Bank of mum and dad: Study shows how a growing number of Singaporeans are paying for their homes

Singapore is known as one of the world’s commercial and financial powerhouses. Less high-profile is its status as a thriving outpost of the bank of mum and dad.

When Savills Singapore issued its latest private-property price forecasts last month, bumping up the prediction from 12-15 per cent to a whopping 15-20 per cent, the agency backed up its stats with an intriguing observation.

Savills Singapore research and consultancy senior director, Alan Cheong, says the sharp recovery in the sovereign city-state’s residential property market is because of more than GDP growth.   

“Visits to show flats [off-the-plan apartment display suites] leave a discerning observer with the impression that an increasing number of buyers at new launches are funded in part by their parents’ (ie. baby boomers’) money,” Cheong says.

Price predictions, he argues, should take into account historical economic performance, as well as current and future growth rates.

Gramercy Park residence is for sale for around $7.002 million. Photo: Supplied

List Sotheby’s International Realty isn’t fussed which generation is paying for a three-bed apartment in the Gramercy Park building on Grange Road in Singapore’s District 10.

On the market for $S7.009 million (about $7.002 million), it has more than 200 square metres of internal space, including three full bathrooms.

Current market

Private property growth is at an eight-year high. Photo: Wong Kin Leong / Singapore Tourism Board

The Savills report noted private-property price growth hit an eight-year high during the first quarter of 2018. New off-the-plan apartment sales were driving much of the growth.

Prime residential prices in Singapore have risen 5.8 per cent, year on year, according to the Knight Frank Prime Global Cities Index for Q1 2018.

Can Australians buy in?

Australians need to be wary of restrictions on foreign buyers. Photo: Singapore Tourism Board

Australians can buy apartments, but there are restrictions on foreigners buying “landed property”, including terraces and free-standing houses, with the exception of expat hot-spot Sentosa Cove.

The agent listing the Gramercy Park unit, List Sotheby’s International Realty’s Edwin Woon, says a 20-per-cent deposit is usually needed for a bank loan in Singapore. 

“Foreigners are subject to 15 per cent additional buyer’s stamp duty in addition to the four per cent stamp duty all buyers … have to pay,” Woon says. Sellers offloading property within three years of purchase will also face stamp duty.

What you can buy for …

Photo: Sotheby’s International Realty

$60 million

A handsome five-bedroom home with pool at Queen Astrid Park. The two-storey residence is described as a “modern re-interpretation” of a traditional colonial bungalow.

Photo: Sotheby’s International Realty

$19.9 million

A contemporary four-bedroom home in a residential marina resort development on the eastern coast of Sentosa island. The front faces the waterway, while the rear faces the sea.

Photo: Sotheby’s International Realty

$4.5 million

A four-bedroom apartment with study in the Concourse Skyline building. Located in the up-and-coming Ophir-Rochor district, the home offers magnificent bay views.