More Indonesians eager to buy S'pore properties

Tb. Arie Rukmantara, The Jakarta Post, Jakarta

Forty-year-old "Teddy", the owner of a public relations firm, anxiously looked at a scale model and pictures of Cairnhill Cresta high-end condominium, which is only five-minutes walk from Singapore's Orchard Road, during a property exhibition at Hotel Mulia in Senayan, Central Jakarta, recently.

Teddy said he was eager to buy one of the condominiums as an investment as well as a leisure destination for his family in the city-state.

"Owning a property in Singapore is a good thing," said the man, who also has two apartments in Jakarta and Surabaya.

Cairnhill Crest -- a 248-unit freehold property with an average price of S$1,520 (US$899) per square foot -- was developed by Cheung Kong Holdings Ltd. (CKH), a property flagship owned by Hong Kong billionaire Li Ka Shing.

As Indonesia's more affluent class are eyeing properties in Singapore, people like Teddy have become a target market for property developers in the neighboring country.

"It's becoming a trend now for rich Indonesians to own a property in Singapore. That's why we come here and offer them a chance either to own them for investment or as a residence," Justin Chiu, CKH executive director, told The Jakarta Post recently.

"As a rough comparison, from the 52 units of Cairnhill Crest that have been sold, at an average price of S$2.6 million per unit, 17 of them were bought by Indonesians," he said.

Therefore, Chiu was upbeat that his company's two-day showcase in Jakarta on Sept. 24 and Sept. 25 and in Surabaya on Oct. 1 and Oct. 2 would attract more Indonesians to purchase his latest property, which cost his company S$500 million in investment.

"Shortly after we arrived in Jakarta and talked to some Indonesians, 40 people have shown their intention to buy our property," he said, adding that most of them considering buying a property in Singapore as an investment.

"People won't buy fixed assets unless they have confidence in a government, a country and a system. They are willing to invest, to spend money only if they know what the outcome will be," he said.

"That's why people invest in Singapore because they can get all of that," he added.

The Singapore property market is becoming more attractive as Southeast Asia economy has recovered in the last few years.

Global real estate service firm Jones Lang LaSalle said in its report that there were seven factors why Indonesians buy properties in Singapore. The factors include stable political environment, market transparency, proximity to Indonesia, stable investment of total returns, familiarity with the Singapore property market's rules and regulations.

The company also said that few Indonesians buy properties in Singapore as a home for their children who study there and a second home for those who like to spend holidays in the city- state.

According to the report, which quoted the Singapore government's Real Estate Information System (REALIS) data, Indonesians are the second top foreign property buyers in Singapore after Malaysians from 1996 to present.

"Indonesian buyers who purchase apartments/condominiums in Singapore accounted for about 28 percent of total foreign purchases in the 10-year period between 1996 and September 2005," the company said.

From January to Sept. 22 this year, there were 437 properties in Singapore, categorized as caveats lodged, purchased by Indonesians. Prices of the properties ranged between S$800 and S$1,500 per square foot meter, Jones Lang LaSalle said.

Meanwhile, the number of caveats lodged by Indonesians peaked in 1999 with 739 units and hit the lowest in 1998 with 304.

"But we noted that there is an increase in buying interest of Indonesians in the last one or two years," the company said.