Source : The Straits Times, July 8, 2009
A PROPOSED change to income tax laws will make clearer to property sellers when they will be taxed on their profits.
Anyone who sells only one property in any four-year period will not be taxed on his profit, according to a proposed amendment to the Income Tax Act.
But if he sells another property within four years of the first sale, the profit from the second sale may be taxable.
If the proposal becomes law, it will provide certainty for owners who now cannot be sure if the taxman will come calling after they sell.
Under existing rules, an individual does not pay tax on gains made from selling a property unless the taxman decides that he is trader - someone who buys and sells multiple properties within a short time span. And there is no way for the seller to know in advance if he might be deemed a trader.
The new way of taxing property profits is one of many changes listed in a draft Income Tax (Amendment) Bill 2009 put up for public feedback last month by the Finance Ministry. If implemented, the change will take effect from January.
A ministry spokesman told The Straits Times on Tuesday that the proposed change aims to provide certainty of non-taxation to individuals who own property.
Once it takes effect, the individual who sells a property for a profit can be sure that his gains will not be taxed - provided he had not sold any other property in the previous four years.
If he sold other properties within that period, the spokesman said, the Inland Revenue Authority of Singapore (Iras) will decide whether he should be taxed, 'based on the facts and circumstances, no different from the present tax treatment'.
The draft Bill can be read at the Finance Ministry website www.mof.gov.sg and the public has up to next Tuesday to give feedback. The Bill is expected to go before Parliament later in the year.
Read the full story in Wednesday's edition of The Straits Times
Showing posts with label Owners/Seller's Guide. Show all posts
Showing posts with label Owners/Seller's Guide. Show all posts
Thursday, July 9, 2009
Sunday, October 14, 2007
I've Come Into A Fortune But Am Clueless About Estate Duty
Source : The Sunday Times, Oct 14, 2007
Q. I HAVE inherited $15 million, and the money is currently deposited in a British bank.
I am the beneficiary of funds from a deceased friend, who was from Mexico. If I transfer the money from Britain to Singapore, am I subject to an estate duty or a tax that is payable?
A. AS A rule, an inheritance is in the nature of a capital, so transferring it to Singapore should not attract an income tax.
A Singapore citizen will generally be domiciled in Singapore, and even more likely so if he was born here.
If Singapore is your domicile, your assets here and abroad - apart from immovable properties overseas, which are not subject to Singapore law - are liable to an estate duty here when you pass on.
The first $600,000 worth of movable properties and the first $9 million worth of residential properties are exempt from an estate duty.
Beyond these thresholds, however, the duty is 5 per cent on anything up to $12 million and then 10 per cent in excess of that amount.
Allowing for an exemption on the first $600,000, the duty on $15 million in cash - assets in movable form - will be $840,000.
It may be that $15 million is more than you can use in your lifetime, in which case you may wish to consider planning your estate.
Since the law exempts from duty up to $9 million worth of Singapore residential property, there will be less duty on your estate if you invest some of the funds in a residential property in Singapore.
As well, funds that you 'settle' in a trust, so that you personally no longer benefit from them, are not dutiable after five years.
A Singapore permanent resident or, more generally, a person with a right and an evident intention to return to a home country, may not be domiciled in Singapore.
If you happen not to have Singapore as your domicile, then there will be no duty on your estate - at least in this country - save for any immovable property in Singapore, which is subject to Singapore law regardless of your domicile.
In that case, there is no limit to the cash or other movables your beneficiaries can inherit from you free of Singapore estate duty.
Finally, it is worth noting that an estate duty has become a very minor part of revenue for many economies.
There is also no longer any estate duty in Hong Kong and Malaysia. It is possible that Singapore will follow.
Advice provided By
KhattarWong
Leon Kwong Wing Co-Head, Tax Department
Harleen Kaur Associate, Tax Department
Advice provided in this column is not meant as a substitute for comprehensive professional advice. E-mail questions to lorna@sph.com.sg
Q. I HAVE inherited $15 million, and the money is currently deposited in a British bank.
I am the beneficiary of funds from a deceased friend, who was from Mexico. If I transfer the money from Britain to Singapore, am I subject to an estate duty or a tax that is payable?
A. AS A rule, an inheritance is in the nature of a capital, so transferring it to Singapore should not attract an income tax.
A Singapore citizen will generally be domiciled in Singapore, and even more likely so if he was born here.
If Singapore is your domicile, your assets here and abroad - apart from immovable properties overseas, which are not subject to Singapore law - are liable to an estate duty here when you pass on.
The first $600,000 worth of movable properties and the first $9 million worth of residential properties are exempt from an estate duty.
Beyond these thresholds, however, the duty is 5 per cent on anything up to $12 million and then 10 per cent in excess of that amount.
Allowing for an exemption on the first $600,000, the duty on $15 million in cash - assets in movable form - will be $840,000.
It may be that $15 million is more than you can use in your lifetime, in which case you may wish to consider planning your estate.
Since the law exempts from duty up to $9 million worth of Singapore residential property, there will be less duty on your estate if you invest some of the funds in a residential property in Singapore.
As well, funds that you 'settle' in a trust, so that you personally no longer benefit from them, are not dutiable after five years.
A Singapore permanent resident or, more generally, a person with a right and an evident intention to return to a home country, may not be domiciled in Singapore.
If you happen not to have Singapore as your domicile, then there will be no duty on your estate - at least in this country - save for any immovable property in Singapore, which is subject to Singapore law regardless of your domicile.
In that case, there is no limit to the cash or other movables your beneficiaries can inherit from you free of Singapore estate duty.
Finally, it is worth noting that an estate duty has become a very minor part of revenue for many economies.
There is also no longer any estate duty in Hong Kong and Malaysia. It is possible that Singapore will follow.
Advice provided By
KhattarWong
Leon Kwong Wing Co-Head, Tax Department
Harleen Kaur Associate, Tax DepartmentAdvice provided in this column is not meant as a substitute for comprehensive professional advice. E-mail questions to lorna@sph.com.sg
Saturday, September 29, 2007
Mass Market Property Sales Started Recovering A Year Ago: CBRE
Source : Channel NewsAsia, 28 September 2007
The recovery in mass market property sales in Singapore started as far back as a year ago, according to consultant CB Richard Ellis (CBRE).
It said this debunks the notion that the recovery for mass market projects has trailed the high-end market until the last few months.
But even with sales rising for some 12 months, CBRE's research has found that prices only started edging up in the last six months.
The study is based on an analysis of the new units launched last year and the corresponding take-up volumes.
It found that 68 per cent of the new projects launched in the West Coast last year had actually been taken up.
Likewise, take-up rates for districts 15 and 16 were about 90 per cent.
Home buyers bought about 74 percent of projects in the prime districts of 9 and 10, and 96 per cent of projects in the Downtown area and Sentosa Cove.
CBRE said the strong sales of non-prime projects suggest that upgraders and private homeowners had bought properties, in anticipation of a rise in prices. - CNA/ch
The recovery in mass market property sales in Singapore started as far back as a year ago, according to consultant CB Richard Ellis (CBRE).It said this debunks the notion that the recovery for mass market projects has trailed the high-end market until the last few months.
But even with sales rising for some 12 months, CBRE's research has found that prices only started edging up in the last six months.
The study is based on an analysis of the new units launched last year and the corresponding take-up volumes.
It found that 68 per cent of the new projects launched in the West Coast last year had actually been taken up.
Likewise, take-up rates for districts 15 and 16 were about 90 per cent.
Home buyers bought about 74 percent of projects in the prime districts of 9 and 10, and 96 per cent of projects in the Downtown area and Sentosa Cove.
CBRE said the strong sales of non-prime projects suggest that upgraders and private homeowners had bought properties, in anticipation of a rise in prices. - CNA/ch
Saturday, September 22, 2007
The Sheikh Shake-Up
Source : Weekend TODAY, September 22, 2007
Mid-East nations in race to snatch world’s prized assets
FLUSH with cash from burgeoning oil revenues and a regional economic boom, Middle Eastern governments are buying overseas assets at record rates.
This week alone, several Middle East governments made big buys around the globe. Abu Dhabi paid US$1.35 billion ($2.03 billion) for 7.5 per cent of Washington-based Carlyle Group — the world’s second-biggest private equity firm.
Meanwhile, Qatar bought 20 per cent of London Stock Exchange Group in a deal worth about US$1.2 billion late Thursday, the same day neighbouring Dubai agreed to acquire a stake in the United Kingdom bourse from Nasdaq stock market.
Qatar also won approval to examine the financial records of J Sainsbury, the second-largest UK supermarket chain.
All told, the deals are worth US$25 billion, according to Bloomberg data.
The pace of international investments by Gulf states, which earn US$1.2 billion a day from oil exports, is quickening as they seek to diversify beyond energy.
The nations have already spent a record US$68 billion on overseas acquisitions this year, showed the Bloomberg data, compared with US$30.8 billion in all of last year.
Acquisitions in the United States and Britain account for slightly more than half of the total this year.
Said Dubai’s Gulf Research Centre’s chief economist Eckart Woertz: “They are not just putting their money in bank deposits and government bonds any more … They are after strategic assets.”
There is an emerging group of Arab states whose leaders are generally friendlier to the West and are eager to make a mark in global finance, noted the Wall Street Journal in its report on Friday.
“The deep pools of capital in the Middle East are increasingly affecting all aspects of global financial markets, both private and public,” financial consultant Monte Brem, who advises Middle Eastern institutions on their international investments, told the Journal.
Middle East investors are also keen on undervalued brand-name businesses, observers said. “Many assume that cash-rich Middle Eastern investors will spend money easily, but this is not the case as they are very savvy in making financial and investment decisions,” said Mr Mohd Hasnul Mohd Ismail, who manages a Malaysianbased asset investment firm.
Observers also note that the Middle East appears to have become more sophisticated in managing backlash from highprofile deals, following last year’s painful lesson in which a Dubai-controlled company sold the US port operations of a British company it had acquired.
The deal fell through after US politicians argued that selling the port was a security risk, post Sept 11 attacks.
This time round, Dubai is taking all measures to ensure that there will be no backlash from its interest in seeking a minority stake in Nasdaq.
It has asked the Bush administration to vet the deal upfront for potential national-
security issues and hired a team of Washington lobbyists and strategists to reach out to US officials a day before the proposed deal became public.
Meanwhile, the race to shop for prize deals for stock exchanges worldwide is shaping up to be a competition between Dubai and Qatar, who are both vying to be the Gulf’s financial hub.
Just 10 years ago, when Dubai was not much more than a port with a single business thoroughfare in the desert, such ambitions would have been dismissed as laughable.
This is the same for Qatar. — AGENCIES
Mid-East nations in race to snatch world’s prized assets
FLUSH with cash from burgeoning oil revenues and a regional economic boom, Middle Eastern governments are buying overseas assets at record rates.
This week alone, several Middle East governments made big buys around the globe. Abu Dhabi paid US$1.35 billion ($2.03 billion) for 7.5 per cent of Washington-based Carlyle Group — the world’s second-biggest private equity firm.
Meanwhile, Qatar bought 20 per cent of London Stock Exchange Group in a deal worth about US$1.2 billion late Thursday, the same day neighbouring Dubai agreed to acquire a stake in the United Kingdom bourse from Nasdaq stock market.
Qatar also won approval to examine the financial records of J Sainsbury, the second-largest UK supermarket chain.
All told, the deals are worth US$25 billion, according to Bloomberg data.
The pace of international investments by Gulf states, which earn US$1.2 billion a day from oil exports, is quickening as they seek to diversify beyond energy.
The nations have already spent a record US$68 billion on overseas acquisitions this year, showed the Bloomberg data, compared with US$30.8 billion in all of last year.
Acquisitions in the United States and Britain account for slightly more than half of the total this year.
Said Dubai’s Gulf Research Centre’s chief economist Eckart Woertz: “They are not just putting their money in bank deposits and government bonds any more … They are after strategic assets.”
There is an emerging group of Arab states whose leaders are generally friendlier to the West and are eager to make a mark in global finance, noted the Wall Street Journal in its report on Friday.
“The deep pools of capital in the Middle East are increasingly affecting all aspects of global financial markets, both private and public,” financial consultant Monte Brem, who advises Middle Eastern institutions on their international investments, told the Journal.
Middle East investors are also keen on undervalued brand-name businesses, observers said. “Many assume that cash-rich Middle Eastern investors will spend money easily, but this is not the case as they are very savvy in making financial and investment decisions,” said Mr Mohd Hasnul Mohd Ismail, who manages a Malaysianbased asset investment firm.
Observers also note that the Middle East appears to have become more sophisticated in managing backlash from highprofile deals, following last year’s painful lesson in which a Dubai-controlled company sold the US port operations of a British company it had acquired.
The deal fell through after US politicians argued that selling the port was a security risk, post Sept 11 attacks.
This time round, Dubai is taking all measures to ensure that there will be no backlash from its interest in seeking a minority stake in Nasdaq.
It has asked the Bush administration to vet the deal upfront for potential national-
security issues and hired a team of Washington lobbyists and strategists to reach out to US officials a day before the proposed deal became public.
Meanwhile, the race to shop for prize deals for stock exchanges worldwide is shaping up to be a competition between Dubai and Qatar, who are both vying to be the Gulf’s financial hub.
Just 10 years ago, when Dubai was not much more than a port with a single business thoroughfare in the desert, such ambitions would have been dismissed as laughable.
This is the same for Qatar. — AGENCIES
Wednesday, September 19, 2007
Locals Dwarf Home-Buying Spree By Foreigners In Q2
Source : The Business Times, September 19, 2007
Koreans become major players; foreign buying hits record 2,864 units
(SINGAPORE) Foreigners, including permanent residents, bought a record 2,864 private homes in Singapore in the second quarter, up 34 per cent from the preceding quarter and more than twice the 1,221 private homes that they invested in during the same period a year ago.
But even this brisk buying was dwarfed by Singaporeans, who accounted for 68 per cent of caveats lodged for private home purchases in Q2 this year, up from 65 per cent in Q1.
In contrast, foreign buyers' and PRs' share of total private home purchases slipped to 25 per cent in Q2 2007, from 27 per cent in Q1 2007.
Companies, meanwhile, accounted for the remaining 7 per cent of private home buyers in Q2 2007, reflecting strong collective sales as well as acquisitions by numerous funds investing in residential property, according to DTZ Debenham Tie Leung's analysis of caveats captured by Urban Redevelopment Authority's Realis system.
DTZ's report also showed Koreans are growing in prominence and accounted for 6 per cent of foreign buyers in Q2, their highest share ever. Koreans' share among foreign buyers has been growing steadily over the past year.
The figure used to be around one to 2 per cent in 2004 and 2005, but rose to 2 to 4 per cent in various quarters last year. Koreans hardly featured as buyers in the 1990s.
The 185 private homes Koreans bought here during April to June 2007 reflected a 76 per cent quarter-on-quarter increase.
Growing purchases by Koreans reflect not only acquisitions by Korean nationals residing here, some drawn to Singapore by their children's education, but also efforts by major Singapore developers to market their projects in Korea, DTZ executive director Ong Choon Fah observed.
Indonesians and Malaysians continued to be the largest groups of foreign buyers, accounting for 22 and 18 per cent respectively of overall private home purchases by foreigners in April to June 2007. This was followed by buyers from India, United Kingdom and China.
Nearly 96 per cent of the 2,864 private homes foreigners picked up in Q2 were private apartments/ condos, with landed homes making up the remaining 5 per cent.
The 2,743 apartments/ condos foreigners bought in Q2 comprised 2,062 units purchased in the secondary market - up 44 per cent from Q1 and a record quarterly figure - and 681 units acquired from developers in the primary market.
A further split of the secondary market purchases showed that 455 units were acquired in the subsale market and 1,607 units in the resale market. The latter figure was up 37 per cent from the preceding three months and a fresh high.
Resale deals are secondary market deals in developments that have received their Certificates of Statutory Completion, while subsales involve projects that have yet to do so.
DTZ attributed the strong foreign interest in resale properties to the current buoyant leasing market. Given the tight supply of rental properties in the prime districts, many expats are choosing to buy homes. Their preference is for completed properties that they seek to occupy themselves.
The 455 subsale apartments and condos that foreigners bought in Q2 represented a 32 per cent quarter-on-quarter increase and was the second highest quarterly figure ever - trailing only the 485 units snapped up in Q4 1995.
The Sail @ Marina Bay, Sky@eleven and Icon were among the projects popular with foreign buyers in the subsale market in Q2.
In the resale market, the most highly-sought after developments among foreigners included Sanctuary Green, Pebble Bay and Water Place (all in the Tanjong Rhu area), Queens and Valley Park. In the primary market (units purchased directly from developers), Casa Merah, RiverGate, One-north Residences and The Solitaire were among foreign buyers' favourite projects.
Mrs Ong predicts that foreign buying will continue to be steady in the second half of 2007.
'Sub-prime has taken some froth out of the market; but this affects more the specuvestors (who buy for capital gains but don't mind holding on to the property, waiting for its price to rise). Foreign buyers, however, are purchasing more for owner occupation or long-term investment, drawn by Singapore's success in reinventing itself. Property prices here are higher than two years ago, but then Singapore today is very different. It is a very desirable place to invest and live in,' she said.
Koreans become major players; foreign buying hits record 2,864 units
(SINGAPORE) Foreigners, including permanent residents, bought a record 2,864 private homes in Singapore in the second quarter, up 34 per cent from the preceding quarter and more than twice the 1,221 private homes that they invested in during the same period a year ago.But even this brisk buying was dwarfed by Singaporeans, who accounted for 68 per cent of caveats lodged for private home purchases in Q2 this year, up from 65 per cent in Q1.
In contrast, foreign buyers' and PRs' share of total private home purchases slipped to 25 per cent in Q2 2007, from 27 per cent in Q1 2007.
Companies, meanwhile, accounted for the remaining 7 per cent of private home buyers in Q2 2007, reflecting strong collective sales as well as acquisitions by numerous funds investing in residential property, according to DTZ Debenham Tie Leung's analysis of caveats captured by Urban Redevelopment Authority's Realis system.
DTZ's report also showed Koreans are growing in prominence and accounted for 6 per cent of foreign buyers in Q2, their highest share ever. Koreans' share among foreign buyers has been growing steadily over the past year.
The figure used to be around one to 2 per cent in 2004 and 2005, but rose to 2 to 4 per cent in various quarters last year. Koreans hardly featured as buyers in the 1990s.
The 185 private homes Koreans bought here during April to June 2007 reflected a 76 per cent quarter-on-quarter increase.
Growing purchases by Koreans reflect not only acquisitions by Korean nationals residing here, some drawn to Singapore by their children's education, but also efforts by major Singapore developers to market their projects in Korea, DTZ executive director Ong Choon Fah observed.
Indonesians and Malaysians continued to be the largest groups of foreign buyers, accounting for 22 and 18 per cent respectively of overall private home purchases by foreigners in April to June 2007. This was followed by buyers from India, United Kingdom and China.
Nearly 96 per cent of the 2,864 private homes foreigners picked up in Q2 were private apartments/ condos, with landed homes making up the remaining 5 per cent.
The 2,743 apartments/ condos foreigners bought in Q2 comprised 2,062 units purchased in the secondary market - up 44 per cent from Q1 and a record quarterly figure - and 681 units acquired from developers in the primary market.
A further split of the secondary market purchases showed that 455 units were acquired in the subsale market and 1,607 units in the resale market. The latter figure was up 37 per cent from the preceding three months and a fresh high.
Resale deals are secondary market deals in developments that have received their Certificates of Statutory Completion, while subsales involve projects that have yet to do so.
DTZ attributed the strong foreign interest in resale properties to the current buoyant leasing market. Given the tight supply of rental properties in the prime districts, many expats are choosing to buy homes. Their preference is for completed properties that they seek to occupy themselves.
The 455 subsale apartments and condos that foreigners bought in Q2 represented a 32 per cent quarter-on-quarter increase and was the second highest quarterly figure ever - trailing only the 485 units snapped up in Q4 1995.
The Sail @ Marina Bay, Sky@eleven and Icon were among the projects popular with foreign buyers in the subsale market in Q2.
In the resale market, the most highly-sought after developments among foreigners included Sanctuary Green, Pebble Bay and Water Place (all in the Tanjong Rhu area), Queens and Valley Park. In the primary market (units purchased directly from developers), Casa Merah, RiverGate, One-north Residences and The Solitaire were among foreign buyers' favourite projects.
Mrs Ong predicts that foreign buying will continue to be steady in the second half of 2007.
'Sub-prime has taken some froth out of the market; but this affects more the specuvestors (who buy for capital gains but don't mind holding on to the property, waiting for its price to rise). Foreign buyers, however, are purchasing more for owner occupation or long-term investment, drawn by Singapore's success in reinventing itself. Property prices here are higher than two years ago, but then Singapore today is very different. It is a very desirable place to invest and live in,' she said.
Monday, September 17, 2007
Private Home Deals Hit Hefty $32.8b In First Half
Source : The Business Times, September 17, 2007
DTZ expects transactions this year to significantly surpass last year's record $36b
A hefty $32.8 billion worth of private residential properties changed hands in the first six months of this year - more than double the $15 billion chalked up in the same period last year.
And the number is just about 9 per cent shy of the record $36 billion for the whole of 2006, according to an analysis of caveats by DTZ Debenham Tie Leung.
Driving the robust first-half showing has been the rapid escalation of private home prices and rising sales activity including collective sales.
DTZ expects the value of private homes transacted for the whole of this year will 'significantly surpass' last year's record high.
Despite a slowdown in August, the firm's executive director Ong Choon Fah expects strong sales in the primary as well as secondary markets in the coming months. She is of the view that confidence in the Singapore property market remains good and that 'there's still liquidity here' despite the sub-prime mortgage problems in the US.
Private apartments and condos accounted for $26.4 billion, or 80 per cent, of the value of H1 2007 private home deals. This is a 126 per cent jump from the same year-ago period, and is close to the $28.8 billion for the whole of 2006.
The average value per non-landed private residential transaction was $1.61 million in H1 2007. This is about 7 per cent higher than the $1.51 million average value per deal for full-year 2006.
'This was due to the continued interest for high-end residential properties, a significant price increase and rising land values which bolstered premiums achieved in collective sales,' DTZ said in its report.
The traditional prime districts of 9, 10 and 11 made up slightly over half, or about $13.8 billion, of the total value of non-landed private home transactions in first-half 2007. And DTZ reckons the full-year 2007 figure is very likely to surpass the record $16.2 billion for the whole of 2006.
The average value per transaction for prime district apartments and condos also hit a record $2.84 million in H1 2007, which was 7 per cent higher than the $2.67 million average for the whole of last year.
DTZ's analysis was based on caveats captured by the Urban Redevelopment Authority's Realis system dating back to 1995. The analysis showed that the secondary market made up slightly over two-thirds of transaction values for islandwide non-landed homes in H1 2007, and the same was true for the prime districts, in tandem with strong secondary market activity seen in the first half.
The secondary market covers both resale and subsale deals. Resale deals are secondary market deals in projects that have received their Certificates of Statutory Completion, while subsales involve developments that have yet to do so.
In total, $3.5 billion worth of apartments and condos changed hands in H1 2007 in the subsale market, 12 times the $290 million in the same year-ago period.
The H1 2007 subsale value trailed only the $3.9 billion for the whole of 1996, when property speculation was rampant. DTZ expects the full-year 2007 value of subsale apartment and condo deals to exceed 1996's, supported by rising property prices.
The average value per transaction of subsale apartments and condos was at a record high in H1 2007, at $1.62 million, surpassing the $1.35 million average for full-year 2006.
DTZ's Mrs Ong is confident about the momentum of private home sales in the coming months in both the primary and secondary markets.
Prices in the secondary market have risen but there's still a significant price gap between new launches and older properties, even for those that received Temporary Occupation Permits just about a year or so ago. So resale will continue to do well.
In the prime districts, demand for resale properties will also continue to be supported by strong investor interest, as rents increase amidst tight supply in the short term, as numerous sites sold through collective sales will be torn down for redevelopment,' she says.
'In the primary market, developers will do well for mass-market project launches. Housing and Development Board resale flat prices have started to recover and this is providing bottom-up support for the property market. In the high-end segment, some niche projects in the prime districts may be relatively small but these are big-ticket items so that will still chalk up the sale value tally,' Mrs Ong says.
On the US sub-prime mortgage problems, Mrs Ong says: 'When there is uncertainty, there is a flight to safety and gateway cities like Singapore are perceived to be safer than others,' she says.
DTZ expects transactions this year to significantly surpass last year's record $36b
A hefty $32.8 billion worth of private residential properties changed hands in the first six months of this year - more than double the $15 billion chalked up in the same period last year.
And the number is just about 9 per cent shy of the record $36 billion for the whole of 2006, according to an analysis of caveats by DTZ Debenham Tie Leung.
Driving the robust first-half showing has been the rapid escalation of private home prices and rising sales activity including collective sales.
DTZ expects the value of private homes transacted for the whole of this year will 'significantly surpass' last year's record high.
Despite a slowdown in August, the firm's executive director Ong Choon Fah expects strong sales in the primary as well as secondary markets in the coming months. She is of the view that confidence in the Singapore property market remains good and that 'there's still liquidity here' despite the sub-prime mortgage problems in the US.
Private apartments and condos accounted for $26.4 billion, or 80 per cent, of the value of H1 2007 private home deals. This is a 126 per cent jump from the same year-ago period, and is close to the $28.8 billion for the whole of 2006.
The average value per non-landed private residential transaction was $1.61 million in H1 2007. This is about 7 per cent higher than the $1.51 million average value per deal for full-year 2006.
'This was due to the continued interest for high-end residential properties, a significant price increase and rising land values which bolstered premiums achieved in collective sales,' DTZ said in its report.
The traditional prime districts of 9, 10 and 11 made up slightly over half, or about $13.8 billion, of the total value of non-landed private home transactions in first-half 2007. And DTZ reckons the full-year 2007 figure is very likely to surpass the record $16.2 billion for the whole of 2006.
The average value per transaction for prime district apartments and condos also hit a record $2.84 million in H1 2007, which was 7 per cent higher than the $2.67 million average for the whole of last year.
DTZ's analysis was based on caveats captured by the Urban Redevelopment Authority's Realis system dating back to 1995. The analysis showed that the secondary market made up slightly over two-thirds of transaction values for islandwide non-landed homes in H1 2007, and the same was true for the prime districts, in tandem with strong secondary market activity seen in the first half.
The secondary market covers both resale and subsale deals. Resale deals are secondary market deals in projects that have received their Certificates of Statutory Completion, while subsales involve developments that have yet to do so.
In total, $3.5 billion worth of apartments and condos changed hands in H1 2007 in the subsale market, 12 times the $290 million in the same year-ago period.
The H1 2007 subsale value trailed only the $3.9 billion for the whole of 1996, when property speculation was rampant. DTZ expects the full-year 2007 value of subsale apartment and condo deals to exceed 1996's, supported by rising property prices.
The average value per transaction of subsale apartments and condos was at a record high in H1 2007, at $1.62 million, surpassing the $1.35 million average for full-year 2006.
DTZ's Mrs Ong is confident about the momentum of private home sales in the coming months in both the primary and secondary markets.
Prices in the secondary market have risen but there's still a significant price gap between new launches and older properties, even for those that received Temporary Occupation Permits just about a year or so ago. So resale will continue to do well.
In the prime districts, demand for resale properties will also continue to be supported by strong investor interest, as rents increase amidst tight supply in the short term, as numerous sites sold through collective sales will be torn down for redevelopment,' she says.
'In the primary market, developers will do well for mass-market project launches. Housing and Development Board resale flat prices have started to recover and this is providing bottom-up support for the property market. In the high-end segment, some niche projects in the prime districts may be relatively small but these are big-ticket items so that will still chalk up the sale value tally,' Mrs Ong says.
On the US sub-prime mortgage problems, Mrs Ong says: 'When there is uncertainty, there is a flight to safety and gateway cities like Singapore are perceived to be safer than others,' she says.
Sunday, September 2, 2007
Changing Face Of Foreign Owners
By Sonia Kolesnikov-Jessop
Malaysians and Indonesians have traditionally been the dominant foreign buyers of property in Singapore and they still remain at the top of the list. However, over the last year, their shares of the property market bought by foreigners have been diminishing in favour of other nationalities.
According to Donald Han, Managing Director (Singapore) of Cushman and Wakefield, requests for information are coming fast and furious from Middle Eastern, Indian and Korean investors, although investors from different counties are looking at different sectors of the market.
While the deeper-pocketed Middle Eastern buyers are more interested in District 9 and the Orchard Road areas, the Koreans, who typically have a US$1-$3 million budget, are looking at the fringes of the central core area. Indians generally target the mid-market to upper-tier market and are willing to go further into the suburbs like Clementi, Yishun and Bukit Batok, while Europeans tend to go for projects that are under construction.
“Europeans are playing the rising market. They’re not looking into yield but strictly looking into being an absentee investor. When the property is ready, they might offload it instead of having the headache of finding a tenant,” Han explains.
Data from the URA shows that the number of Korean purchasers increased 132% in 2006, while the number of French increased by 138%. Indian buyers were up 72%, while American buyers were up 67% and Australian buyers were up 45%. However, it should be remembered that some of these figures may be skewed by low base figures, professionals said.
“Singapore has long been a favoured country for foreign investors,” notes Chia Ngiang Hong, Group General Manager of City Developments Limited. “However, we’re also experiencing increased interest from many first-time foreign buyers as well as many from non-traditional markets. This is a positive sign that Singapore is developing into a global city for investors. It marks its success of transforming into one of the most attractive and exciting cities to live and work in.”
Global appeal
The latest URA data shows that foreign buying interest has remained strong so far this year. Purchases by foreigners made up 29% of total purchases in the first half of 2007, said Tay Huey Ying, Director of Research and Consultancy at Colliers International.
Between January 2006 and June 2007, 33.6% of foreign purchases were for properties in districts 9 and 10, while 12.1% of foreign purchases were for properties in District 15. In terms of pricing, 6% of all foreign purchases were for properties priced at S$5 million and above, and 39% were for properties priced between S$1.5 million and S$5 million, Tay revealed.
Given the ongoing restrictions on landed properties, the majority of the properties purchased were condominium units. Even so, there has also been a growth in the number of buyers for landed properties.
Based on DTZ Debenham Tie Leung’s analysis of caveats captured by the URA’s Realis database, foreigners bought 2,008 non-landed private homes in the first quarter of this year, accounting for 30.3% of the total condos/apartments bought in the period, while foreigners (mainly Permanent Residents) bought 93 landed homes, only 8.4% of the total of 1,108 landed homes purchased.
While buyers from Indonesia and Malaysia remain the dominant players in the current market, the share of the top-five nationalities (68%) continued to slide, a trend that started in 2005. “This shows that private residential properties are attracting interest from other nationalities and that Singapore is becoming more international,” points out Ong Choon Fah, Executive Director at DTZ Debenham Tie Leung.
Developers are also reporting anecdotal evidence of the increase in these new buyers. At the launch of luxury boutique development Parkview Éclat, foreigners represented 83% of buyers, with some South Asian owners, the second-largest group of buyers, taking on more than one unit, said Eddie Chow, a Senior Executive at the Hong Kong Parkview Group.
Spreading the message
To cater for this wider international demand, developers are now going further afield in their road shows and spending top dollar on their show flats. Kan Kum Wah, Head of Residential Marketing for Marina Bay Financial Centre, revealed that this year’s current marketing plans include exhibitions and talks at luxury property conferences in Hong Kong (twice), Shanghai and Dubai, to build interest and awareness ahead of their second residential tower planned for later this year or early next year. When the Marina Bay Residences’ first tower was launched last December, around 40% of the buyers were from overseas.
Kan said the presence of this new type of buyers was to be expected given the rapid expansion of the banking and financial sector due to Singapore’s growing reputation as a financial hub. He also pointed to a new trend, also evidenced in Parkview Éclat: the rise of the multiple home owner.
“These buyers typically own multiple homes in multiple destinations,” Kan said. “I envisage the buyers of high-end developments in Singapore owning homes in other vibrant cities like Hong Kong, Shanghai, Tokyo and Dubai. These buyers are attracted by location, being near leisure and business districts, as well as quality and exclusiveness. Price is not the major concern with this type of buyer, and many are prepared to write blank cheques up to a pre-arranged price.”
Foreign investors are not only buying for investment but also to live in, property experts point out. Ong noted that foreigners have become more active in the resale market where they now account for 32% of resale apartment transactions. Unlike new projects, these homes are usually ready for lease immediately. Tay anticipates buying interest from foreigners will grow from strength to strength in the coming years.
“Singapore’s journey as a global property market has just only begun,” she said. “As such, we believe that to date, only a small fraction of the world’s high net worth individuals have invested in Singapore’s residential property market. We’re of the opinion that as Singapore’s reputation as an attractive country for investment, particularly due to our economic makeover, reaches out to an even wider global market, more foreigners can be expected to purchase residential properties in Singapore.”
Malaysians and Indonesians have traditionally been the dominant foreign buyers of property in Singapore and they still remain at the top of the list. However, over the last year, their shares of the property market bought by foreigners have been diminishing in favour of other nationalities.
According to Donald Han, Managing Director (Singapore) of Cushman and Wakefield, requests for information are coming fast and furious from Middle Eastern, Indian and Korean investors, although investors from different counties are looking at different sectors of the market.
While the deeper-pocketed Middle Eastern buyers are more interested in District 9 and the Orchard Road areas, the Koreans, who typically have a US$1-$3 million budget, are looking at the fringes of the central core area. Indians generally target the mid-market to upper-tier market and are willing to go further into the suburbs like Clementi, Yishun and Bukit Batok, while Europeans tend to go for projects that are under construction.
“Europeans are playing the rising market. They’re not looking into yield but strictly looking into being an absentee investor. When the property is ready, they might offload it instead of having the headache of finding a tenant,” Han explains.
Data from the URA shows that the number of Korean purchasers increased 132% in 2006, while the number of French increased by 138%. Indian buyers were up 72%, while American buyers were up 67% and Australian buyers were up 45%. However, it should be remembered that some of these figures may be skewed by low base figures, professionals said.
“Singapore has long been a favoured country for foreign investors,” notes Chia Ngiang Hong, Group General Manager of City Developments Limited. “However, we’re also experiencing increased interest from many first-time foreign buyers as well as many from non-traditional markets. This is a positive sign that Singapore is developing into a global city for investors. It marks its success of transforming into one of the most attractive and exciting cities to live and work in.”
Global appeal
The latest URA data shows that foreign buying interest has remained strong so far this year. Purchases by foreigners made up 29% of total purchases in the first half of 2007, said Tay Huey Ying, Director of Research and Consultancy at Colliers International.
Between January 2006 and June 2007, 33.6% of foreign purchases were for properties in districts 9 and 10, while 12.1% of foreign purchases were for properties in District 15. In terms of pricing, 6% of all foreign purchases were for properties priced at S$5 million and above, and 39% were for properties priced between S$1.5 million and S$5 million, Tay revealed.
Given the ongoing restrictions on landed properties, the majority of the properties purchased were condominium units. Even so, there has also been a growth in the number of buyers for landed properties.
Based on DTZ Debenham Tie Leung’s analysis of caveats captured by the URA’s Realis database, foreigners bought 2,008 non-landed private homes in the first quarter of this year, accounting for 30.3% of the total condos/apartments bought in the period, while foreigners (mainly Permanent Residents) bought 93 landed homes, only 8.4% of the total of 1,108 landed homes purchased.
While buyers from Indonesia and Malaysia remain the dominant players in the current market, the share of the top-five nationalities (68%) continued to slide, a trend that started in 2005. “This shows that private residential properties are attracting interest from other nationalities and that Singapore is becoming more international,” points out Ong Choon Fah, Executive Director at DTZ Debenham Tie Leung.
Developers are also reporting anecdotal evidence of the increase in these new buyers. At the launch of luxury boutique development Parkview Éclat, foreigners represented 83% of buyers, with some South Asian owners, the second-largest group of buyers, taking on more than one unit, said Eddie Chow, a Senior Executive at the Hong Kong Parkview Group.
Spreading the message
To cater for this wider international demand, developers are now going further afield in their road shows and spending top dollar on their show flats. Kan Kum Wah, Head of Residential Marketing for Marina Bay Financial Centre, revealed that this year’s current marketing plans include exhibitions and talks at luxury property conferences in Hong Kong (twice), Shanghai and Dubai, to build interest and awareness ahead of their second residential tower planned for later this year or early next year. When the Marina Bay Residences’ first tower was launched last December, around 40% of the buyers were from overseas.
Kan said the presence of this new type of buyers was to be expected given the rapid expansion of the banking and financial sector due to Singapore’s growing reputation as a financial hub. He also pointed to a new trend, also evidenced in Parkview Éclat: the rise of the multiple home owner.
“These buyers typically own multiple homes in multiple destinations,” Kan said. “I envisage the buyers of high-end developments in Singapore owning homes in other vibrant cities like Hong Kong, Shanghai, Tokyo and Dubai. These buyers are attracted by location, being near leisure and business districts, as well as quality and exclusiveness. Price is not the major concern with this type of buyer, and many are prepared to write blank cheques up to a pre-arranged price.”
Foreign investors are not only buying for investment but also to live in, property experts point out. Ong noted that foreigners have become more active in the resale market where they now account for 32% of resale apartment transactions. Unlike new projects, these homes are usually ready for lease immediately. Tay anticipates buying interest from foreigners will grow from strength to strength in the coming years.
“Singapore’s journey as a global property market has just only begun,” she said. “As such, we believe that to date, only a small fraction of the world’s high net worth individuals have invested in Singapore’s residential property market. We’re of the opinion that as Singapore’s reputation as an attractive country for investment, particularly due to our economic makeover, reaches out to an even wider global market, more foreigners can be expected to purchase residential properties in Singapore.”
Friday, August 31, 2007
Foreign Funds, Individuals On Property Spree
Source : The Business Times, Fri, Aug 31, 2007
Almost $2b spent on buying condos this year
(SINGAPORE) Institutional investors and foreign individuals have been bulk-buying 10 to 50 condominium units at a time here, with such deals expected to have hit almost $2 billion so far this year.
CB Richard Ellis (CBRE) Research says at least 16 deals worth a total of about $1.7 billion have been done in the first eight months.
And CBRE executive director (investment properties) Jeremy Lake believes 20-25 per cent more deals could also be going undetected.
The deals are usually registered as acquisitions by companies. More detailed data is held by the Inland Revenue Authority of Singapore but is not available to the public.
The Urban Redevelopment Authority releases quarterly figures on purchases by companies but these are only for sold, uncompleted private residential projects.
The figures nevertheless show that companies bought 279 units in the second quarter of this year - six times more than the 39 units in Q2 2006.
Societe Generale (SG) said in April that it had set up a property fund that had already raised $20 million that was quickly invested in 10-15 properties in prime districts.
These transactions were not captured by CBRE. And when contacted recently for more information, SG said that because the fund is a private one, it could not give details.
Other institutional investors said to have made bulk-buys recently are Kuwait Finance House and Goldman Sachs.
According to CBRE, only three deals were done in 2006. Citadel Equity Fund, for one, bought 25 units at One Tree Hill Residence.
The trend is not new. Mr Lake said Pramerica made bulk-buys at Avalon, Holland Hill and Duchess Crest in early 2002.
The current buoyancy in the property market is the major factor behind the resurgence of such deals.
As Mr Lake pointed out: 'You can participate in this market as a developer - as Lehman Brothers is doing through joint ventures with Chip Eng Seng. The other route is to buy units.'
The returns may be less, but Mr Lake said: 'There is also less risk compared to a development project.'
The investment in a development project is also much larger. 'Some of these investors are not looking to spend large amounts of money,' he said.
According to CBRE, most bulk-buying was by individual foreign investors. Their identities are not readily available, as they could have bought through companies. But Mr Lake believes these high net worth individuals are 'primarily driven by confidence in the market and personal interest in a particular project'.
Bulk purchases at Reflections @ Keppel Bay included one such private investor as well as a Middle Eastern fund, he said.
He reckons these buyers are looking for either rental returns or capital appreciation. 'In either case, they expect prices to increase.'
They may also want to diversify their portfolio and spread risks, he said.
But in light of the global credit crunch, investors everywhere will be re-evaluating risk.
And according to Mr Lake, it is 'unlikely' that the same number of investors - institutional or otherwise - would choose to park their money in real estate in the months ahead. 'They will be more selective now,' he said.
Almost $2b spent on buying condos this year
(SINGAPORE) Institutional investors and foreign individuals have been bulk-buying 10 to 50 condominium units at a time here, with such deals expected to have hit almost $2 billion so far this year.
CB Richard Ellis (CBRE) Research says at least 16 deals worth a total of about $1.7 billion have been done in the first eight months.
And CBRE executive director (investment properties) Jeremy Lake believes 20-25 per cent more deals could also be going undetected.
The deals are usually registered as acquisitions by companies. More detailed data is held by the Inland Revenue Authority of Singapore but is not available to the public.
The Urban Redevelopment Authority releases quarterly figures on purchases by companies but these are only for sold, uncompleted private residential projects.
The figures nevertheless show that companies bought 279 units in the second quarter of this year - six times more than the 39 units in Q2 2006.
Societe Generale (SG) said in April that it had set up a property fund that had already raised $20 million that was quickly invested in 10-15 properties in prime districts.
These transactions were not captured by CBRE. And when contacted recently for more information, SG said that because the fund is a private one, it could not give details.
Other institutional investors said to have made bulk-buys recently are Kuwait Finance House and Goldman Sachs.
According to CBRE, only three deals were done in 2006. Citadel Equity Fund, for one, bought 25 units at One Tree Hill Residence.
The trend is not new. Mr Lake said Pramerica made bulk-buys at Avalon, Holland Hill and Duchess Crest in early 2002.
The current buoyancy in the property market is the major factor behind the resurgence of such deals.
As Mr Lake pointed out: 'You can participate in this market as a developer - as Lehman Brothers is doing through joint ventures with Chip Eng Seng. The other route is to buy units.'
The returns may be less, but Mr Lake said: 'There is also less risk compared to a development project.'
The investment in a development project is also much larger. 'Some of these investors are not looking to spend large amounts of money,' he said.
According to CBRE, most bulk-buying was by individual foreign investors. Their identities are not readily available, as they could have bought through companies. But Mr Lake believes these high net worth individuals are 'primarily driven by confidence in the market and personal interest in a particular project'.
Bulk purchases at Reflections @ Keppel Bay included one such private investor as well as a Middle Eastern fund, he said.
He reckons these buyers are looking for either rental returns or capital appreciation. 'In either case, they expect prices to increase.'
They may also want to diversify their portfolio and spread risks, he said.
But in light of the global credit crunch, investors everywhere will be re-evaluating risk.
And according to Mr Lake, it is 'unlikely' that the same number of investors - institutional or otherwise - would choose to park their money in real estate in the months ahead. 'They will be more selective now,' he said.
Saturday, August 11, 2007
Documents Require For Applying A Housing Loan & Refinancing An Existing Mortgage Loan
Below are the documents required for buyers applying a Housing Loan
1. Attached application form duly signed
2. CPF statement of account
3. CPF 15th month contribution history and latest computerised payslip
4. Latest income tax notice of assessment (2005)/2 yrs income tax assessment for self employed
5. Copy of NRIC (Valid Passport, for foreigners)
If there is an existing property that is currently for sale/sold or if bridging loan is required:
1. CPF property withdrawal statement
2. HDB 18 months mortgage loan statement or last 6 months housing loan statement
3. Option To Purchase if property is already sold
Refinancing Mortgage Loan
Most housing loans granted charge lower interest rates for first 2 years and thereafter higher interest rates. Thus, you might be able to save substantially by refinancing your housing loan.
Here are a few considerations to take into account when refinancing your mortgage :-
1. Interest rates after the promotion
Borrowers should particularly note the bank’s interest rate after the “promotional” years. This is especially relevant if the property owner does not expect to sell his property within 10 years of buying it. Most banks peg the rates at a discount off their housing rate or at a markup from their prime rate. Almost no bank will fix the interest rate for a loan beyond the first 5 years.
2. Early redemption penalty on current loan
Ensure current mortgage is not under the lock-in period as stated in the current loan’s T&C. To a bank, committing to a housing loan means setting aside a large sum of money for a long period of time and much paperwork. As such, almost all banks will impose a penalty for borrowers repaying the loan and redeeming their mortgage within the first few years. Typically, the penalty is set at 1% of the housing loan amount. However, it is common practice that banks impose a longer/higher penalty if their promotional package is especially attractive.
3. Cash Top-Up
The current outstanding loan amount must not be greater then the valuation of the property. If your property has lost a lot in value since you took your existing loan you may find the new loan quantum substantially lower than the original amount. It may not be enough to pay off your current loan, which means you may need to come up with cash to bridge the difference. Generally, bank will refinance about 80% to 90% of the current valuation of the property.
P.S : If you need any help in finding a Bank, do give me a ring or drop me an email.
1. Attached application form duly signed
2. CPF statement of account
3. CPF 15th month contribution history and latest computerised payslip
4. Latest income tax notice of assessment (2005)/2 yrs income tax assessment for self employed
5. Copy of NRIC (Valid Passport, for foreigners)
If there is an existing property that is currently for sale/sold or if bridging loan is required:
1. CPF property withdrawal statement
2. HDB 18 months mortgage loan statement or last 6 months housing loan statement
3. Option To Purchase if property is already sold
Refinancing Mortgage Loan
Most housing loans granted charge lower interest rates for first 2 years and thereafter higher interest rates. Thus, you might be able to save substantially by refinancing your housing loan.
Here are a few considerations to take into account when refinancing your mortgage :-
1. Interest rates after the promotion
Borrowers should particularly note the bank’s interest rate after the “promotional” years. This is especially relevant if the property owner does not expect to sell his property within 10 years of buying it. Most banks peg the rates at a discount off their housing rate or at a markup from their prime rate. Almost no bank will fix the interest rate for a loan beyond the first 5 years.
2. Early redemption penalty on current loan
Ensure current mortgage is not under the lock-in period as stated in the current loan’s T&C. To a bank, committing to a housing loan means setting aside a large sum of money for a long period of time and much paperwork. As such, almost all banks will impose a penalty for borrowers repaying the loan and redeeming their mortgage within the first few years. Typically, the penalty is set at 1% of the housing loan amount. However, it is common practice that banks impose a longer/higher penalty if their promotional package is especially attractive.
3. Cash Top-Up
The current outstanding loan amount must not be greater then the valuation of the property. If your property has lost a lot in value since you took your existing loan you may find the new loan quantum substantially lower than the original amount. It may not be enough to pay off your current loan, which means you may need to come up with cash to bridge the difference. Generally, bank will refinance about 80% to 90% of the current valuation of the property.
P.S : If you need any help in finding a Bank, do give me a ring or drop me an email.
Wednesday, July 25, 2007
Rising Rentals In Singapore Have Led To More Expatriates Buying Properties Here.
Source: Channel NewsAsia,09 July 2007
More expats buying homes as rents jump 35% in first half: analysts
Property market watchers say a growing number of foreign executives are choosing to trade off living in upscale locations for bigger properties outside the city area and home ownership.
According to some calculations, average rents in Singapore went up by 35 percent in the first six months of this year over the same period last year.
This is causing expatriates to move to cheaper districts.
And anecdotal evidence is suggesting that of late, more are thinking of buying their flats.
Nicholas Mak, Consultancy and Research Director, Knight Frank, said: "Another group of expatriate tenants are actually considering buying properties - either buying the apartments they are renting, ... or considering asking for their rental package - their housing accommodation package - to be paid as a lump sum so that they can use that to purchase a home, maybe even a landed property."
Flats in prime districts now rent for an average of S$3.26 per square foot a month, while those just outside of the central areas are letting for $2.30 per square foot a month.
The districts of 9, 10 and 11 may be rental hotspots for most higher-end expats.
But analysts say those seeking to buy tend to go for the upper-mid level properties between 15 to 20 years old in outlying areas like Clementi, Toh Tuck and even Loyang and Pasir Ris.
Such expats, some of whom are permanent residents, typically have a budget of just over a million dollars.
Donald Han, Managing Director, Cushman and Wakefield, said: "We've actually started to see out of 10 expatriates that we serve, at least one will be looking into either leasing or potentially even buying. And quite a fair bit of those will ultimately decide to purchase rather than lease. Typically they'll look into the fringe of Districts 9, 10, and 11.
"They will look into properties which are not the top end, more into the upper-mid level, potentially within the S$800 to as much as S$1,200 per square foot. And the units could be of the size of one- to two-bedroom kind of apartments. For landed property, typically perhaps a District 21, landed terrace houses which might go in the region of a million to S$1.2 million."
Property market watchers say the upward pressure on rental prices is unlikely to let up over the next 12 months.
Mr Mak said: "Private home rentals are still going to face a lot of upward pressure for the rest of this year and probably for the first half of next year. This year alone, we could easily see average rentals go up by anywhere from 15 percent to even as much as 25 percent."
Mr Han said: "Rental will continue to rise by virtue that it's really a landlord's market. I suspect rental in the next 12 months will probably continue to rise between the range of about 20 percent to 25 percent from current levels."
This comes as demand continues to grow and collective sales aggravate the already limited supply available. - CNA/ch
More expats buying homes as rents jump 35% in first half: analysts
Property market watchers say a growing number of foreign executives are choosing to trade off living in upscale locations for bigger properties outside the city area and home ownership.
According to some calculations, average rents in Singapore went up by 35 percent in the first six months of this year over the same period last year.
This is causing expatriates to move to cheaper districts.
And anecdotal evidence is suggesting that of late, more are thinking of buying their flats.
Nicholas Mak, Consultancy and Research Director, Knight Frank, said: "Another group of expatriate tenants are actually considering buying properties - either buying the apartments they are renting, ... or considering asking for their rental package - their housing accommodation package - to be paid as a lump sum so that they can use that to purchase a home, maybe even a landed property."
Flats in prime districts now rent for an average of S$3.26 per square foot a month, while those just outside of the central areas are letting for $2.30 per square foot a month.
The districts of 9, 10 and 11 may be rental hotspots for most higher-end expats.
But analysts say those seeking to buy tend to go for the upper-mid level properties between 15 to 20 years old in outlying areas like Clementi, Toh Tuck and even Loyang and Pasir Ris.
Such expats, some of whom are permanent residents, typically have a budget of just over a million dollars.
Donald Han, Managing Director, Cushman and Wakefield, said: "We've actually started to see out of 10 expatriates that we serve, at least one will be looking into either leasing or potentially even buying. And quite a fair bit of those will ultimately decide to purchase rather than lease. Typically they'll look into the fringe of Districts 9, 10, and 11.
"They will look into properties which are not the top end, more into the upper-mid level, potentially within the S$800 to as much as S$1,200 per square foot. And the units could be of the size of one- to two-bedroom kind of apartments. For landed property, typically perhaps a District 21, landed terrace houses which might go in the region of a million to S$1.2 million."
Property market watchers say the upward pressure on rental prices is unlikely to let up over the next 12 months.
Mr Mak said: "Private home rentals are still going to face a lot of upward pressure for the rest of this year and probably for the first half of next year. This year alone, we could easily see average rentals go up by anywhere from 15 percent to even as much as 25 percent."
Mr Han said: "Rental will continue to rise by virtue that it's really a landlord's market. I suspect rental in the next 12 months will probably continue to rise between the range of about 20 percent to 25 percent from current levels."
This comes as demand continues to grow and collective sales aggravate the already limited supply available. - CNA/ch
More Foreigners Drawn To Properties Here
Source: Weekend Today, 09 June 2007
If you have put your money down for a newly launched private property in the first quarter of this year, there is a pretty good chance that your future neighbour may not be Singaporean.
Singapore’s attractiveness to foreign talent has seen an increase in the number of foreigners putting their money down for properties here, according to a report by real estate specialists DTZ Debenham Tie Leung.
An analysis of the Urban Redevelopment Authority’s Realis caveat data revealed that foreigners and permanent residents bought 1,938 private homes in the first quarter of this year.
This is the highest number of foreign purchases recorded by the Realis system. In the fourth quarter of last year, foreigners lodged 1,934 caveats.
Buyers from neighbouring countries like Indonesia and Malaysia continue to make their presence felt in the foreign homebuyer market, leading the field at 21 and 19 per cent respectively in total transactions involving foreigners.
Buyers from India make up the third largest group, purchasing a total of 275 properties, thereby making up 14 per cent of total foreign purchases this year.
DTZ attributes this to Singapore’s attractiveness to Indian professionals and their families.
Buyers from the United Kingdom and China make up the top five nationalities with 9 and 7 per cent respectively.
The top five nationalities make up only 68 per cent of the total foreign purchases in the first quarter of this year, reflecting buyer interest from other countries.
With 96 transactions in the year’s first quarter, Koreans stepped up their purchases; reflecting 30 per cent quarter-on-quarter and 308 per cent year-on-year increases.
There were a total of 100 transactions involving Australians, reflecting a 13 per cent increase quarter-on-quarter, and a 144 per cent year-on-year increase.
The prime areas of Orchard, Holland and Bukit Timah, as well as Katong and East Coast, seem to attract these foreigners.
In the primary market, projects like the Tribeca, St Regis Residences and Marina Bay Residences received a lot of foreign interest.
While over in the secondary market, projects like Costa del Sol, Pebble Bay and the Caribbean at Keppel Bay caught their eye.
If you have put your money down for a newly launched private property in the first quarter of this year, there is a pretty good chance that your future neighbour may not be Singaporean.
Singapore’s attractiveness to foreign talent has seen an increase in the number of foreigners putting their money down for properties here, according to a report by real estate specialists DTZ Debenham Tie Leung.
An analysis of the Urban Redevelopment Authority’s Realis caveat data revealed that foreigners and permanent residents bought 1,938 private homes in the first quarter of this year.
This is the highest number of foreign purchases recorded by the Realis system. In the fourth quarter of last year, foreigners lodged 1,934 caveats.
Buyers from neighbouring countries like Indonesia and Malaysia continue to make their presence felt in the foreign homebuyer market, leading the field at 21 and 19 per cent respectively in total transactions involving foreigners.
Buyers from India make up the third largest group, purchasing a total of 275 properties, thereby making up 14 per cent of total foreign purchases this year.
DTZ attributes this to Singapore’s attractiveness to Indian professionals and their families.
Buyers from the United Kingdom and China make up the top five nationalities with 9 and 7 per cent respectively.
The top five nationalities make up only 68 per cent of the total foreign purchases in the first quarter of this year, reflecting buyer interest from other countries.
With 96 transactions in the year’s first quarter, Koreans stepped up their purchases; reflecting 30 per cent quarter-on-quarter and 308 per cent year-on-year increases.
There were a total of 100 transactions involving Australians, reflecting a 13 per cent increase quarter-on-quarter, and a 144 per cent year-on-year increase.
The prime areas of Orchard, Holland and Bukit Timah, as well as Katong and East Coast, seem to attract these foreigners.
In the primary market, projects like the Tribeca, St Regis Residences and Marina Bay Residences received a lot of foreign interest.
While over in the secondary market, projects like Costa del Sol, Pebble Bay and the Caribbean at Keppel Bay caught their eye.
Landed Property: Ministry Says No Pans To Lift Curbs On Foreigners
Source: The Business Times, 28 June 2007
There are no plans to liberalise the existing restrictions on foreigners buying landed properties in Singapore, the Law Ministry said yesterday.
‘In land scarce Singapore, landed properties have to be treated as a special category where purchases by foreigners are subject to special approval,’ a MinLaw spokesman said.
Earlier this week, BT reported on a paper by Goldman Sachs (Singapore), which argued a case for lifting restrictions on foreigners buying landed homes in Singapore. The Goldman Sachs paper said such a change would serve as a catalyst for further foreign buying of private homes and boost the current residential property upcycle.
Removing the restrictions would result in some positive spinoffs, and residential developers could gain from even greater foreign buying interest given the positive message such a move would send.
‘We think relaxing restrictions on foreigners buying landed property would accelerate Singapore’s efforts to attract foreign talent,’ the Goldman Sachs paper had said.
However, some BT readers take a different view. One, Singaporean Patrick Chia, managing director of Hospitality Associates, who is a landed property owner, said: ‘If foreigners are allowed to freely buy landed property, all the non-government owned landed property could theoretically and practically be bought up, because in this 21st Century, the world is flush with liquidity.‘
‘The current abundance of petro-dollars from the oil-rich Middle-East countries and Russia can easily buy up Singapore. So can the current American and European funds with their billions. Bankers and real estate agents can confirm that foreign funds are looking for Singapore property assets to buy.’
Mr Chia, who has nearly 30 years’ experience in the Singapore property business, also recapped the historical circumstances in the early 1970s that led to the government introducing the Residential Property Act in 1973. That law bars foreigners, including permanent residents, from buying landed property here without prior government approval.
‘Way back in 1973, with the first oil shock when oil prices sky-rocketed, then-rich neighbours, Indonesians and Malaysians, were able to freely buy Singapore landed property and much of the prime landed real estate were bought by them.
‘The government, realising the future implications of such a scenario if left unchecked, wisely instituted the current curbs to foreigner purchase of landed property,’ Mr Chia added.
And over the past 30 years, the government has continuously relaxed the curbs as needed, and pointed out that the Singapore government has been very accommodating in this regard compared with many other countries. In Singapore, foreigners have to be PRs before they can receive permission to buy landed homes on mainland Singapore, and Sentosa Cove is the only location where foreigners who are not PRs are allowed to purchase landed property. Even then, foreign would-be buyers must seek permission from the Land Dealings (Approval) Unit under the Singapore Land Authority.
Foreigners, including PRs, can at any one time own only one landed home in Singapore and must occupy it themselves rather than renting it out.
Among the criteria that the Minister for Law will consider when asked to approve foreigners/PRs buying a landed home in Singapore are the applicant’s qualifications and whether the applicant has made, or will be able to make, adequate economic contribution to Singapore.
Typically, it takes about four weeks for approval to be granted, but on Sentosa Cove, the time has been cut to less than 48 hours under a special fast-track approval scheme.
The landed properties that foreigners and PRs may be permitted to buy must have a land area of no more than 15,000 sq ft, although exceptions have been made, with some PRs buying Good Class Bungalows, which have a plot size of at least 1,400 square metres (about 15,070 sq ft).
Foreign buyers may acquire an unlimited number of non-landed private homes, that is, condominiums and apartments. The only foreigners who may buy HDB flats on the resale market are PRs
There are no plans to liberalise the existing restrictions on foreigners buying landed properties in Singapore, the Law Ministry said yesterday.
‘In land scarce Singapore, landed properties have to be treated as a special category where purchases by foreigners are subject to special approval,’ a MinLaw spokesman said.
Earlier this week, BT reported on a paper by Goldman Sachs (Singapore), which argued a case for lifting restrictions on foreigners buying landed homes in Singapore. The Goldman Sachs paper said such a change would serve as a catalyst for further foreign buying of private homes and boost the current residential property upcycle.
Removing the restrictions would result in some positive spinoffs, and residential developers could gain from even greater foreign buying interest given the positive message such a move would send.
‘We think relaxing restrictions on foreigners buying landed property would accelerate Singapore’s efforts to attract foreign talent,’ the Goldman Sachs paper had said.
However, some BT readers take a different view. One, Singaporean Patrick Chia, managing director of Hospitality Associates, who is a landed property owner, said: ‘If foreigners are allowed to freely buy landed property, all the non-government owned landed property could theoretically and practically be bought up, because in this 21st Century, the world is flush with liquidity.‘
‘The current abundance of petro-dollars from the oil-rich Middle-East countries and Russia can easily buy up Singapore. So can the current American and European funds with their billions. Bankers and real estate agents can confirm that foreign funds are looking for Singapore property assets to buy.’
Mr Chia, who has nearly 30 years’ experience in the Singapore property business, also recapped the historical circumstances in the early 1970s that led to the government introducing the Residential Property Act in 1973. That law bars foreigners, including permanent residents, from buying landed property here without prior government approval.
‘Way back in 1973, with the first oil shock when oil prices sky-rocketed, then-rich neighbours, Indonesians and Malaysians, were able to freely buy Singapore landed property and much of the prime landed real estate were bought by them.
‘The government, realising the future implications of such a scenario if left unchecked, wisely instituted the current curbs to foreigner purchase of landed property,’ Mr Chia added.
And over the past 30 years, the government has continuously relaxed the curbs as needed, and pointed out that the Singapore government has been very accommodating in this regard compared with many other countries. In Singapore, foreigners have to be PRs before they can receive permission to buy landed homes on mainland Singapore, and Sentosa Cove is the only location where foreigners who are not PRs are allowed to purchase landed property. Even then, foreign would-be buyers must seek permission from the Land Dealings (Approval) Unit under the Singapore Land Authority.
Foreigners, including PRs, can at any one time own only one landed home in Singapore and must occupy it themselves rather than renting it out.
Among the criteria that the Minister for Law will consider when asked to approve foreigners/PRs buying a landed home in Singapore are the applicant’s qualifications and whether the applicant has made, or will be able to make, adequate economic contribution to Singapore.
Typically, it takes about four weeks for approval to be granted, but on Sentosa Cove, the time has been cut to less than 48 hours under a special fast-track approval scheme.
The landed properties that foreigners and PRs may be permitted to buy must have a land area of no more than 15,000 sq ft, although exceptions have been made, with some PRs buying Good Class Bungalows, which have a plot size of at least 1,400 square metres (about 15,070 sq ft).
Foreign buyers may acquire an unlimited number of non-landed private homes, that is, condominiums and apartments. The only foreigners who may buy HDB flats on the resale market are PRs
Investors See Asian Property Markets Only Rising Further
Source: The Business Times, 28 June 2007
It’s a decade since an asset bubble fed the Asian economic crisis and fears swirl over the US housing market and interest rates, but investors still believe the only way for Asia’s soaring property markets is up - at least for a couple of years.
Asian economies are booming, and property is once again the hot subject of dinner conversations from Tokyo to Mumbai, fuelled by cheap credit, cross-border investment and rising incomes.
Policy-makers fear a boom-and-bust cycle where rising real estate prices fuel inflation and force interest rates higher, leaving households and companies loaded with debt and dragging on economic activity.
But at the Reuters Real Estate Summit this week in Singapore, where some residents are seeing their rents jump 50 per cent overnight, property executives effused about India, despite a doubling in urban land prices since foreign property investment was ushered in two years ago.
Japan also appears to be still hugely popular, although average Tokyo office prices have leapt 25per cent in last two years.
And investors believe government cooling measures will bring order to China’s market, while failing to stem a hunger for homes among the expanding and increasingly affluent middle class.
Justin Chiu, executive director of Hong Kong property giant Cheung Kong (Holdings), said the prospect of ever higher prices was driving Asia’s notoriously sentiment-driven markets. ‘If there are no bubbles, you don’t drink beer. It’s just plain water and there’s no incentive to invest,’ he said. ‘Of course, if you see too many bubbles, you stop pouring.’
Cheung Kong expects mainland China to account for a third of its property earnings by 2010 from about 18 per cent now.
The Asian continent saw some US$94 billion of property investment in 2006, up 43 per cent on the previous year, but barely one-seventh of the global total. And investors show no sign they will stop the flow.
New flavours
Morgan Stanley said last week it had earmarked for 60per cent of a new US$8 billion fund for Asia and Goldman Sachs has raised about the same amount in a couple of funds, according to a source familiar with the matter.
ING Real Estate is raising two US$1 billion funds for Asia, and private equity firm Blackstone is raising US$10 billion to spend globally.
But some market watchers wonder where all the money will be spent, and if rising values will curb investment returns.
Asian commercial property is tightly held by families and private companies, so Peter Barge, Asia chief executive of property consultants Jones Lang LaSalle, believes many investors will have to take on risky development projects. ‘There’s a lot of money on the books, but people are scratching their heads about what to do with it,’ Mr Barge said.
Japan is a perennial favourite in Asia because its US$1.27 trillion of investment-grade property offers huge choice.
Kurt Roeloffs, Asia head for Deutsche Bank’s property unit RREEF, put it at the top of his list followed by China and India. RREEF, one of the world’s biggest property fund managers, plans to spend around 30 per cent of its future private equity funds in Asia, Mr Roeloffs said on Monday. China is drawing Hong Kong developers such as Cheung Kong as well as funds run by ING Real Estate, AETOS Capital and Invesco.
But the new flavours of the month are India and Vietnam, which both rank among the most opaque property markets in the world but promise internal rates of return of 25-30 per cent.
Forecasts that Indian property prices have surged too fast and could drop anywhere between 10 and 40 per cent are brushed aside on the grounds that an outsourcing boom is enriching a middle class couped up in crumbling homes built decades ago.
‘India has huge potential,’ said Seek Ngee Huat, head of the GIC Real Estate. An investment company of the Singapore government, and one of the world’s biggest property investors, GIC is eyeing developing markets including Russia and Turkey, while cautious about London offices because of steep price rises.
Mr Barge believes Asia has at least two or three years more to run on the upward swing of its property cycle, saying: ‘Mother gravity is always there.’
Mr Seek was wary that defaults on US subprime mortgages could infect the whole financial system.
‘There are certainly financial risks being built up,’ he said.
Meanwhile, Liew Mun Leong, chief executive of South-east Asia’s biggest developer, CapitaLand Ltd, which is launching funds for China and India this year, acknowledged that property investors may not have the best crystal balls.
‘It’s funny but we in the property industry can always predict when the market will turn up, but we can never say when it will turn down,’ he said.
It’s a decade since an asset bubble fed the Asian economic crisis and fears swirl over the US housing market and interest rates, but investors still believe the only way for Asia’s soaring property markets is up - at least for a couple of years.
Asian economies are booming, and property is once again the hot subject of dinner conversations from Tokyo to Mumbai, fuelled by cheap credit, cross-border investment and rising incomes.
Policy-makers fear a boom-and-bust cycle where rising real estate prices fuel inflation and force interest rates higher, leaving households and companies loaded with debt and dragging on economic activity.
But at the Reuters Real Estate Summit this week in Singapore, where some residents are seeing their rents jump 50 per cent overnight, property executives effused about India, despite a doubling in urban land prices since foreign property investment was ushered in two years ago.
Japan also appears to be still hugely popular, although average Tokyo office prices have leapt 25per cent in last two years.
And investors believe government cooling measures will bring order to China’s market, while failing to stem a hunger for homes among the expanding and increasingly affluent middle class.
Justin Chiu, executive director of Hong Kong property giant Cheung Kong (Holdings), said the prospect of ever higher prices was driving Asia’s notoriously sentiment-driven markets. ‘If there are no bubbles, you don’t drink beer. It’s just plain water and there’s no incentive to invest,’ he said. ‘Of course, if you see too many bubbles, you stop pouring.’
Cheung Kong expects mainland China to account for a third of its property earnings by 2010 from about 18 per cent now.
The Asian continent saw some US$94 billion of property investment in 2006, up 43 per cent on the previous year, but barely one-seventh of the global total. And investors show no sign they will stop the flow.
New flavours
Morgan Stanley said last week it had earmarked for 60per cent of a new US$8 billion fund for Asia and Goldman Sachs has raised about the same amount in a couple of funds, according to a source familiar with the matter.
ING Real Estate is raising two US$1 billion funds for Asia, and private equity firm Blackstone is raising US$10 billion to spend globally.
But some market watchers wonder where all the money will be spent, and if rising values will curb investment returns.
Asian commercial property is tightly held by families and private companies, so Peter Barge, Asia chief executive of property consultants Jones Lang LaSalle, believes many investors will have to take on risky development projects. ‘There’s a lot of money on the books, but people are scratching their heads about what to do with it,’ Mr Barge said.
Japan is a perennial favourite in Asia because its US$1.27 trillion of investment-grade property offers huge choice.
Kurt Roeloffs, Asia head for Deutsche Bank’s property unit RREEF, put it at the top of his list followed by China and India. RREEF, one of the world’s biggest property fund managers, plans to spend around 30 per cent of its future private equity funds in Asia, Mr Roeloffs said on Monday. China is drawing Hong Kong developers such as Cheung Kong as well as funds run by ING Real Estate, AETOS Capital and Invesco.
But the new flavours of the month are India and Vietnam, which both rank among the most opaque property markets in the world but promise internal rates of return of 25-30 per cent.
Forecasts that Indian property prices have surged too fast and could drop anywhere between 10 and 40 per cent are brushed aside on the grounds that an outsourcing boom is enriching a middle class couped up in crumbling homes built decades ago.
‘India has huge potential,’ said Seek Ngee Huat, head of the GIC Real Estate. An investment company of the Singapore government, and one of the world’s biggest property investors, GIC is eyeing developing markets including Russia and Turkey, while cautious about London offices because of steep price rises.
Mr Barge believes Asia has at least two or three years more to run on the upward swing of its property cycle, saying: ‘Mother gravity is always there.’
Mr Seek was wary that defaults on US subprime mortgages could infect the whole financial system.
‘There are certainly financial risks being built up,’ he said.
Meanwhile, Liew Mun Leong, chief executive of South-east Asia’s biggest developer, CapitaLand Ltd, which is launching funds for China and India this year, acknowledged that property investors may not have the best crystal balls.
‘It’s funny but we in the property industry can always predict when the market will turn up, but we can never say when it will turn down,’ he said.
Tuesday, July 24, 2007
Property Boom : Will It Last?
Source : The Business Times, 25 June 2007
Is the property boom for real or is it a bubble? What does this say about prospects for the overall economy?
STRONG economic fundamentals, regional stability and positive economic performance in Asia have provided the environment to support continual investor confidence in Singapore.
While increases in prime residential and office nominal values have been substantial over the past 12 months, there was little growth over the nine years before. The effects of inflation over this period should be taken into account. High-end residential prices (in real terms) have increased 4.5 per cent per annum since 1997. This growth seems moderate when compared to Singapore's 10-year average economic growth rate of 5.24 per cent and growth in prime residential properties in other global cities during the same period.
After removing annual inflation of 0.73 per cent, average prime office rent of $11.80 psf has only shown an annual real growth of 0.6 per cent over the same 10-year period. Singapore's prime office rent, we believe, is still competitive compared to other global cities such as London, Tokyo and Hong Kong.
The fundamentals in 2007 are different from 1997s. Asia has restructured, with Singapore emerging in a much stronger position than before. Its in-migration friendly policy and pro-business tax structure further coalesce to support the demand for Singapore properties. Barring unforeseen circumstances, the outlook for the property market remains positive.
- Christopher Fossick Managing Director - Singapore and South East Asia Jones Lang LaSalle
Looks like the real thing
SINGAPORE's economy is still slated to continue growing, year on year. With high-profile projects like Formula 1 and the integrated resorts leading the way, Singapore is gearing towards a level of global reach and relevance never before seen in its history. That is a development that is here to stay.
Because of the economic progression, the subsequent proliferation of property and its demand should be expected. The truth is, ever since its precipitous decline in 1996, the property market has not fully recovered until now. However, the reason why people are jittery is that property prices are recovering faster than most can adjust to.
Healthy moves like the release of land, as well as new developments in the pipeline, will hopefully help to cool the market. Demand needs to be eased so that the property market is steered into a more gradual, controllable and ideal growth. Then, we will see that the higher prices we are witnessing now are just one aspect of a promising economic future.
- Annie Yap CEO The GMP Group
THE property market is indeed flying.
Private residential property transactions with caveats lodged revealed higher transacted prices for districts 4, 9, 10, 11 and 15. These are the prime moving districts now, and I believe there is still a lot of room for prices to move up. Why? For every key event listed below, I expect an above-average movement of $100 per square foot in the districts mentioned to move alongside in the following years:
1. Year 2008 - First in the world! F1 night racing is coming to Singapore. The world will get invited to Singapore, interact with Singapore and invest in Singapore.
2. Year 2009 - First integrated resort to be completed with US$5 billion flowing into Singapore filled with the first wave of tourists which include participants in the Business Travel, Meetings, Incentives, Conventions and Exhibitions (BTMICE).
3. Year 2010 - Second integrated resort to be completed, with another US$5 billion flowing into Singapore filled with the second wave of tourists coming from destinations beyond the nine-hour flight radius of Singapore.
4. Year 2011 - General Election in Singapore: the government will introduce goodies to cultivate goodwill amongst voters to elect the next generation of leaders.
5. Year 2015 - Singapore celebrates her 50th birthday, which will fulfill our Prime Minister's vision for Singapore to become the jewel of the region.
If not now, then when? If not us, then who? Let's do our best to keep the property market flying high!
- Clemen Chiang CEO Freely Business School
I WISH I had a crystal ball to predict the property market. Not for gain or investment, but because I am caught in this boom just when I needed to consider a change in my residence. So I have been looking at it as a consumer.
Most of the conversations I have had these days is mainly about property prices, en-bloc deals, lack of units available and the what-if's. From meeting and chatting with various people, I gather most feel that there is still room for the per-square-foot price to move upwards. They give me the feeling that they are confident the economy is strong and sustainable.
The anticipation of the IRs does give the whole frenzy some kind of timeframe. The F1 buzz does give it an added layer of confidence. The ST Index keeps hitting record levels.
In my opinion, if no major disaster happens, I believe the property market and economic growth look likely to continue.
- Joey Chang CEO/Founder AXS Infocomm
THE property market will stay robust at least till 2012. The growth in the property market is thus backed by economic fundamentals of rising demand, income and jobs. If the overall economy continues to do well, the property market boom is likely to be sustained. Firstly, the Singapore economy has picked up and grows strongly. Our IR project further stimulates economic activities in the next few years. For the next five to 10 years, Asian economies will remain vibrant due to the Olympics 2008 in China, and the rise of Vietnam and India.
Most of the global investments will focus on the growth of the Asian economies. Singapore, being one of the financial centres and a politically stable country, will definitely reap the boom opportunity. Although the property boom reacted aggressively for the past one year, it has not reached the peak yet. I would think that the booming trend will still continue to be steadily up at least till 2012.
- Dora Hoan Group CEO Best World International Ltd
DRIVEN by excess liquidity, asset prices around the world have increased in value simultaneously since 2002. The property boom in Singapore started about a year ago, largely underpinned by the high-end segment, through the en-bloc sales fever. A property boomrequires cheap finance, excess savings in Asian economics, low long-term bond rates and an integrated international financial system. Money supply and credit must continue to grow at an accelerating rate in order to sustain the expansion.
There is no bubble ready to burst, as the boom is supported by a strong economy and political leadership, increased immigrants and foreign talents, perspectives of the IRs and a global city in the making, and a better working relationship with neighbouring countries.
- Tan Kok Leong Principal TKL Consulting
FOR those of us who saw the bubble deflated in the mid-90s, the thought of a bubble looms large on the horizon - and the speed at which prices have gone up seems to bolster this argument.
However this time around, besides the usual participants in the Singapore property market, there is participation from the Middle East, India and China which, together with good worldwide economic growth, excess liquidity and low interest rates, may make markets a bit more robust than before. There is also the IR factor plus the Formula 1 race coming into Singapore next year.
Of course the boom in the property sector brightens the prospects for the overall economy.
The downside will be that the increasing rents that will accompany the property boom will push up the cost of doing business in Singapore, and there may be some businesses in Singapore which may find the cost of doing business out of and in Singapore prohibitively expensive. This is a call that they have to take.
- Vijay Iyengar CEO Agrocorp International
THE current property boom is a natural phenomenon in the economic cycle in Singapore as capital inflows from overseas soak up the prime real estate.
The impending opening of two integrated resorts in Singapore is a key booster to the property boom. Coupled with the government announcement to bolster the population from current 4.5 million to 6.5 million by 2020, this has spurred the developers?confidence of stepped-up demand for housing and office space as well as the increase in MRT and expressway networks.
Barring any unforeseen circumstances, we are not expecting any bust in the property market in the next five years. If any, it would merely be a technical correction.
I am confident that by 2015, when we celebrate the golden jubilee of the independence of our republic, our global city state will be among the top cities in the world.
- Derek Goh Executive Chairman / Group CEO Serial System Ltd
IT's been said that growth in urbanisation, along with the emergence of real estate investment trusts (Reits), will be one of the defining characteristics of the property sector in Asia over the long term. And now, particularly with the imminence of the Bay area projects, Singapore's luxury property market has received yet another rejuvenating shot in the arm and will no doubt continue its bull run into the foreseeable future.
Like any staple industry, property and construction are subject to cyclical swings between peaks and ebbs, but as our economy fortifies itself from strength to strength and the peoples' spending power increases over the years, real estate developers can expect more high-end sales for a sustainable period of time, which readily reflects financial health and also brightens the general outlook.
- T Chandroo Chairman/CEO Modern Montessori International Group
THE soaring property prices are driven by high demand for land and office space due to the influx of foreign investors. Given such strong fundamentals, the current property boom is likely to be for real rather than a mere bubble.
Worth highlighting is the potentially adverse impact that this could have on local SMEs, including those which are providing value-added services to our community, such as childcare and eldercare. As such, the government should help ease the current skyrocketing property prices and in this respect, it is encouraging to note that more state land is being released.
- Sam Yap Executive Chairman Cherie Hearts Child Development Pte Ltd
THE property boom in Singapore is expected as the country will be a place of choice for many rich people in Asia. Multi-millionaires throughout Asia will love to have a residence here. The boom is real and not yet a bubble. The boom is not due to local needs but more from buyers abroad. Properties in the UK shot up for the similar reasons. Many rich English-speaking people throughout the world love to live in the UK too.
The prices may appear to be high in Singapore, but they are not that high compared to prices of properties in London, New York and Hong Kong. The property boom will help to generate the growth of the Singapore economy. It will not affect locals who will enjoy the help of the government in building homes for them at reasonable prices.
- Ng Kong Yeam Group Executive Chairman Sino-America Tours Corporation Pte Ltd
WHETHER the property market can be sustained depends largely on the purchasing power of buyers and on government intentions.
Of late, money flowing in from oil-producing Middle Eastern countries and noveau riche Chinese has made credit cheaper. Singapore is seen as a safe haven to park their money, and buying into properties in an improving economy is one way to preserve capital.
I see the market having some legs and will be strong in the short term; thereafter if the market goes up too high, the government may step in to cool the market. High property prices affect the population's ability to produce more babies.
- Tan Ser Giam Chairman Eastern Navigation Pte Ltd
THE Singapore economy has been recovering for the last couple of years since the Sars outbreak in 2003 put a severe dent on the economy. On the other hand, the Singapore property market started recovering only in the last year or so. As such, I tend to believe that the Singapore economy has built a strong economic base to justify the current property boom. At the same time, the next few years will see huge investments in IRs, etc, and the re-inventing of the Singapore economic model.
The government has already upped the target population to 6.5 million. All this means that there will be more people - more expatriates, more immigrants and more high-net-worth individuals - coming to this island in the next few years. Of course, in any type of asset inflation, speculation cannot be avoided, and this is likely to form a part of any property boom. However, more importantly, there are likely to be many more genuine investors and home buyers who will be attracted to invest and to live in Singapore, and to be part of the new Singapore economic story.
- Wee Piew CEO HG Metal Ltd
Need for caution
IF PRICES skyrocket too rapidly, or if we fail to balance the variables contributing to the economy, the property boom could potentially be a bubble.
Singapore's property market is artificially buoyed by foreign investors from countries such as Indonesia and Thailand leveraging Singapore's stable and growing economy. The last time the property bubble burst was due to the financial crisis, which removed this foreign investor support. This time round, we are not expected to experience the same monetary meltdown to threaten the boom.
However, what we are seeing is an unrealistic expectation from sellers that their properties will keep achieving the stellar heights that everyone is talking about. With respect, perhaps an element of Kiasu-ism?is clouding expectations. This causes an inconsistency in the market and is generally not positive. Growth is a positive attribute to any economy and it is much better for it to be based on fundamental economics.
When the different variables in an economy do not match up, a boom could well become a bust. We are already seeing rising rent rates, against a disproportionate rise in wages, becoming a deterrent to overseas working professionals. I trust the boom we are experiencing will plateau off and we will return to a steady positive growth period instead.
- Charles Reed CEO interTouch
ECONOMIC and infrastructure fundamentals support the Singapore story, and with it the long-term real estate market as a solid asset class for investors. Current speculation, however, is at a runaway pace. While I do not necessarily believe that a crash is looming, it will be inevitable that international companies will take a closer and more critical look when assessing the costs of operating in Singapore.
If unchecked for long, it may drive certain firms away, to the detriment of Singapore. International professionals may also be unwilling to pay inflated rentals, nor do they wish to move every two years due to exorbitant rental increases - and all this because of speculators, many of whom do not even live here? Is that what Singapore wants?
- John Jessen Co-Founder and Managing Director Smith & Jessen
IT's a bubble. While Singapore's economy is sound, recent real estate price increases have more than closed any valuation gap and brought prices more than in line with their fair market value that is reflective of supply and demand.
Why is it a bubble?
1) too many success stories of people flipping property within less than a year,
2) too many people buying without having seen the property? and
3) still supported by low interest rates - people are in search of alternatives.
Points 1) and 2) are pure signs of speculation and who doesn't know about the deep Chinese culture of always hunting for a deal? It works as long as more people join in - but once the first stumbles the whole house of cards will come down. I am waiting for that day - and then might buy. But for ownership, not for speculation.
- Berthold Trenkel Chief Operating Officer, Asia Pacific Carlson Wagonlit Travel
THE lethal combination of the record-breaking rise of the stock market and the ongoing en-bloc fever will continue to drive property prices northwards. This strong push in property prices is indeed a direct reflection of the stellar performance of the stock exchange and the buoyant economy. However, as with all bull runs, what goes up must come down. With more projects scheduled for completion in 2009, there is bound to be a slight correction. The slight correction will however not be a sharp drop as observed in the interim years following 2001.
I am concerned about the effect of having mainly foreign funds that are driving this steep surge in property prices. While we are all in awe of the latest blockbuster transaction pricing reported daily in the papers, we must not forget that the majority of Singaporeans still stay in government housing and this will not have much effect on them. En-bloc fever is also slowly destroying close-knit communities when most of the affected residents are forced to stay in another part of the island, as they will not be able to afford a similar place in the same area any more.
- Benjamin Low Managing Director, Southeast Asia & India Secure Computing
THE prices of property have been shooting up so fast that many ordinary middle-class Singaporeans thinking of upgrading or buying a new home are now priced out of their dream home. Developers of new property projects have found good demand from foreigners and high-net-worth Singaporeans. This all bodes very well for the developers, the contractors, the furniture and furnishing suppliers, and the economy. The upside is that the economy is growing, people are optimistic, and everyone gets a share of the pie.
The downside is that people who are not savvy property players get drawn into this feeding frenzy and may get burnt. This property boom is really a bubble created by savvy developers and people with deep pockets. Having seen the boom and bust of the property cycles in the past, I would advise people who think they can get a slice of this action to be extremely careful and to keep their ears close to the market.
- Fong Loo Fern Managing Director CYC The Custom Shop Pte Ltd
THE current property boom is a testament to the strength and resilience of the Singapore economy having recovered dramatically from the previous downturn. However, unless you're a property developer or a landlord, the boom can have an adverse effect on most businesses, due to rental being a major constituent of operational costs. From services companies to retail and manufacturing, the property boom is increasing the cost of doing business in Singapore, and if left unchecked can hamper the competitiveness vis-a-vis our neighbours in the region.
Across the board, the rise in rents will most likely trickle down to be passed on to consumers. Consumer spending may be hit too as consumers scale back on big-ticket purchases or defer purchases. Ultimately, if left unchecked, inflation may creep in and become a dampener on the overall economy. Hence, the recent move by the government to closely monitor the price movements in the property sector for any possible signs of overheating is applauded.
- J Anton Ravindran Group CEO & Co-Founder Genovate Solutions
THE property market has always been cyclical. Having said that, what is important is not to get swayed away, but rather to remain prudent and invest sensibly.
Globally, Singapore has been ranked as the 14th most expensive city to live in. While this is a strong indication of a positive and booming economy, it also implies that with the rising cost of living, Singapore may eventually lose its attractiveness as a city to work and live in.
- Lars Ronning President, North & South East Asia, India, Australia & New Zealand Tandberg
SINGAPOREANS will have to brace themselves to live with an appreciation in property prices for at least another six months to a year, and for those affected by en-bloc sales, to determine how to get the best out of this trend for another acceptable roof over their heads, moving forward.
While the flurry of property transactions will fuel the already booming economy, my concern is the economy becoming overheated, driving up the costs of living and making it untenable for the ordinary man in the street. At the same time, there is the burgeoning prospect of our economy becoming uncompetitive, with all the concomitant negative effects of investments going elsewhere and ensuing unemployment.
The government can try to regulate the property market to prevent this, but I feel the government can strengthen its approach by enforcing stricter regulations in a timely manner against rampant speculation. However, its hand is weak in relation to high-end luxurious properties, whose demand is price-inelastic, and so long as there are people willing to pay, this will continue to artificially fuel the steady increase in prices.
- Lim Soon Hock Managing Director Plan-B Icag Pte Ltd
MY CONCERN, if I were in the Singapore property market, would be understanding what is driving this boom. There seems to be a lack of fundamental economic criteria that can explain it. My second concern would be the size of the Singapore market - it is not big enough to sustain this growth. Having said that, I wish I had invested early on in the boom so that I would have had time to make some money!
- Ross Wilson Managing Director, Consumer Products and Services, Apac Region Trend Micro (Singapore) Pte Ltd
Is the property boom for real or is it a bubble? What does this say about prospects for the overall economy?
STRONG economic fundamentals, regional stability and positive economic performance in Asia have provided the environment to support continual investor confidence in Singapore.
While increases in prime residential and office nominal values have been substantial over the past 12 months, there was little growth over the nine years before. The effects of inflation over this period should be taken into account. High-end residential prices (in real terms) have increased 4.5 per cent per annum since 1997. This growth seems moderate when compared to Singapore's 10-year average economic growth rate of 5.24 per cent and growth in prime residential properties in other global cities during the same period.
After removing annual inflation of 0.73 per cent, average prime office rent of $11.80 psf has only shown an annual real growth of 0.6 per cent over the same 10-year period. Singapore's prime office rent, we believe, is still competitive compared to other global cities such as London, Tokyo and Hong Kong.
The fundamentals in 2007 are different from 1997s. Asia has restructured, with Singapore emerging in a much stronger position than before. Its in-migration friendly policy and pro-business tax structure further coalesce to support the demand for Singapore properties. Barring unforeseen circumstances, the outlook for the property market remains positive.
- Christopher Fossick Managing Director - Singapore and South East Asia Jones Lang LaSalle
Looks like the real thing
SINGAPORE's economy is still slated to continue growing, year on year. With high-profile projects like Formula 1 and the integrated resorts leading the way, Singapore is gearing towards a level of global reach and relevance never before seen in its history. That is a development that is here to stay.
Because of the economic progression, the subsequent proliferation of property and its demand should be expected. The truth is, ever since its precipitous decline in 1996, the property market has not fully recovered until now. However, the reason why people are jittery is that property prices are recovering faster than most can adjust to.
Healthy moves like the release of land, as well as new developments in the pipeline, will hopefully help to cool the market. Demand needs to be eased so that the property market is steered into a more gradual, controllable and ideal growth. Then, we will see that the higher prices we are witnessing now are just one aspect of a promising economic future.
- Annie Yap CEO The GMP Group
THE property market is indeed flying.
Private residential property transactions with caveats lodged revealed higher transacted prices for districts 4, 9, 10, 11 and 15. These are the prime moving districts now, and I believe there is still a lot of room for prices to move up. Why? For every key event listed below, I expect an above-average movement of $100 per square foot in the districts mentioned to move alongside in the following years:
1. Year 2008 - First in the world! F1 night racing is coming to Singapore. The world will get invited to Singapore, interact with Singapore and invest in Singapore.
2. Year 2009 - First integrated resort to be completed with US$5 billion flowing into Singapore filled with the first wave of tourists which include participants in the Business Travel, Meetings, Incentives, Conventions and Exhibitions (BTMICE).
3. Year 2010 - Second integrated resort to be completed, with another US$5 billion flowing into Singapore filled with the second wave of tourists coming from destinations beyond the nine-hour flight radius of Singapore.
4. Year 2011 - General Election in Singapore: the government will introduce goodies to cultivate goodwill amongst voters to elect the next generation of leaders.
5. Year 2015 - Singapore celebrates her 50th birthday, which will fulfill our Prime Minister's vision for Singapore to become the jewel of the region.
If not now, then when? If not us, then who? Let's do our best to keep the property market flying high!
- Clemen Chiang CEO Freely Business School
I WISH I had a crystal ball to predict the property market. Not for gain or investment, but because I am caught in this boom just when I needed to consider a change in my residence. So I have been looking at it as a consumer.
Most of the conversations I have had these days is mainly about property prices, en-bloc deals, lack of units available and the what-if's. From meeting and chatting with various people, I gather most feel that there is still room for the per-square-foot price to move upwards. They give me the feeling that they are confident the economy is strong and sustainable.
The anticipation of the IRs does give the whole frenzy some kind of timeframe. The F1 buzz does give it an added layer of confidence. The ST Index keeps hitting record levels.
In my opinion, if no major disaster happens, I believe the property market and economic growth look likely to continue.
- Joey Chang CEO/Founder AXS Infocomm
THE property market will stay robust at least till 2012. The growth in the property market is thus backed by economic fundamentals of rising demand, income and jobs. If the overall economy continues to do well, the property market boom is likely to be sustained. Firstly, the Singapore economy has picked up and grows strongly. Our IR project further stimulates economic activities in the next few years. For the next five to 10 years, Asian economies will remain vibrant due to the Olympics 2008 in China, and the rise of Vietnam and India.
Most of the global investments will focus on the growth of the Asian economies. Singapore, being one of the financial centres and a politically stable country, will definitely reap the boom opportunity. Although the property boom reacted aggressively for the past one year, it has not reached the peak yet. I would think that the booming trend will still continue to be steadily up at least till 2012.
- Dora Hoan Group CEO Best World International Ltd
DRIVEN by excess liquidity, asset prices around the world have increased in value simultaneously since 2002. The property boom in Singapore started about a year ago, largely underpinned by the high-end segment, through the en-bloc sales fever. A property boomrequires cheap finance, excess savings in Asian economics, low long-term bond rates and an integrated international financial system. Money supply and credit must continue to grow at an accelerating rate in order to sustain the expansion.
There is no bubble ready to burst, as the boom is supported by a strong economy and political leadership, increased immigrants and foreign talents, perspectives of the IRs and a global city in the making, and a better working relationship with neighbouring countries.
- Tan Kok Leong Principal TKL Consulting
FOR those of us who saw the bubble deflated in the mid-90s, the thought of a bubble looms large on the horizon - and the speed at which prices have gone up seems to bolster this argument.
However this time around, besides the usual participants in the Singapore property market, there is participation from the Middle East, India and China which, together with good worldwide economic growth, excess liquidity and low interest rates, may make markets a bit more robust than before. There is also the IR factor plus the Formula 1 race coming into Singapore next year.
Of course the boom in the property sector brightens the prospects for the overall economy.
The downside will be that the increasing rents that will accompany the property boom will push up the cost of doing business in Singapore, and there may be some businesses in Singapore which may find the cost of doing business out of and in Singapore prohibitively expensive. This is a call that they have to take.
- Vijay Iyengar CEO Agrocorp International
THE current property boom is a natural phenomenon in the economic cycle in Singapore as capital inflows from overseas soak up the prime real estate.
The impending opening of two integrated resorts in Singapore is a key booster to the property boom. Coupled with the government announcement to bolster the population from current 4.5 million to 6.5 million by 2020, this has spurred the developers?confidence of stepped-up demand for housing and office space as well as the increase in MRT and expressway networks.
Barring any unforeseen circumstances, we are not expecting any bust in the property market in the next five years. If any, it would merely be a technical correction.
I am confident that by 2015, when we celebrate the golden jubilee of the independence of our republic, our global city state will be among the top cities in the world.
- Derek Goh Executive Chairman / Group CEO Serial System Ltd
IT's been said that growth in urbanisation, along with the emergence of real estate investment trusts (Reits), will be one of the defining characteristics of the property sector in Asia over the long term. And now, particularly with the imminence of the Bay area projects, Singapore's luxury property market has received yet another rejuvenating shot in the arm and will no doubt continue its bull run into the foreseeable future.
Like any staple industry, property and construction are subject to cyclical swings between peaks and ebbs, but as our economy fortifies itself from strength to strength and the peoples' spending power increases over the years, real estate developers can expect more high-end sales for a sustainable period of time, which readily reflects financial health and also brightens the general outlook.
- T Chandroo Chairman/CEO Modern Montessori International Group
THE soaring property prices are driven by high demand for land and office space due to the influx of foreign investors. Given such strong fundamentals, the current property boom is likely to be for real rather than a mere bubble.
Worth highlighting is the potentially adverse impact that this could have on local SMEs, including those which are providing value-added services to our community, such as childcare and eldercare. As such, the government should help ease the current skyrocketing property prices and in this respect, it is encouraging to note that more state land is being released.
- Sam Yap Executive Chairman Cherie Hearts Child Development Pte Ltd
THE property boom in Singapore is expected as the country will be a place of choice for many rich people in Asia. Multi-millionaires throughout Asia will love to have a residence here. The boom is real and not yet a bubble. The boom is not due to local needs but more from buyers abroad. Properties in the UK shot up for the similar reasons. Many rich English-speaking people throughout the world love to live in the UK too.
The prices may appear to be high in Singapore, but they are not that high compared to prices of properties in London, New York and Hong Kong. The property boom will help to generate the growth of the Singapore economy. It will not affect locals who will enjoy the help of the government in building homes for them at reasonable prices.
- Ng Kong Yeam Group Executive Chairman Sino-America Tours Corporation Pte Ltd
WHETHER the property market can be sustained depends largely on the purchasing power of buyers and on government intentions.
Of late, money flowing in from oil-producing Middle Eastern countries and noveau riche Chinese has made credit cheaper. Singapore is seen as a safe haven to park their money, and buying into properties in an improving economy is one way to preserve capital.
I see the market having some legs and will be strong in the short term; thereafter if the market goes up too high, the government may step in to cool the market. High property prices affect the population's ability to produce more babies.
- Tan Ser Giam Chairman Eastern Navigation Pte Ltd
THE Singapore economy has been recovering for the last couple of years since the Sars outbreak in 2003 put a severe dent on the economy. On the other hand, the Singapore property market started recovering only in the last year or so. As such, I tend to believe that the Singapore economy has built a strong economic base to justify the current property boom. At the same time, the next few years will see huge investments in IRs, etc, and the re-inventing of the Singapore economic model.
The government has already upped the target population to 6.5 million. All this means that there will be more people - more expatriates, more immigrants and more high-net-worth individuals - coming to this island in the next few years. Of course, in any type of asset inflation, speculation cannot be avoided, and this is likely to form a part of any property boom. However, more importantly, there are likely to be many more genuine investors and home buyers who will be attracted to invest and to live in Singapore, and to be part of the new Singapore economic story.
- Wee Piew CEO HG Metal Ltd
Need for caution
IF PRICES skyrocket too rapidly, or if we fail to balance the variables contributing to the economy, the property boom could potentially be a bubble.
Singapore's property market is artificially buoyed by foreign investors from countries such as Indonesia and Thailand leveraging Singapore's stable and growing economy. The last time the property bubble burst was due to the financial crisis, which removed this foreign investor support. This time round, we are not expected to experience the same monetary meltdown to threaten the boom.
However, what we are seeing is an unrealistic expectation from sellers that their properties will keep achieving the stellar heights that everyone is talking about. With respect, perhaps an element of Kiasu-ism?is clouding expectations. This causes an inconsistency in the market and is generally not positive. Growth is a positive attribute to any economy and it is much better for it to be based on fundamental economics.
When the different variables in an economy do not match up, a boom could well become a bust. We are already seeing rising rent rates, against a disproportionate rise in wages, becoming a deterrent to overseas working professionals. I trust the boom we are experiencing will plateau off and we will return to a steady positive growth period instead.
- Charles Reed CEO interTouch
ECONOMIC and infrastructure fundamentals support the Singapore story, and with it the long-term real estate market as a solid asset class for investors. Current speculation, however, is at a runaway pace. While I do not necessarily believe that a crash is looming, it will be inevitable that international companies will take a closer and more critical look when assessing the costs of operating in Singapore.
If unchecked for long, it may drive certain firms away, to the detriment of Singapore. International professionals may also be unwilling to pay inflated rentals, nor do they wish to move every two years due to exorbitant rental increases - and all this because of speculators, many of whom do not even live here? Is that what Singapore wants?
- John Jessen Co-Founder and Managing Director Smith & Jessen
IT's a bubble. While Singapore's economy is sound, recent real estate price increases have more than closed any valuation gap and brought prices more than in line with their fair market value that is reflective of supply and demand.
Why is it a bubble?
1) too many success stories of people flipping property within less than a year,
2) too many people buying without having seen the property? and
3) still supported by low interest rates - people are in search of alternatives.
Points 1) and 2) are pure signs of speculation and who doesn't know about the deep Chinese culture of always hunting for a deal? It works as long as more people join in - but once the first stumbles the whole house of cards will come down. I am waiting for that day - and then might buy. But for ownership, not for speculation.
- Berthold Trenkel Chief Operating Officer, Asia Pacific Carlson Wagonlit Travel
THE lethal combination of the record-breaking rise of the stock market and the ongoing en-bloc fever will continue to drive property prices northwards. This strong push in property prices is indeed a direct reflection of the stellar performance of the stock exchange and the buoyant economy. However, as with all bull runs, what goes up must come down. With more projects scheduled for completion in 2009, there is bound to be a slight correction. The slight correction will however not be a sharp drop as observed in the interim years following 2001.
I am concerned about the effect of having mainly foreign funds that are driving this steep surge in property prices. While we are all in awe of the latest blockbuster transaction pricing reported daily in the papers, we must not forget that the majority of Singaporeans still stay in government housing and this will not have much effect on them. En-bloc fever is also slowly destroying close-knit communities when most of the affected residents are forced to stay in another part of the island, as they will not be able to afford a similar place in the same area any more.
- Benjamin Low Managing Director, Southeast Asia & India Secure Computing
THE prices of property have been shooting up so fast that many ordinary middle-class Singaporeans thinking of upgrading or buying a new home are now priced out of their dream home. Developers of new property projects have found good demand from foreigners and high-net-worth Singaporeans. This all bodes very well for the developers, the contractors, the furniture and furnishing suppliers, and the economy. The upside is that the economy is growing, people are optimistic, and everyone gets a share of the pie.
The downside is that people who are not savvy property players get drawn into this feeding frenzy and may get burnt. This property boom is really a bubble created by savvy developers and people with deep pockets. Having seen the boom and bust of the property cycles in the past, I would advise people who think they can get a slice of this action to be extremely careful and to keep their ears close to the market.
- Fong Loo Fern Managing Director CYC The Custom Shop Pte Ltd
THE current property boom is a testament to the strength and resilience of the Singapore economy having recovered dramatically from the previous downturn. However, unless you're a property developer or a landlord, the boom can have an adverse effect on most businesses, due to rental being a major constituent of operational costs. From services companies to retail and manufacturing, the property boom is increasing the cost of doing business in Singapore, and if left unchecked can hamper the competitiveness vis-a-vis our neighbours in the region.
Across the board, the rise in rents will most likely trickle down to be passed on to consumers. Consumer spending may be hit too as consumers scale back on big-ticket purchases or defer purchases. Ultimately, if left unchecked, inflation may creep in and become a dampener on the overall economy. Hence, the recent move by the government to closely monitor the price movements in the property sector for any possible signs of overheating is applauded.
- J Anton Ravindran Group CEO & Co-Founder Genovate Solutions
THE property market has always been cyclical. Having said that, what is important is not to get swayed away, but rather to remain prudent and invest sensibly.
Globally, Singapore has been ranked as the 14th most expensive city to live in. While this is a strong indication of a positive and booming economy, it also implies that with the rising cost of living, Singapore may eventually lose its attractiveness as a city to work and live in.
- Lars Ronning President, North & South East Asia, India, Australia & New Zealand Tandberg
SINGAPOREANS will have to brace themselves to live with an appreciation in property prices for at least another six months to a year, and for those affected by en-bloc sales, to determine how to get the best out of this trend for another acceptable roof over their heads, moving forward.
While the flurry of property transactions will fuel the already booming economy, my concern is the economy becoming overheated, driving up the costs of living and making it untenable for the ordinary man in the street. At the same time, there is the burgeoning prospect of our economy becoming uncompetitive, with all the concomitant negative effects of investments going elsewhere and ensuing unemployment.
The government can try to regulate the property market to prevent this, but I feel the government can strengthen its approach by enforcing stricter regulations in a timely manner against rampant speculation. However, its hand is weak in relation to high-end luxurious properties, whose demand is price-inelastic, and so long as there are people willing to pay, this will continue to artificially fuel the steady increase in prices.
- Lim Soon Hock Managing Director Plan-B Icag Pte Ltd
MY CONCERN, if I were in the Singapore property market, would be understanding what is driving this boom. There seems to be a lack of fundamental economic criteria that can explain it. My second concern would be the size of the Singapore market - it is not big enough to sustain this growth. Having said that, I wish I had invested early on in the boom so that I would have had time to make some money!
- Ross Wilson Managing Director, Consumer Products and Services, Apac Region Trend Micro (Singapore) Pte Ltd
Monday, July 23, 2007
S'pore Property Market is 'World's Hottest'
Sources : The Straits Times, Thu, Jul 19, 2007
SINGAPORE'S property market is the hottest in the world for major real estate investments, according to a new study by Jones Lang LaSalle (JLL).
Astounding rental growth and rising values were cited as reasons for the strong showing for the first half of this year.
Capital values of prime property here have soared 50 per cent in the past six months alone, said JLL's report, which tracks properties that sell for more than US$5 million (S$7.6 million) worldwide. Most of these are commercial buildings.
The full report will only be out next month, but the firm released a brief summary of some of its findings yesterday.
It showed that property investments around the world rose for the 16th quarter in a row, reaching a record US$382 billion in the first half of this year. This is up 17 per cent from a year ago.
The bulk of these deals were made in the United States, where investments jumped 32 per cent to US$171 billion. In Europe, they rose 4 per cent to US$157 billion.
As for the Asia-Pacific, property investments climbed 12 per cent to US$55 billion.
SINGAPORE'S property market is the hottest in the world for major real estate investments, according to a new study by Jones Lang LaSalle (JLL).
Astounding rental growth and rising values were cited as reasons for the strong showing for the first half of this year.
Capital values of prime property here have soared 50 per cent in the past six months alone, said JLL's report, which tracks properties that sell for more than US$5 million (S$7.6 million) worldwide. Most of these are commercial buildings.
The full report will only be out next month, but the firm released a brief summary of some of its findings yesterday.
It showed that property investments around the world rose for the 16th quarter in a row, reaching a record US$382 billion in the first half of this year. This is up 17 per cent from a year ago.
The bulk of these deals were made in the United States, where investments jumped 32 per cent to US$171 billion. In Europe, they rose 4 per cent to US$157 billion.
As for the Asia-Pacific, property investments climbed 12 per cent to US$55 billion.
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