After a short lull in the 'rst quarter of this year, Singaporeans seem to be trotting back to the luxury property market, with the total number of units purchased by them so far this year surpassing the total number transacted by this group in the whole of last year. A total of 46 luxury homes were purchased by Singaporeans in 2012, as compared to 40 homes in 2011, according to a report released by DTZ.

The spike was contributed primarily by transactions made in Q2, which saw a total number of 31 luxury homes purchased by Singaporeans as compared to 11 in the same period last year.

The proportion of purchases made by Singaporeans was found to have increased signi'cantly from 19 per cent in 2011 to 35 per cent in 2012 year to date almost on a par with foreigners.

For the 'rst three quarters of this year, foreigners purchased 49 homes, contributing to approximately 37 per cent of the purchases made. This is signi'cantly lower than the 100 luxury homes purchased in 2011, which contributed to 47 per cent of luxury homes purchased last year.

The remaining 27 per cent of luxury'home transactions were made by Singapore permanent residents and companies who purchased 32 and four luxury homes so far this year respectively.

Luxury home prices, which have fallen 2.0 per cent over the past three quarters, also stabilised in Q3, in part due to increased purchases by local buyers. The average price per square foot (psf) for Q2 and Q3 remained the same at $2,621.

We are optimistic that this may be the transition from mass market to high'end homes. Even though additional buyer's stamp duty had been a drag on foreigner purchases, it seems that local liquidity 'ush buyers are stepping in to 'll their shoes. Among the property counters under coverage, SC Global (S$1.185, BUY), CapitaLand (S$3.17, BUY) and City Developments (S$11.59, BUY) will bene't.

Source: AmFraser