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Focusissue-Spore-living

I. Christianto
Contributor
Jakarta

More and more Indonesians buy S'pore apartments

Singapore is not only a favorite place for shopping, but it
has also become a favorite place to live either for business or
for study purposes.

Many Indonesians have even regarded the island nation as their
second home country.

The country's proximity, which is less than a two-hour flight
from Jakarta, is the main factor which lures many Indonesians to
stay or study there.

This explains why the demand from Indonesian citizens wanting
residential property in the neighboring country continues to
increase from year to year. At present, most Indonesians are
attracted to buy property there not for investment, but for
themselves or their children.

"The trend now shows that not only the upper class want to own
properties in Singapore, but also the middle class. The main
reason is for family accommodation, not solely for investment
anymore," Dina Pattiasina, director of residential property
consultant Colliers Jardin, told The Jakarta Post.

At present more and more Indonesians are sending their
children to study in Singapore at a younger age. "Previously,
many citizens of this country sent their children to undertake
college or university in Singapore, but now they want their
children to enroll at Singapore's elementary schools and even
kindergartens. Many prefer to stay and live in Singapore with the
parents, or at least their mothers."

As the interest to stay in Singapore grows, the choices of
residential areas has also undergone a major change. In the past,
Indonesians mostly bought properties in favored locations. But
residential properties in suburban locations have become one of
the choices.

"The top end people, with big budgets, usually buy properties
in popular areas which include districts nine, 10 and 11 in
central Singapore. But those with lower budgets prefer to buy in
suburban areas where properties are cheaper," she said.

She said property prices in prime areas might range between
S$1 million and S$3 million (Rp 17.5 billion), while the
properties in the suburban areas between S$600,000 (Rp 3.5
billion) and S$700,000.

It is interesting to find that some Indonesians are also
attracted to buy properties in Johor Bahru, Malaysia, if they
cannot afford Singapore property, according to Dina.

"Johor is about 40 minutes drive by car from Singapore and
property prices in Johor are cheaper than in Singapore," she
said, adding that Collier is currently marketing some Johor
projects in Indonesia.

Colliers recently started a promotion of the 9 Nasim Road and
the Cairn Hill apartments and got positive responses from
Indonesians.

"There were some 200 calls per day after we advertised
the properties. Compared to Australian properties, which we also
handled, there were only 50-100 calls per day asking for more
information," she said.

She added that Indonesian buyers commonly trusted the
Singapore property, in many aspects. "In addition, there's no
bureaucratic approval for loans up to 60 percent (of the total
property price). There is now a new regulation allowing
foreigners to get loans in Singapore dollars for the
installments," she said.

Associate director of property consultant Procon Indah, Deden
Sudarbo, said his company also got a positive response when
promoting and marketing Singapore properties in Indonesia.

"We find many Indonesians are very familiar with some
locations in Singapore. Some of them also want to go to see the
properties or projects firsthand," he said.

Both Dina and Deden agreed that most Indonesians
were generally interested in properties in prime locations as
such apartments allows ready access to the central business
districts, schools or hospitals. But when they have limited
budgets, they will also go to the secondary areas.

"Many Indonesians are interested in owning three-bedroom
apartments. Some parents are sending more than one child to study
in Singapore, and they usually visit them on weekends," Dina
said.

And, according to Deden, it is common for Indonesians to
gather or to travel in groups with the extended family, therefore
they mostly want three-bedroom units.

Deden said that Singapore property prices are currently
sinking as many expatriates left the country following the Sept.
11 attacks in the U.S. last year.

He said demand in the third quarter of 2001 was affected by
the increased repatriation of overseas staff which led to a
increase in the number of lease terminations.

He added rental rates dropped by 1.9 percent while selling
prices dropped by 10.4 percent in the period.

Singapore property price are lower at present, but Deden
estimated that the sector would recover again, although it would
take a while for the industry to reach the peak level of a few
years ago.

Collier also said the premium residential market, in the third
quarter 2001, suffered a two-way blow (from the seller's
standpoint) due to the consequences of the Sep. 11 tragedy. A
direct consequence, there were immediate reconfiguration in
expatriate movements in the world wherein many professionals were
either repatriated or reassigned to different locations.

The situation also took place in Singapore and this weakened
demand for property. "To add to (my) woes, was the country's weak
economic climate that resulted in business retrenchments and poor
consumer confidence."

Over the next 12 months, Colliers expects the rental market to
remain steady.

Though many Indonesians trust Singapore property companies far
more than they do Indonesian developers, one still needs to
prepare several things before deciding to buy.

There are some points advised by Colliers' Dina Pattiasina and
Procon's Deden Sudarbo:
* Check the locations, the prime areas are districts nine, 10,
and 11. Apartments in these districts will be easily resold at
any time.
* Choose an apartment which is located near public transportation
such as bus routes or an MRT (subway) station.
* Check the land titles; whether an apartment has the 99-year,
999-years or free hold title. Any title relates with the prices.
* Generally the government controls the payment system, but it
will be wise to check the off-plan projects and company profiles
of developers.
* Check the design of the apartment; do you really like the
style?
* Check the price; especially when there is a cheap used
apartment offered to you, is it an HDB (government housing) flat?
* Ask for a rental guarantee though many developers are now
reluctant to offer it.
* Find out about the legal and payment systems as well as
taxation, tax implications and how to get loans.