Singapore property lures big buyers

Singapore property lures big buyers

Bernice Han, Agence France-Presse/Singapore

Singapore's tallest condominium project will only be ready in
2009 at the earliest but that has not stopped Asian buyers from
joining the rush for one of the most prestigious addresses in
town.

At least 30 percent of the buyers at the soft launch of Tower
2 of the Sail at Marina Bay were from the region, especially
China, Hong Kong, Indonesia, Taiwan and India, according to
developer City Developments Limited (CDL).

Fewer than 30 apartments remain unsold in the 430-unit Tower 2
where the price of a one-bedroom unit measuring 57-72 square
meters can set a buyer back by at least S$620,000 (US$366,864).

But even that is seen as a bargain by some regional investors.

Property analysts said the recovery in property prices here
has lagged that of neighboring economies by 40-60 percent since
the region was hit by the Severe Acute Respiratory Syndrome
(SARS) health epidemic in 2003.

SARS shook up the travel industry and slowed down the
economies of much of East Asia, including Singapore, six years
after a regional financial crisis also hit the property sector.

"Our immediate neighbors have already run up so much (since
SARS)," said Leslie Chua, the Singapore-based head of regional
real estate intelligence for Jones Lang LaSalle.

"If you look at places like Hong Kong, Bangkok and Kuala
Lumpur, it's been trading very well.

"With all those markets running up so much, Singapore looks
attractive."

According to Chua's calculations, property prices in Hong Kong
have shot up by 60 percent since the SARS outbreak, while in
Kuala Lumpur, the increase is about 40 percent.

Prices in Shanghai, increasingly on the radar screens of
investors, are up also by 40 percent, Chua said.

By comparison, prices in Singapore rose by less than 10
percent over the same period, he said.

Apart from the attractive valuations, foreign buyers are also
attracted to Singapore's status as a stable country and for those
planning to send their kids to schools here, the education
system, rated as one of the best in Asia, is a plus factor,
analysts said.

"We are perceived as a safe market so we will attract
investors who are interested to put their money here," said
Nicholas Mak, head of consultancy and research at Knight Frank
property consultancy.

"There are some markets where it is easy to buy the property
but difficult to exit," he said.

Mak said many Asian buyers are also planning to send their
children here to study, so investing in a piece of property would
be a useful investment.

A recent Jones Lang LaSalle study said more than half the
buyers of new residential projects in the September quarter were
foreigners who went mostly for the high-end units.

According to the study, prices of top-tier apartments at the
end of June were still about 32 percent below their peak just
before the 1997 Asian financial crisis.

"Singapore's luxury residential prices have remained stable in
the past few years, lagging behind other major Asian cities like
Shanghai, Beijing, Hong Kong and Bangkok," the study said.

Things have begun to stir this year and share prices of
property companies in Singapore have enjoyed a mini-boom after
the government announced in July new measures to boost the
market, including a relaxation of certain rules to allow foreign
ownership.

The share price of Keppel Land, for example, is up almost 40
percent since the announcement of the government's pro-property
measures while Wing Tai Holdings is 23 percent higher and CDL's
share price is up almost 1.7 percent.

Prices of upmarket apartments and condominiums rose 4.1
percent in the July-September period to an average S$1,020 per
square foot. This is double the 2.1 percent rise in the second
quarter.

Preliminary government figures showed housing prices rose 1.1
percent in the third quarter, the biggest quarterly increase in
five years.

So overwhelming is the response to the CDL project, made up of
two sail-shaped towers with the taller 70-story Tower 1 rising to
245 meters, that CDL is considering canceling the public launch
of the 63-story Tower 2 block.

Last year's sales launch of the 70-story Tower 1 was equally
popular with foreign investors making up 40 percent of the
buyers, according to CDL, which is the joint developer with AIG
Global Real Estate Investment Corp.