DESPITE woes in the United States’ housing market, there is still plenty of zing in Singapore’s red-hot property market.
Banks are still lending a lot of cash and mid-tier homes are still on offer at prices below 1996’s peak, says Mr Kwek Leng Beng, executive chairman of leading developers City Developments and Hong Leong Group. ‘I believe that there is still a lot of upside. At the mid-tier, prices are still less than 90 per cent of the peak in 1996,’ he told delegates yesterday at the Forbes Global CEO Conference.
His bullish view was echoed by his counterparts from other parts of Asia, including China, India and the Middle East.
They agreed that real estate remains hot property in their countries even as problems in the US have thrown global financial markets into a tizzy.
‘The (Shanghai) market is very strong because the inherent demand is just tremendous,’ said Hong Kong developer Shui On Group chief executive (CEO) Vincent Lo.
Residences next to the hip Xintiandi area are commanding prices of up to US$10,000 (S$15,236) per sq m, he said, adding that the waiting list for office space in the city stretches to 2010.
In the United Arab Emirates (UAE), property development is growing at unprecedented rates, said Dubai 9 Group managing director Hayan Merchant, noting that 26.5 per cent out of the world’s 130,000 cranes are in the UAE.
About 30 million sq ft of office space will be added in Dubai next year, he said, while another 42 million sq ft - equivalent to all the office space in downtown San Francisco - will come online the following year.
Singapore’s boom should continue even though psychological fears over the ongoing global credit crunch may take a little of the fizz out, said Mr Kwek. He said that lenders in Singapore are a little more cautious but there is still plenty of liquidity.
He added that historic prices over the past 10 years imply that the ‘right’ selling price for top-end properties should be about $3,600 per sq ft on average.
‘We are doing about $4,000. It’s about 10 per cent up, which is not alarming.’
The Government’s efforts to make Singapore a ‘global city’ that attracts foreigners to live here will help sustain the property bull run, he said.
He said that last weekend, he had met a group of foreigners, some of whom were developers, visiting Singapore for the first time. After four or five days, they started asking about buying high-end condominiums and office blocks.
‘All the real estate sectors - industrial, retail, commercial and residential - have kicked off. And this has to do with growing interest in Singapore as a global city.’
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