While we've to downgrade from big size HDB flats to smaller ones, foreigners have been snapping up our luxury condo:-
Singapore swings with luxury condos
By Miki Tanikawa International Herald Tribune
FRIDAY, JUNE 17, 2005
While Singapore plans to jazz up its international image by adding casinos and other fun features, it can count on at least one area that already has foreigners hooked: luxury condominiums.
The condo market in Singapore has had its peaks and valleys, but in recent years international buyers have been attracted to new developments with luxurious garden spaces that are adding style to what some critics have called a sterilized, industrial park-style landscape.
Non-Singaporeans bought 18 percent of the new condos here in 2004, according to the Urban Redevelopment Authority of Singapore, compared with 8 percent in 2001. Analysts said many of the foreign buyers had come from Indonesia, Malaysia and Taiwan, reflecting their strong economies and stock markets.
"Indonesians have often been the largest group of buyers," said Nicolas Mak, research director in Singapore for Chesterton International, a British property consultancy. "There is always new wealth being created there."
To the wealthy and the financially mobile in Southeast Asia, this island nation of 3.2 million - and 1 million foreign residents - has the cachet, the quality and the public safety features that are the envy of the region.
"Many Indonesians, when they become rich, they come to Singapore to buy condominiums," said Inez Chow, who runs a Singapore equity fund at Global Asset Management in Hong Kong. "It's similar to mainland Chinese who strike it rich in the mainland and come to Hong Kong to buy apartments."
In Singapore, the label "condominium" means a luxury apartment-style property, while "apartment houses" refers to midmarket residential units built by the government.
Ico Sianandar, an Indonesian who has lived in Singapore for five years, says there are often quality issues with properties in her homeland.
"You are not sure if the foundation is strong enough," Sianandar said. "Let's say you know how many kilos and tons of materials you have to put in. But they only put half of it. And imagine how you feel living on the 20th floor."
Sianandar lives in Thompson 800, a condominium complex marketed by Cheung Kong Property in District 11. The choice locations are districts 9, 10, and 11, which are named after the old postal code and located near the central shopping street of Orchard Road.
The Loft on Nissam Hill, off the Tanglin Road in District 10, is an example of chic modern design. This complex, developed by CapitaLand, comprises five blocks of elegant low-rise apartments and are linked by terraces, bridges and a wading pool.
Sianandar also owns and manages rentals at the Botanic on Lloyd, near Orchard, and manages rentals at a number of other luxury condos, all owned by family members in Indonesia.
While some owners use their properties for rental income, many keep them for personal visits to see friends, shop or visit the family doctor. Moreover, Sianandar said, "lots of Indonesians, they want their kids to have better education so they send their kids to primary school in Singapore." The children usually stay with guardians; but with Singapore's universities becoming more open to international students, parents often buy condos for their older offspring.
The square-foot cost for condos in the select districts average 1,300 to 1,600 Singapore dollars, or about $775 to about $955. Numbers are showing a mild increase, with the average condo prices having risen by about 0.9 percent in 2004, outpacing the rental price growth of 0.2 percent, said Mak, the Chesterton research director.
"For the last seven years or more, property yield has been around the region of 2.5 to 3.5 percent and maybe 4 percent - at the highest, and it has never really gone outside this range," he said, adding that the current yield is at the high end of the range.
The low condo prices look more attractive still to regional buyers, who see an opportunity for arbitrage within the region.
"They see Asia having great potential where prices are significantly lower now than before," said Doris Boo, senior manager of marketing and communication at Colliers International in Singapore. "At the same time, Hong Kong property prices are seeing recovery to boom. Singapore may follow."
Developers have similar perspectives.
"Singapore is going through an interesting period where foreigners see more value than the local people," said Chia Boon Kuah, deputy chief operating officer and director of sales and regional marketing at Far East Organization, a leading Singapore developer.
He has reason to believe that. About 60 percent of his company's latest project, Soho Central, was sold to foreigners, including Indonesians, Malaysians and Hong Kong people, he said. This building, with 227 units, is to rise above the Clarke Quay subway station, overlooking the river, by 2007.
"It's the first of its kind to get approval for dual use both for office and home," Chia said.
In the past, the development authorities have frowned on the idea of residences in what is otherwise an office building. But for foreign business people, typically in the fields of consulting, import-export and architectural design, their Soho studio will serve as their Singapore office and an overnight accommodation, Chia said.