Luxury Properties In Singapore

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In Singapore, there was a boom period earlier this year and in the last quarter of last year. A survey in Q1 2008 showed that Singapore was considered the best place in Asia to buy real estate. Yet further to this, leisure and tourism investments, as well as the Singapore property market generally, had taken a turn for the worse. Sales have been sluggish in recent months, however office units and hotels set record figures last year. With several luxury projects due to be completed in the near future, there is hope yet for Singapore's property market.

Singapore was widely recognized to be in a boom period earlier this year, however, the downturn of REITs in the end of the first quarter were the predictors of a slowdown in the market generally, and some have been disappointed by the property market's slowness. Businesses with high yields, valuable assets or that are greatly discounted from book value have been feeling vulnerable for some time now.

The lethargic growth of this year contrasts with the excellent results achieved by developers last year, when more than 14,000 homes were sold in the first half of 2007. However, one of the key factors in the downturn in the property market was the government's decision to end deferred payment schemes, making property less accessible to many buyers. In fact, in January, only 396 homes were sold by property developers. However, there are several factors which bode well for the Singapore property market as the second half of 2008 gets into full swing.

One of these factors is the low unemployment in Singapore currently. It will be necessary to bring in foreign workers to fill both skilled and unskilled positions, and this population growth from expatriates will help fuel property demand.

Another very important factor in Singapore's return to a favourable property market is the interest rates currently. They are just under 2%, which should help fuel demand for property, especially in a global climate of increased cost of borrowing.

Another factor is the optimism with which some developers are carrying out their business, on the back of some very strong sales results for particular developments. One branded condo development in Singapore recently sold for $4,000 per square meter, as opposed to the $2,500 per square meter that such a development would fetch without a brand name attached. One developer in Singapore, encouraged by these figures, is now set to offer two units, at a sale price of around $30 million.

Neighbouring areas in Asia are doing well in the luxury property stakes also. Property developers such as Value DesignBuild and Brigade Hospitality Services in India are now diversifying into spas and resorts away from the main cities. They say there is a huge scope of business and demand in the leisure and hospitality investment sector. Given that there is only so much room for expansion in the residential and commercial sectors in the cities, luxury property will be a hot item in India's real estate scene also.

Nearby in Thailand, beachfront properties are appreciating at a rate of 20% per year, according to real estate salespeople.

The tourism industry in Singapore is currently doing well, and the country aims to have 17 million visitors by 2015. In 2007 a record 10 million visitors came to Singapore from overseas (except India), with large numbers of Indians also visiting, as usual. These tourists will fuel demand for luxury short-term accommodation, as well as the luxury properties in Singapore which should be sought after by longer term tenants.

About the Author

Gregory Smyth is an independent author providing assessment and comments on leading International Property Consultants in Asia and Greater China, especially CB Richard Ellis.

Article Source : ClickEasyArticles.com

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