Nation is on the Top 3 destinations for overseas home buyers
By Joseph Wong
Singaporeans' interest in overseas real estate continues to surge, with Malaysia securing its position as one of the top destinations for property investment, taking the third spot after Australia and Thailand respectively.
The data, based on enquiries made by property buyers in Singapore between January 2020 and November 2023, sheds light on the preferences of Singaporean investors when considering international property ventures.
According to insights from Juwai IQI co-founder and group chief executive officer Kashif Ansari, Australia emerges as the leading destination for Singaporean homebuyers, capturing the attention of affluent investors.
He noted that Australia's appeal aligns with its status as the number-one destination globally for millionaires. In 2023 alone, approximately 5,200 millionaires chose Australia as their new home, surpassing other popular locations such as the United Arab Emirates (UAE) and the United States, as reported by global citizenship and residence advisory firm Henley and Partners.
The ranking of top destinations following Australia includes Thailand, Malaysia, Japan and the United Kingdom. Malaysia's prominent placement underscores its attractiveness to Singaporean investors seeking diverse opportunities in the real estate market. The data reflects the sustained interest in Malaysia, emphasising its status as a preferred choice for overseas property buyers from Singapore.
The insights provide a comprehensive view of the evolving landscape of Singaporean property investments, showcasing the diverse options that appeal to discerning investors. As Singaporeans look beyond their borders for lucrative real estate prospects, Malaysia stands out as a compelling destination, offering a combination of attractive features, strategic location and potential for robust returns on investment.
“The global focus has been on Chinese buyers for the past decade and a half but buyers from Singapore have been active for longer. While the total international residential real estate investment out of Singapore isn’t comparable to the total from China, it still far out-paces any other country when you consider Singapore’s small size.
“There are several reasons that Singapore is one of the world’s top buyers of international real estate, but at the base of them all is a cultural preference for property investment and an abundance of capital. Singapore is a small country with a constrained domestic market, high levels of wealth and an international outlook.
“When Singaporean investors purchase overseas residential real estate, they are usually seeking to diversify their investments, take advantage of Singapore’s strong dollar, avoid higher transaction costs at home, provide housing for their children who are studying abroad, or obtain second homes for retirement and holidays,” said Ansari.
Australia’s appeal
Australia takes the lead, capturing a substantial 27.5% share of all outbound residential property inquiries originating from Singapore. This notable preference underscores Australia's enduring popularity among Singaporean investors, driven by factors like cultural affinities, educational opportunities, a stable real estate market, quality of life and geographic proximity. The city of Perth, situated on Australia's West Coast, is a mere five hours and 10 minutes away by flight from Singapore.
Singaporean buyers generally navigate Australia's foreign buyer restrictions without significant hurdles. While offshore buyers are restricted to off-the-plan properties, Singaporeans often find these new projects particularly appealing. Furthermore, permanent residents enjoy the privilege of purchasing properties under the same terms as Australian citizens.
Given the substantial financial capacity of Singaporean buyers, they hold a distinct advantage in a market like Australia, where mortgage rates tend to be high. In the financial year 2022-23 alone, Singaporean buyers invested a noteworthy AU$300mil (RM937.73mil) in residential real estate in Australia. This places them ahead of buyers from significantly larger countries, including India, Indonesia, the United Kingdom and Malaysia, reaffirming Singapore's prominent presence in the Australian real estate landscape.
Thailand comes next
“Thailand follows with 16.5%, indicating its attractiveness as a nearby investment destination with potentially high rental yields and a favourable lifestyle appeal. Thailand is also attractive because prices are extremely low compared to homes in Singapore,” said Ansari.
Beyond condominiums in Bangkok, Singaporeans exhibit a keen interest in holiday properties located in the Thai havens of Phuket and Pattaya. These locales hold appeal due to the lifestyle they present, coupled with affordability.
According to official statistics, foreign buyers constituted 11% of residential transactions in the first half of 2023. Singaporean buyers joined a diverse group that included individuals from mainland China, Hong Kong, Taiwan, Myanmar and Japan in contributing to this segment of the property market.
Third most popular
Ranked as the third most favoured destination, Malaysia captures 13.2% of Singaporean buyers' inquiries, making it a significant choice. The appeal of Malaysia lies in its strategic proximity to Singapore and the economic ties shared between the two nations, making it a logical and attractive option for property buyers.
“The new Singapore Rapid Transit (RTS) project that will shift 10,000 persons an hour between the two countries is more than half complete and promises to increase the number of Singaporeans living the cross-border lifestyle, with first or second homes in Johor Bahru, Malaysia and jobs in the city state. IQI, the agency network that is a member of Juwai IQI, saw a 17% increase in Singapore buyer transactions in Johor Bahru in the first quarter of 2023, compared to the same period last year,” said Ansari.
Japan ranks fourth with Singaporean residential buyers and receives 12.6% of their global purchasing enquiries. It is appealing due to its strong economy, unique culture and potential for property value appreciation.
The depreciation of the yen this year has also attracted many institutional and individual investors in Singapore. From the hotel industry to the logistics hub, Singaporean investors have invested heavily in Japanese commercial real estate, making Singapore the largest foreign investor in Japanese real estate this year.
“The United Kingdom, capturing 6.6% of enquiries, reflects its status as a significant global financial hub and a popular destination for education and lifestyle. Like buyers in other Asian countries, many Singaporeans buy in the UK to provide a residential base in the country that facilitates their children's studies there,” said Ansari.
Many Singaporean buyers find that the price of apartments in Manhattan in the United States is about one-fifth cheaper on a per square foot basis than in Singapore. In addition, there are no restrictions on foreign property buyers in the United States. In Manhattan, Miller Samuel reports the average per square foot sales price in the third quarter of 2023 was US$1,622 (RM7,524.46), equivalent to S$2,167 (RM7,564.26). That compares to S$2586 (RM9,026.85) in Singapore’s Core Central Region in Q2, according to Juwai IQI’s Singapore partner, OrangeTee.
“The turmoil in Vietnam's property sector in the past year or two has not entirely deterred Singaporean buyers, who believe that there are still investment opportunities in Vietnam's property market.
“Ho Chi Minh City and Hanoi are still among the 10 most attractive destinations for cross-border investments by Asia-Pacific buyers, according to an industry survey. Singaporean buyers are among the most active, along with buyers from Hong Kong, mainland China, the Republic of Korea and Japan,” said Ansari.
Singaporean property developers and investors are also making their presence known in high-end condominiums in Phnom Penh, Cambodia, which attracts Singaporean investors with a high return on investment. Yields in Singapore itself are moderately good by international standards, at 4.8% on average, but are significantly below the 6% to 7% average rental yield reported in Phnom Penh, Cambodia.
The top Singaporean buyer destinations in Indonesia are Jakarta and Bali. Most Singaporean buyers in the country are purchasing second homes, followed by investment purchases. The residential market in Jakarta remains challenged, with limited price growth and a 12% fall in transactions in the second quarter.
Malaysia captures 13.2% of Singaporean buyers' inquiries, said Ansari.
Stay ahead of the crowd and enjoy fresh insights on real estate, property development, and lifestyle trends when you subscribe to our newsletter and follow us on social media.
