23 April 2024, Singapore – PropNex Realty, Singapore's largest real estate agency, has stepped up on efforts to expand its international property sales business, amidst a rising interest among Singaporeans in exploring investment opportunities abroad, according to feedback from many of the firm's real estate agents. With Singapore citizens currently facing a 20% additional buyer's stamp duty (ABSD) rate on their second residential property purchase in Singapore, some of them are looking at deploying capital overseas.

Ismail Gafoor, CEO and Executive Chairman of PropNex, said, "From our observations, there is a healthy interest among local buyers to invest in properties, and the prevailing ABSD measure is a push factor for them to evaluate options in overseas markets. To this end, PropNex has redoubled its efforts to further grow its international project offerings and to deepen market engagement by educating consumers about the opportunities and risks when investing overseas.

"Being a trusted real estate market leader in Singapore, consumers would expect PropNex to do the necessary due diligence, and to thoroughly assess all overseas projects that we are bringing to buyers. And that is exactly what we have done, as our team led by Head of International Sales, Chua Shir Yee – an experienced real estate professional who has joined PropNex recently – analyses each project, checks on the track record of the foreign developers, as well as reviews the long-term capital appreciation potential of the projects to make sure that they are suitable for buyers in Singapore," Mr Gafoor added.

The PropNex International Sales team handles projects in various countries, with a particular focus on established markets such as the UK, Australia, New Zealand and Japan which are seen as relatively safer investment destinations, owing to real estate market transparency, stable environment and attractive yields. Furthermore, some of these countries are seen as preferred destinations for people who wish to study abroad or to relocate.

In the past week, PropNex has garnered healthy sales for Waterhouse Gardens in Dutton Street in Manchester, UK. It is a mixed-use regeneration project that will be built on the site of the former Boddingtons Brewery; the 999-year leasehold development is within walking distance to The Manchester College, AO Arena, and the Victoria Train Station, and a short ride to the University of Manchester and the Manchester Airport.

PropNex held a project showcase for Waterhouse Gardens from 17 April, and saw 15 units being booked (as at 22 April) by Singaporean buyers. In addition, there are more prospective buyers who are interested in the project and are doing their sums before committing to a purchase. Hence, more transactions could be expected in the coming weeks.

Chua Shir Yee, Head of International Sales at PropNex, said, "Waterhouse Gardens is an exciting project with 556 residential units and some 31,000 sq ft of commercial and retail space. Being situated close to the Great Ducie Street site, which is undergoing a 20-year regeneration, we expect Waterhouse Gardens to be among the first projects to enjoy an early-mover advantage in a revitalised precinct.

"Apart from not having to pay ABSD on the investment property, the other factors that appeal to buyers include its strong project attributes, the competitive pricing of units, as well as the favourable financing arrangement where they pay a 25% downpayment on the purchase price upfront, with the remaining 75% payable upon project completion. This enables buyers to better manage their cashflow, and they could potentially offset their monthly loan repayments with rental income later on, when the unit is leased out after the project is completed. Based on our market analysis, the project could possibly fetch a rental yield of between 6% and 7%, which looks attractive," Ms Chua commented.

Furthermore, the 75% remaining payment that is deferred till after project completion represents a higher loan-to-value (LTV) limit, particularly for buyers with an existing home loan looking to invest in a second property. In Singapore, the LTV limit for borrowers with an existing home loan is either 45% or 25%, depending on the loan tenure and borrower's age.

Prices for 1-bedroom units – which are fully sold - at Waterhouse Gardens start from £241,000 (equivalent to about S$405,000 as at 23 April), while prices of the 2-bedders are upwards of £383,000 (about S$644,000 as at 23 April). Such pricing may be considered as more budget-friendly for some investors, given that new non-landed private homes (ex. EC) in Singapore that are sized 700 to 800 sq ft were transacted at an average price of about $1.78 million in Q1 2024, as per URA Realis caveat data.

Beyond Waterhouse Gardens, PropNex is also partnering with global real estate company, JLL to bring more UK projects, including One Thames Quay in London's Canary Wharf - which is due to launch on 11/12 May 2024 - to Singapore buyers.

Mr Gafoor noted, "Given the growing desire and curiosity among investors in exploring overseas property markets, we want to provide them with viable buying opportunities, and to help them assess what might be right for them, based on their budget and investment objectives – be it as part of an asset diversification strategy, or perhaps to generate passive income. As with all investments, there are risks involved and we will advise buyers accordingly, so that they can make informed investment decisions."

Artist's impression of Waterhouse Gardens (Image credit: Salboy)