sentosa.

“We do see that even though the stamp duties have increased .... we are still seeing people putting big money on these apartments, predominantly it is more for stability than anything else,” said Boon Hoe Leong, chief operating officer of high-end realtor List Sotheby’s International Realty.

He was referring to measures Singapore adopted last year to cool its real estate market, such as hiking additional stamp duties for foreign buyers to 20 percent from 15 percent.

“They are parking their money here — they know that the Sing dollar won’t depreciate overnight,” he added. 


Egypt to press ahead with sale of stakes in state companies — govt adviser

Updated 52 min 47 sec ago

Egypt to press ahead with sale of stakes in state companies — govt adviser

  • The government has been talking for years about selling the stakes but has repeatedly postponed the program
  • The government set up NI Capital in late 2015 as a state-owned financial services company to help it navigate financial markets

CAIRO: Egypt is fully committed to its program to sell minority stakes in state companies and is tackling a number of issues that have held it up, a government adviser on the share sales said on Thursday.
The government has been talking for years about selling the stakes but has repeatedly postponed the program, raising doubts among some economists about its commitment to privatization.
“From the meetings I attend on a weekly basis, the government is as keen as I have ever seen them on proceeding with the privatization program,” Mohamed Metwally, CEO of NI Capital, told Reuters.
“There has never been slack on this. It’s just a matter of sometimes you face things that take longer to prepare than expected,” said Metwally in his first interview with the media since taking over as NI Capital’s CEO in July.
The government set up NI Capital in late 2015 as a state-owned financial services company to help it navigate financial markets.
The government announced in 2016 that it was selling company stakes, with some to be sold by the end of that year. Since then it has sold only 4.5% of one company, tobacco monopoly Eastern Company in a transaction in March.
Metwally said the delays had been caused by weak markets, legal hurdles, the readiness of each company’s financial documentation and in the case of some companies a downturn in the business cycle.
Egypt last year released a list of 23 state-controlled companies to be brought to market as an initial batch.
The first sales will be companies already trading on the Egyptian Exchange, most likely Abu Qir Fertilizers and Chemicals Industries and Alexandria Container and Cargo Handling Co., sources familiar with the planned transactions told Reuters.
Metwally, citing reasons of financial compliance, declined to discuss individual companies before they reached the market.
He said stake sales could raise around 40 billion Egyptian pounds, roughly equal to 5% of the stock market’s current capitalization of 750 billion-800 billion pounds.
Among the hurdles bringing companies to market has been a tangle of ownership structures, with different entities requiring different legal processes for selling their assets.
“We had a few transactions that were held up by this process, but now it’s behind us,” Metwally said.
A potential future delay to the Egyptian share sales could be the initial public offering of Saudi Arabia’s state oil company Aramco, which may be announced as early as next week.
“Right now liquidity is being sucked out of the market because of anticipation of the Aramco offering,” Metwally said.
If the Aramco sale raises more than $25 billion, it would make it the world’s biggest IPO.
“Now should it (the Egyptian sales) happen, let’s say, in November, or wait till January or February when the Aramco IPO is out of the way?” he said.
Another stumbling block has been the trade war between China and the United States, which by creating a glut in products sold by some of the companies reduced their prices by 30-40% and temporarily lowered valuations, Metwally said.
He said these issues were all being resolved, paving the way for a possibly rapid roll-out.
“Progress is happening in every single transaction,” he said.
“That might put us in a high-quality problem in the future, in which they’re all ready at the same time, and we’ll just have to schedule them one after the other as part of our capital markets management process.”