Growing number of Koreans buying homes in S’pore

Growing number of Koreans buying homes in S’pore
Monday, April 16, 2007

Most are working here or have children who are studying here

More Koreans are looking for private residential property in Singapore. And though the number who have bought is small, it is growing.

Most buy property to live in while they work here. Some buy for their children who are studying here.

Those working for Korean companies in Singapore usually stay three to five years and tend to rent rather than buy. But those working for multinational companies tend to buy, as do mothers staying with children who are studying here.

The Korean government recently introduced tough restrictions to curb property speculation at home, which has led to plenty of ‘floating money’ going abroad.

Although the US is the preferred destination for this money, the popularity of South-east Asia, especially Singapore, is growing.

Singapore appeals as a property investment location because of the consistency and stability of its economy, policies and taxes. It also has massive development plans, so investors reckon they can expect profits.

According to The Bank of Korea, last year Koreans bought 1,268 personal properties totalling US$510 million abroad. For residential properties the amount totals US$270 million and for investment US$240 million. The average price of residential property was US$440,000 and for investment property it was US$370,000.

Most of them who bought property abroad are in their 40s (46 per cent) and 21 per cent are in their 30s while 19 per cent are in their 50s.

According to Kim Han Suk of property company CB Richard Ellis, Koreans see Singapore as a second home because the language is English, the schools are good and the culture is Asian.

The Korean government has a US$3 million cap on money sent overseas to buy investment property. But since buyers can get loans abroad, overall investment in property can far exceed US$3 million.

In fact, there is no price cap at all if a property is bought to live in. So a Korean can buy the most expensive house in Singapore to stay in - provided they have the money. As far as borrowing goes, Singapore’s low interest rates are a big help.

Korean real estate agent Debora Hwang told BT: ‘I’ve never seen a non-resident buy residential property only for investment. They may have to stay in Singapore for a while, so they just choose to buy a house to live in, rather than rent one.’

Korean mums staying with their children tend to buy houses near foreign schools. They like the East Coast, Bishan and River Valley, but still they prefer prime districts. Their budgets are usually around $1 million.

According to Knight Frank, last year 163 Koreans bought houses and top locations are Bukit Timah, Orchard, Bedok.

Another Korean real estate agent, Kang Sang Chul, said: ‘Middle-income families’ budgets are around $1 million and high-income families buy $3 million-plus condominiums. Most Koreans prefer freehold property, but some don’t mind 999-year leasehold.’

They often go for three-bedroom flats - wives tend to be the decision-makers.

Mr Kang said: ‘Real estate prices in Korea have recently moved up so high that people don’t expect any more profit, so they sell their second home in Korea to buy a house in Singapore.’

Source: The Business Times, 16 April 2007