High home prices in S'pore send buyers abroad

April 20, 2008

High home prices in S'pore send buyers abroad

Investors check out posh units in cities like London, where values have fallen

By Fiona Chan

As the global credit crunch drags on, home prices are falling all over the world, from Britain and Spain to India and Australia.

But in Singapore, property values are proving stubbornly resilient. Private home prices continued to climb 4.2 per cent in the first quarter of the year despite plunging sales and market pessimism.

From an investor's point of view, properties outside Singapore might look more attractive now, agents say.

'The Singapore market has risen substantially over the last two years, and we don't see it dropping dramatically in the short term,' said Mr Sean Parker, the sales director of JL Property Group, which sells overseas properties here.

'But the benefit of that has been that Singaporeans can leverage some of the gains they've made on property here and redistribute them to other areas.'

More and more Singaporeans are looking to markets such as London, New York, Dubai and Australia for investment options, he added. The group has sold more than 100 properties since Christmas, most of them in Australia.

'We think this is going to be one of our biggest years in a long, long time,' Mr Parker said. 'We've seen a significant jump, not just in sales, but also in Singaporeans seeking information to become better-educated investors.'

In a city such as Melbourne, he said, the highest-end properties go for A$1,000 (S$1,269) per sq ft (psf) - a far cry from the $5,000 psf record in Singapore.

Given the current market uncertainty and turmoil, Ms Doris Tan of DST International Property Services advises investors to consider more established markets such as London and New York.

In London, the new Chelsea Apartments in the fashionable Chelsea district has one-bedroom flats that go for �1 million (S$2.7 million) each. That is about the price of a similar unit at Scotts Square in Scotts Road here.

Over in New York, US$1 million (S$1.4 million), or less than US$1,000 psf, secures a one-bedroom apartment in Manhattan's posh Upper West Side or its smart TriBeCa district. In Singapore, that budget would get you only into Holland Village.

There is also a growing trend of older, wealthier Singaporeans buying investment properties that double up as luxurious holiday homes, said Mr Ku Swee Yong, the director of business development and marketing at Savills Singapore.

'They're not just investing,' he said. 'They also want to enjoy the properties they buy, so they're more willing to look at resorts and villas in Thailand and other areas.'

But despite growing interest in foreign properties, not all Singaporeans are out hunting for investment bargains now, Mr Ku added.

'Most people are affected by the bad mood now. They just clam up and pay down their home loans rather than invest,' he said. 'But once the sentiment improves, it's likely people will start comparing - if prices here are $3,000 psf, why not buy in Thailand for $600 psf?'

However, he also cautioned that each market holds its own particular risks for investors.

'In New York or Australia, it might be tax issues, but in Phuket or Bali, it could be procedures Singapore buyers are not familiar with,' he said.

'For our customers who buy Thai and Indonesian properties, they almost always can't get loans and have to pay in cash.'

fiochan@sph.com.sg


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LONDON: Exclusive condos along the Thames

AQUARIUS HOUSE
St George Wharf, London
England

Touted as London's most exclusive riverside apartments, Aquarius House is the latest instalment in a new large-scale development along the Thames known as St George Wharf.

The 14-storey tower, expected to be completed in 2010, sits next to Vauxhall Bridge on London's South Bank. The increasingly gentrified neighbourhood is near the Houses of Parliament and a gay village.

St George Wharf itself offers on-site facilities such as a supermarket, dry cleaners, a medical centre and restaurants.

Prices for the 85 one- and two-bedroom apartments in Aquarius House start at �399,000 (S$1.06 million), or �800 per sq ft (psf).

Over here in Singapore, apartments overlooking the river at trendy Robertson Quay have been sold recently at prices ranging from $1,300 psf for Robertson 100 to over $2,000 psf for The Pier at Robertson.



SHANGHAI: Inner-city living in an ultra-hip district

RESIDENCE 8
Xintiandi, Shanghai
China

You could be Chinese actress Gong Li's neighbour in this brand-new condo in Shanghai's stylish Xintiandi area, all for the same price as an apartment in Holland Village.

Residence 8 offers one- and two-bedroom units as well as 14 penthouses, each featuring furniture from Italian design giant B&B Italia and Bang & Olufsen audiovisual systems.

Each of the 308 apartments also comes with Poggenpohl luxury kitchens, built-in Gaggenau appliances and 47-inch LCD TV sets.

Gong Li will be one of the development's first residents when it is completed next year.

The units range in price from eight million yuan (S$1.55 million) to 13 million yuan (S$2.5 million), averaging 9,290 yuan per sq ft (psf).

Xintiandi, Shanghai's ultra-hip pedestrian district, carries echoes of Holland Village, where apartments are going for $1,200 to $1,600 psf.



HONG KONG: Pricey areas but always sought after

JARDINE SUMMIT
Tai Hang district
Hong Kong

Hong Kong may be the only Asian market where high-end home prices have skyrocketed as much as in Singapore in the last year.

Recently, the ever-popular pursuit of luxury homes in the financial hub has intensified, given tight supply and investors keen to seek safe capital havens.

The traditionally pricey districts of Tai Hang and Jardine's Lookout have the highest occupancy rate. Prices rose 8.5 per cent in the last quarter of last year and rents 3.1 per cent, noted CB Richard Ellis.

Until recently, Jardine's Lookout held the record for the priciest penthouse, a HK$33,000 (S$5,722) per sq ft (psf) unit at Cheung Kong's luxury project The Legend.

Nearby, brand-new units at Jardine Summit go for HK$12,000 to HK$13,000 psf or at least HK$14 million each, a level similar to that for units at Cairnhill Crest here.

Rents are also comparable, at HK$35 to HK$45 psf.



JAKARTA: Luxury living in a mix of choices

THE ST MORITZ
Jakarta
Indonesia

This US$1 billion (S$1.4 billion) mixed development by the Lippo Group boasts the tallest tower in Indonesia and three blocks of luxury apartments. Each block is targeted at a different market, and units are sized and priced accordingly.

Prices start at US$90,000 for a 947 sq ft unit at The St Monaco Tower - less than a Housing Board flat would cost in Singapore. The luxury part comes in at the top end of the project: A 14,000 sq ft penthouse at The St Moritz Tower is going for US$10 million, making it the country's largest and most expensive penthouse.

Jakarta is seeing a rise in the supply of high-end homes that has led to prices flattening out. But The St Moritz is part of an upcoming trend of large mixed developments that have proved very popular.



PHUKET: Villas with guaranteed rentals

BANYAN TREE RESIDENCES
Laguna Phuket, Phuket island
Thailand

In Singapore, $2.5 million is barely enough to buy a semi-detached house in the East Coast.

In Phuket, that could get you a 4,000 sq ft, fully furnished villa with a private lap pool and jet pool.

Located next to the Laguna Phuket Golf Club, with beaches, restaurants and spas nearby, the villas are strictly for investment purposes.

Banyan Tree rents them out to tourists on behalf of the owners, who get part of the rentals. Rents average US$1,800 (S$2,432) a night.

Buyers can choose a 6 per cent fixed return or 33 per cent of the net room revenue. They also get to use the villas for 60 days a year.

Most of the villas have been sold. Those still available range in price from US$1.7 million (S$2.3 million) to US$3 million (S$4.1 million).



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