Wealthy Chinese millionaires, in what is likely a strategy to protect their assets in a “safe haven”, are buying up luxury apartments in Singapore worth millions. Sales have hit an 11-year high, according to the Singapore Straits Times and property consultants OrangeTee & Tie.

The currency exchange rates of the Chinese yuan to the US dollar has crept up to its current 7.1 from a low of about 6.1 five years ago. The Singapore dollar has hovered steadily at about 1.4 against the US dollar over the same time period. Investors have long viewed Singapore as an island of stability that attracts the super-rich from its less-developed South-east Asian neighbors, as well as multimillionaires from mainland China.

The wealthy investors also fear that the ongoing trade war between China and the United States will further devalue the yuan.

A look at the numbers show the following:

  • Sales of condominium units worth $10 million and more numbered 68 in the first eight months of 2019, the highest since 2008.
  • Sales of apartments in the $5 million and more range numbered 76 from January to August by Chinese citizens compared to 75 purchased by Singaporeans.  
  • Sales of such apartments also exceeded the numbers racked up for each full year from 2011 to 2018, the consultants' analysis of transaction data shows.
  • The units are not small, the largest penthouse located in the South Beach Residences in Beach Road measures over 6, 700 square feet.

Aside from the trade war, some buyers are looking to replace the troubled city of Hong Kong with Singapore as a place to hold their money. Hong Kong’s economy has been hurt by protests over the past several months by the pro-democracy segment of the population. If the local Hong Kong government fails to stop the unrest soon, the fear is that more chaos will erupt if Beijing deploys the People’s Liberation Army to “solve” the problem.

The real estate market was so hot in Singapore that the authorities recently enacted a 5 percent increase to 20 percent on the stamp duty that is applied to sales to foreigners. But this has not slowed the demand, according to Leong Boon Hoe, chief operating officer of high-end realtor List Sotheby's International Realty, who said, "We do see that even though the stamp duties have increased... we are still seeing people putting big money on these apartments, predominantly it is more for stability than anything else. They are parking their money here - they know that the Singdollar won't depreciate overnight."

Singapore General view of apartment blocks consisting of private and public housing, in Singapore, Sept. 27, 2018. Photo: REUTERS/Kevin Lam