More Indonesians buying luxurious houses in S'pore

More Indonesians buying luxurious houses in S'pore

Fitri Wulandari
The Jakarta Post
Singapore

The Singapore property market is improving, spurred by growing
demand for high-end property from foreign buyers, including
wealthy Indonesians, a developer said.

Justin Taylor, Chief Executive Officer of Singapore-based
McRidge Investment Pte. Ltd. said more Indonesians were now
buying luxurious houses or "good-class" bungalows in Singapore
either as second homes or for investment purposes.

"There has been a lot of interest in the property market
because a lot of Indonesians are looking for houses to stay in,"
Taylor said recently.

McRidge is developing two good-class bungalow projects in a
plush area of District 10, at the heart of Singapore.

Aside from Indonesians, other foreign buyers include those
from mainland China and Hong Kong.

The increasing number of foreigners buying houses in Singapore
is partly driven by the popularity of the city island as the
center of education and business in Asia.

The close proximity between Indonesia and Singapore had
prompted many Indonesians to move their families there while
keeping their businesses in Indonesia, Taylor said.

"We see a lot of situations where the mother stays in
Singapore where her children study, while the father lives in
Indonesia and goes back and forth to Singapore," Taylor said.

Changing lifestyles among wealthy Asians are also driving up
sales of luxury houses and quality bungalows.

Data from the Singapore government shows there are some 2,500
units of property categorized as good-class bungalows.

Tight regulation from the Singaporean government, has limited
the numbers of houses and meant few are put on the market, which
further pushes up prices.

Last year, there were 54 units of good-class bungalows
changing hands, a 35 percent increase from 40 units in 2002.

The highest price paid for a Singapore residence for the last
12 months was a property in an exclusive area on Nassim road,
which was sold to an Indonesian for over S$10 million (about Rp
50 billion).

Another reason for the interest in buying property in
Singapore, Taylor said, was because it promised a high investment
return with low taxes, favorable ownership laws and attractive
government incentives.
The Singaporean government only charges property buyers 3 percent
for government tax.

In comparison, buying an apartment in Indonesia would be
subject to a 10 percent income tax, 20 percent luxury tax and 5
percent conveyance tax.

Non-Singaporean buyers of Singapore property can also resell
their properties without being subject to a capital gains tax.
In Australia, reselling property by non-Australians would be
subject to a 30 percent capital gains tax, Taylor said.

According to Taylor, the minimum rental price for a luxurious
property could be as high as S$30,000 a month, a lucrative
investment return.

He said the high interest from foreigners of buying property
in Singapore had improved confidence in the country's market,
which had been slowing down during the past couple of years due
to the regional economic crisis.

Economic recovery in Asian countries had also helped push
property sales on the island.

Many Singaporean developers were now offering their property
projects to the Indonesian market first before offering them to
Singaporeans, Taylor said. This was illustrated in the increasing
exhibitions of Singapore property projects in major cities in
Indonesia.