Register as a MEMBER today and receive our FREE Special Report!








• Recently Written

  • Weekend launch for BelleRive off Bt Timah
  • StanChart marks 150 years with new home loan deal
  • Now it’s property counters
  • Will property recover faster than expected?
  • Crisis will drive more Mid-East funds to S’pore
  • Aussie fund sees growth in Asian projects
  • Financing your overseas home
  • Asian markets face an even more turbulent ride
  • Singapore is Asia’s most liveable city
  • Australia beckons

• Categories

  Real Estate News in Singapore

• Archives

  • May 2009
  • April 2009
  • March 2009
  • February 2009
  • January 2009
  • December 2008
  • November 2008
  • October 2008

• RSS Subscriptions

  RSS
  
  
  
  
  
  
  
  
  
  
  

SING Holdings is launching its latest residential development, BelleRive, this weekend at indicative prices of between $1,325 and $1,464 per sq ft. The listed developer is also extending an interest absorption scheme to all buyers.

BelleRive, located off Bukit Timah Road between Balmoral and Robin roads, is a 15-storey apartment tower with a total of 51 units. Its two and three-bedroom units range from 958 sq ft to 1,679 sq ft.

The two penthouses, at 2,734 sq ft and 3,735 sq ft, each have a private roof garden, swimming pool and pool deck. The development boasts fittings and finishes from notable brands including kitchen appliances by Gaggenau and imported kitchens by Hoffen.

Project facilities include a swimming pool, barbecue area, children’s playground and gymnasium. Project completion is scheduled for end-2010. Sing Holdings chief executive Lee Sze Hao said yesterday that about 50 per cent of the freehold project was sold during a recent preview.

BelleRive is within walking distance of the upcoming MRT station in Stevens Road. It is also reasonably close to several schools including the Singapore Chinese Girls’ School, Anglo-Chinese School (Barker Road), Raffles Girls Secondary School and St Joseph’s Institution.

Sing Holdings’ previous projects include 38 Draycott Drive, a high-end apartment block in the Ardmore Park area, and an office building named EastGate in the East Coast area.

Residential projects in the pipeline are Meyer Residence on the East Coast, an 85 per cent-owned project, and a joint-venture project called The Laurels at Cairnhill.

Source: Business Times

NOTE: If you would like us to assist you in your property needs, you can contact us immediately by Clicking Here or simply visit our website at Luxury Singapore Homes to see our new launches today!

 Print This Post
 Email This Post

STANDARD Chartered (StanChart) in Singapore is the latest bank to unveil attractive home loan packages for homebuyers and owners, as interest in residential property purchases continues to pick up.

It is introducing a package with a low interest rate of 1.5 per cent per annum for the first year. For the second year onwards, customers will pay an annual rate equivalent to the three-month Singapore Interbank Offered Rate (Sibor), plus 1.35 percentage points.

The promotion, which applies to any new mortgage taken up with the bank from yesterday till June 15, is part of StanChart’s 150th anniversarycelebration. It will also throw in freebies like free valuation, legal subsidy of up to $2,000, and free fire and home content insurance. There is also an additional perk for priority banking customers who hold StanChart’s Visa Infinite card.

A quick check shows StanChart’s offer to be one of the more attractive ones in town, particularly if Sibor continues to languish at well below 1 per cent.

A comparable package by Maybank - touted by the bank as the lowest three-year fixed rate home loan in town - fixes its first, second and third year rate at 1.6 per cent, 2.2 per cent and 2.9 per cent, respectively. There is no minimum loan amount required for application.

For StanChart, the minimum loan quantum is $100,000, while the lock-in period is just two years. Said StanChart retail banking products general manager Dennis Khoo: ‘With this offer, they (customers) can enjoy more flexibility in their finances to be more agile and responsive to market changes.’

Source: The Straits Times

NOTE: To find out more about the home loan packages, visit Home Loan today!

 Print This Post
 Email This Post

BANKS gave way to property counters yesterday as the extraordinary share market rally stayed in high gear. The property sector’s big guns rocketed and helped the market jump almost 63 points to 2,241.6. The numbers from two high-fliers were stunning. Keppel Land, which made a cash call late last month to raise $712 million, was the biggest gainer in percentage terms, rising 56 cents, or 25.2 per cent, to $2.78. It has gained 66.47 per cent in just five days.

City Developments looked a slacker in comparison but still surged 85 cents, or 11.3 per cent, to $8.35. The trading volumes of some property counters, including City Developments and CapitaLand, swelled by more than 40 per cent each yesterday.

The FTSE ST Real Estate Index has surged 59.5 per cent since its March lows, outperforming the benchmark Straits Times Index, which is up 53.9 per cent. Some observers have described the recent stock market resurgence as a ‘liquidity rally’ - one driven by new flow of capital into stocks.

‘I think it’s simply because the sector is so under-owned over the last few quarters,’ said CIMB-GK property analyst Donald Chua. ‘Once the market picks up and liquidity comes in, many fund managers have no choice but to buy into the sector.’

But he adds that fundamentally, there has been no changes in the sector, although there might be some talk of sales volumes picking up. ‘I don’t think you can conclude that property prices have stabilised and I think that’s the key thing to look out for before you can say anything has changed,’ he said.

Many developers have cautioned in earnings statements that this year will remain challenging as the local property market remains cautious. Fund managers have been steadily moving money back into equities, helping to ignite a rally in stock markets around the world.

Mr David Lee, managing director of Ferrell Asset Management, a Singapore-based hedge fund, said in an interview with The Straits Times this week that he had put money into property stocks at the start of this year. ‘It was the best time to increase Asian allocation in risky assets such as property stocks,’ he said, adding that real estate shares had been lagging. ‘Sentiment was very bearish; valuations of some stocks became very attractive,’ he said. ‘The situation is a lot better now. For example, refinancing risk of properties is improving. People feel a lot better now with easier credit and better liquidity.’

A recent UBS report said the Singapore economy bottomed in the first quarter, making this a good time for investors to buy property and banking stocks as they are likely to be the best-performing sectors in the six months to come.

Yet investors have been positioned ‘exactly the other way round’ with heavier allocations in defensive stocks like telecoms, said UBS strategist Tan Min Lan.

While rocketing share prices took the headlines, CapitaLand also offered some good news from the front line of sales. It has collected payment for almost all the 542 units sold in its RiverGate condominium at Robertson Quay, which was completed in March.
About 98 per cent of the buyers have paid up, with collection of the remaining payments still ongoing. Most buyers opted for the deferred payment scheme where they put up a 20 per cent downpayment and delayed the remaining payments until completion.

Source: The Straits Times, by Yang Huiwen & Fiona Chan

 Print This Post
 Email This Post

MARKET turning points are very hard to spot. A recent example was the March 9 market bottom. Then, the world seemed a bleak place: we were in for a prolonged depression; banks were going to fail; many companies were going bankrupt and millions were going to lose their jobs and stay unemployed for years. That period also coincided with a spate of bad news from the Chinese companies listed in Singapore - the so-called S-chips. The cash wasn’t in the banks. The founders were losing control over their companies because they’d pledged their shares to financial institutions. Profit was overstated, and the companies’ status as going concerns was in question. One by one, the S-chips were getting suspended.

Under the never-ending onslaught of bad news, many investors threw in the towel and cashed out. By February, cash sitting on the sidelines was at its highest in more than 10 years. Government statistics showed that the amount of deposits of non-bank customers with domestic banking units and deposits with finance companies was equivalent to 99 per cent of the aggregate market value of all the stocks listed on the Singapore Exchange (SGX). The previous peak was in 2002, when the cash/market cap ratio was 91 per cent.

History has shown that such a high level of cash holdings portends strong upside in the equities market. The rebound did eventually come - almost out of the blue - and took many by surprise. The recovery - fuelled by sightings of ‘green shoots’ in the economy - has lasted eight weeks and equity prices have gained more than 40 per cent. But through it all, many analysts and
fund managers still doubt the sustainability of the recovery.

So what do we make of the projections of most property consultants that private residential property will slump by 25-35 per cent this year? The forecasts suggest more downside for the rest of the year given that prices fell ‘only’ 14.1 per cent in the first quarter. But like the pundits in the stock market, there is a possibility that these consultants too will miss the market turning point. For one, the stock market leads the property market by 4-8 months. If the stock market remains buoyant, then there is a
probability that the property market too will stabilise. And, as noted earlier, there is a lot of cash waiting to get into the market.

Already, there are signs that US real estate - the source of the current global financial crisis - is recovering. According to The New York Times, Sacramento (among the first US cities to fall victim to the real estate collapse) has seen investors and first-time buyers out in force competing for bargain-price foreclosures. Sales are up 45 per cent from last year, and the vast backlog of inventory has diminished. Progress is also visible in other hard-hit areas.

If so, one shouldn’t be too quick to dismiss the hope that the US property slump, just like the stockmarket slump, may end sooner than the doomsters think.

Source: Business Times

 Print This Post
 Email This Post

(SINGAPORE) Singapore and the region will attract more funds from the Middle East as the global financial crisis has underscored the importance of diversification, says Monetary Authority of Singapore (MAS) managing director Heng Swee Kiat.

In an interview with The Business Times, Mr Heng said the ability of Islamic banks to mobilise savings and deploy them productively will make Islamic finance more relevant.

This week, Singapore is hosting the 6th Islamic Financial Services Board (IFSB) Summit, an annual event that discusses key issues and developments in the regulation and supervision of Islamic financial services.

Mr Heng said that the Islamic finance sector faces some problems as a result of the financial crisis, but growth will resume in the medium term, bolstered by a trend in the financial world of going back to basics.

‘Greater Middle East flows moving to Asia will happen for a number of reasons,’ he said. ‘First, the financial crisis underscored the basic point of the need for risk diversification, and this will accelerate.

‘Second is the opportunity for investments. A lot of investment is going to be driven by economic growth and dynamism in this region.

‘Third, the capabilities for managing that flow have been increasing, over the years.

‘The opportunities for joint ventures - the sharing of management know-how and technology network - have grown very significantly. The talent pool has grown over the years.’

Many Asian countries are pushing to offer Islamic financial services, an estimated US$1 trillion industry. As part of its financial liberalisation strategy, Malaysia said last month it will let foreign law firms set up offices to advise on Islamic finance - a move opposed by the country’s Bar Council. Malaysia will also give out two foreign Islamic banking licences.

In February, Hong Kong said it will amend its tax laws in 2009-2010 to promote Islamic finance. And Korea is one of two countries that is showcasing its Islamic finance initiatives at this week’s IFSB Summit.

Since 2005, Singapore has taken several steps to develop Islamic finance. MAS’s approach has been to create a level playing field. It has refined banking regulations and put in place a tax framework to facilitate the growth of Islamic finance.

Singapore’s first Islamic bank - the Islamic Bank of Asia (IB Asia), a joint venture between DBS Bank and 33 Middle East investors - was launched in 2007.

Eleven Middle East banks, two Middle East reinsurers and two Middle East exempt fund managers are now operating in Singapore.
MAS’s Mr Heng said one outcome of the financial crisis will be a return to basics, and that will increase the relevance of Islamic finance.

‘I made a comment recently when I was in China, that in the case of the US and Europe, the financial systems have run too far ahead of the real economy,’ he said.

‘Some parts of the systems have become detached in supporting productive economic activity (and) turned very speculative. Complex securitisation was being done - not quite the economic functions they were intended to serve.’

But in Asia and the Middle East, where economic development has been rapid in the past 20-odd years, financial systems had yet to catch up, Mr Heng said.

This is partly why many Asian financial institutions did not run into problems - they had real economic opportunities to pursue.
In the medium term, new opportunities will arise as the symbiotic relationship between financial services and real economic development is restored, Mr Heng said.

‘A key Islamic finance precept is that finance has to support real economic activity, support productive uses - and make sure that it is not used for speculation.

‘I think this is a very important precept that will create momentum for growth once we get over this bump. At the same time, when we look at the Middle East and East Asia when the (global) economy recovers, demand for oil and natural resources will grow, and that will continue to generate wealth in these two regions.’

As for current financial systems, whether it’s conventional finance or Islamic finance, risks remain high. ‘Clearly, the global financial system is still fragile,’ Mr Heng said. ‘We (MAS) have stepped up significantly our surveillance in two aspects.’

At macro-economic level, MAS is more closely monitoring indicators such as the overall growth of credit and corporate lending in different areas. It has also stepped up supervision of financial institutions. ‘We have stepped up our supervision of individual financial institutions, local entities as well as foreign entities, ensuring that boards and management are closely looking at their risks and operations, and that they have complied with the rules and regulations and taken relevant mitigation measures,’ Mr Heng said.

‘The other area is working with various industry bodies to step up investor education. I think for the next 12-18 months, we need essentially to be on high alert - not just MAS but all financial institutions, financial intermediaries as well as investors - so we can navigate this very uncertain period successfully.’

Source: Business Times, by Siow Li Sen

 Print This Post
 Email This Post

(SYDNEY) A US$5 billion Australian pension fund is looking at property development projects in Asia that it believes will allow it to capture future growth when an economic recovery kicks in, its chief executive said yesterday.

Hostplus, a pension fund for hospitality industry employees, has made investments in projects in Singapore and is considering others elsewhere in Asia, betting that developments rather than fully-leased properties will give it an advantage when demand for offices and retail space picks up.

‘In Malaysia, we are looking at a retail opportunity with one of our investment partners. We have a number of opportunities that are presenting themselves in Japan in the commercial sense, in the industrial area,’ Hostplus CEO David Elia told Reuters in an interview.

Hostplus seeks an internal rate of return (IRR) of 12-15 per cent for property development projects, Mr Elia said. In his opinion, the worst may be over for Singapore’s economy. ‘It’s probably the first country that’s probably been hardest hit in terms of the Asian region. We suspect that it’s probably the first country to come out of it as well,’ he said. ‘We would like to think that once the economy recovers… we will be well positioned to take advantage of all that.’

Mr Elia noted that the supply of new buildings worldwide was limited due to tight lending, and construction costs have come down substantially, pointing to good opportunities for investing.

Australian pension funds have been hit hard by write-downs on unlisted property holdings as property value continues to fall, and Mr Elia said Hostplus had had to write down some of its assets. It allocates 18 per cent of its funds to property, 4 per cent of which is in overseas markets. ‘Because we have strong liquidity coming in, it does put us in a privileged position to negotiate tremendous outcomes. ‘There are fantastic opportunities for our members going forward,’ Mr Elia said.

Source: Business Times

 Print This Post
 Email This Post

Before you get tempted by that one-of-a-kind apartment in Melbourne or that previously unaffordable flat in London, it would be a good idea to check out your financing options. Depending on where their properties are located, investors can head straight
for a lender in Singapore or approach one that can refer them to the relevant overseas branch. They can also try to find a lender in the country where the property is located, but this can be a waste of time as most lenders will not lend to a non-resident, experts said.

Banks such as Standard Chartered Bank and United Overseas Bank (UOB) will put investors in touch with their teams in the relevant markets. UOB, for instance, offers loans for overseas homes in Malaysia, Thailand and Shanghai, China - places which may not be covered by some foreign banks.

Standard Chartered Singapore can leverage on its global footprint. But, for those looking to invest in offshore homes in Australia, the United States, Canada and Europe, including Britain and France, it will refer them to Lloyds TSB Bank, an arrangement it has maintained since 2006.

Lloyds TSB and banks such as the National Australia Bank offer overseas property loans from Singapore. The former, in particular, has the widest jurisdiction when it comes to such loans as it covers 11 countries including Britain, France and New Zealand.

Overseas property loans can be taken in various currencies, but you face quite a bit of risk - including possible capital losses - as they will be subject to currency fluctuations.

‘The Australian banks with operations in Singapore had a bad time last year as many of their clients opted for Singdollar lending and got caught out on the currency exchange, losing thousands of dollars in equity and causing many margin calls,’ said Mr Steve Douglas of Smats, an Australian property finance and taxation portal.

‘Some of these banks even had to stop lending for a while, not because of a bad property market but because of bad lending practices as they did not properly inform their clients of the real risks of multi-currency lending.’ Mr Barry Lea, chief representative of Lloyds TSB Bank, said: ‘Generally, you can’t go hugely wrong matching your loan with your fixed or liquid assets. If you have the option to switch between the two, you will have the flexibility to mitigate your risks.’

Because of the global credit crunch, taking an overseas property loan is not as easy as in the past. ‘Banks have generally tightened their loan approval criteria in view of increased risks due to the ongoing financial crisis and the fall in property prices,’ said the founder of www.HousingLoanSG.com, Mr Dennis Ng.

Instead of keeping to a typical loan-to-valuation ratio of 70 per cent to 80 per cent in the past, banks are now generally more comfortable with giving a loan for up to 60 per cent to 70 per cent of a property’s valuation, experts said.

Mr Lea said the ratio can be as low as 50 per cent in some US states. It rises to 65 per cent to 70 per cent in Australia, New Zealand and Britain and can possibly be higher for single-currency loans from some lenders, he said.

A property’s valuation is also something investors should watch out for as prices in many markets are still falling. ‘Any distressed sale of properties might affect sentiment and the market valuation of properties,’ said Mr Ng. He advised investors to make sure the banks can match valuation to the purchase price as the buyer has to pay for any shortfall between the price and valuation.

Investors should apply for in- principle approval to ensure that they have a lender’s support before they buy an overseas property, said Mr Lea. ‘It will also save them time and trouble if they intend to go overseas to look for a property and they can wave it under the nose of a vendor so as to substantiate their means.’

Fees for certain countries have also increased somewhat over the last 12 months or so, to reflect a risk premium and higher capital cost of funds, said Mr Lea. For instance, the arrangement fee has gone up for British and Canadian properties, he said.

Often, investors will invest a lot of their energy in finding the right overseas property and then have little inclination to shop around for that huge overseas property loan, said Mr Lea.

Given the level of uncertainty due to the economic downturn, investors should be even more careful in considering all aspects of borrowing, and not just the interest costs, he said.

Source: The Straits Times, by Joyce Teo

 Print This Post
 Email This Post

SWINE flu marks the bursting of yet another bubble. The latest airy hope to
be deflated is over the world’s ability to withstand the occasional pandemic
risk. We did it with Sars in 2003 and avian influenza in 2005. That was
before swine flu and the World Health Organisation’s declaration that it
isn’t containable. Forget surgical marks. Gas masks, anyone?

The question now is whether this disease will morph into an international
disaster that will devastate markets.

Asia’s future is also affected by the bursting of a second bubble: hedge
funds. Almost 20 per cent of Asia-Pacific hedge funds closed in the 15
months to March, with that rate set to accelerate in today’s dire economic
conditions, according to London-based magazine AsiaHedge.

If swine flu really is the Big One, the effects of these two bubbles will
converge, dragging down asset prices and deepening the recession.
The fragility of the global economy raises expectations for how public
officials will handle swine flu. Any hint of incompetence will hurt markets
early and often.

All this spells trouble for the world’s most-populous region. This is also
the most economically promising area, one on which corporate executives in
New York, London and Johannesburg are depending for future growth and
profits. Asia, with its teeming populations, crowded cities, high poverty
and spotty access to health care, must be considered a future hot zone.

That’s why even though Mexico is the epicentre, Asian governments are moving
fast to prepare for outbreaks. The region’s vulnerability will grow
exponentially over time.

Even without swine flu, economies aren’t close to bottoming. The best-case
scenario is for growth to level off at very low levels. Stimulus packages of
about US$2 trillion globally aren’t enough to offset the wealth destruction
of the past 18 months. Mark Matthews, a strategist at Fox- Pitt Kelton in
Hong Kong, puts the loss in equities alone at US$30 trillion.

The credit crisis caused the shuttering of 129 Asia-region hedge funds in
2008. That’s the most in at least eight years and more than double the
number in 2007. An additional 17 closed funds in the first quarter. Hedge
funds around the world are reeling after losing 19 per cent on average last
year and investors withdrew US$155 billion, the worst performance since
Chicago-based Hedge Fund Research Inc began keeping records. Investor
redemptions have soared since Lehman Brothers Holdings folded in September.

The health of Asia’s hedge funds is less interesting than the forces that
drove the industry’s growth. At the end of 2008, there were about 930
Asia-region hedge funds, according to AsiaHedge editor Paul Storey. In 2000,
there were about 160 Asia hedge funds. It was always a bubble waiting to
explode.

At the time, investors said the sudden rush to start hedge funds in Hong
Kong, Japan and Singapore reflected Asia’s maturity. That was true to an
extent. It was more about Asia’s rapid growth and its underdeveloped
markets. The region was rife with the inefficiencies that speculators
exploit. For anyone aiming to profit from disparities in the prices of
similar bonds or other assets, Asia was an obvious place. Then there was the
bandwagon effect. There were suddenly too many aggressive investors pursuing
similar strategies, thus cannibalising the benefits. And when markets were
booming in the mid-2000s, lots of people who went to work at hedge funds had
little hands-on experience. ‘If he can get rich, so can I’ was the dynamic
that pervaded the industry.

Some good may come of the current shakeout. Kirby Daley, a senior strategist
at Newedge Group in Hong Kong, says the managers who survive will represent
an industry that is stronger and more diverse in strategy. Still, it’s
impossible to say at this moment how many will be left.

Swine flu deepens the plot. It’s a big concern that health officials are
giving up on containment already. They are focused on treating patients and
strengthening preparations for outbreaks. The WHO raised its global pandemic
alert to the highest since the warning system was adopted in 2005.

Asian markets plunged during the 2002-2003 outbreak of severe acute
respiratory syndrome. Sars killed 770 people, a number that belies the
hysteria that swept the region. In reality, Sars was the health equivalent
of the Y2K computer bug in 1999. And yet it took a toll on Asia’s economies
and markets.

Swine-flu concerns may also turn out to be overdone. If not, expect markets
in Asia to be in for an even rougher 2009 than seemed possible just a couple
of weeks ago. And expect more hedge funds to go bust.

Source: Business Times, by William Pesek Jr

 Print This Post
 Email This Post

SINGAPORE has risen six places in a global ranking of cities with the highest quality of living, overtaking cities such as Paris in France and Honolulu and San Francisco in the United States.

At 26th place, the Republic also surpassed all its Asian neighbours to be the region’s best performer in the latest Worldwide Quality of Living Survey by human resource consultancy Mercer.

As the icing on the cake, Singapore also topped Mercer’s list of cities with the best infrastructure in the world. It proved superior in various areas, including electricity and water supply, telephone and mail services, public transport, traffic congestion and range of international flights from local airports.

Although it is often taken for granted, infrastructure ‘has a significant effect on the quality of living experienced by expatriates’, said Ms Cathy Loose, Mercer’s Asia Pacific global mobility leader.

The development of Marina Bay and Sentosa Cove as new waterfront living areas appear to have boosted Singapore’s position in the rankings.

‘Singapore already has excellent housing, but now its new ocean-front and seafront living options have allowed the ranking to move even higher,’ said Mr Derrick Kon, Mercer’s Singapore global mobility leader.

He added that the ‘high-quality houses and apartments’ that are available for rent and the ‘excellent selection of appliances and furniture’ for residents definitely helped elevate Singapore’s quality of life.

The other factor that contributed to Singapore’s higher ranking is the presence of ‘many good schools’ in the city, said Mr Kon.

‘Singapore has always had a lot of good schools and international schools, but now there are also more private schools offering university degrees,’ he said.

‘If expatriates come here with their children, this is one area they would be looking at, and in Singapore they would have a lot of options, with international programmes and university programmes.’

Singapore’s strong position in quality of life rankings such as these could stand the nation in good stead in the current financial crisis, said Mr Mark Ellwood, managing director of Robert Walters, another human resource consultancy.

With companies looking to cut costs, many are reducing the number of international assignments and localising their expat compensation packages where possible, which means not giving out the ‘hardship’ allowances or benefits that are offered to expats who have to live in cities with a lower quality of life.

‘There is perhaps less of an argument these days that Singapore is a hardship posting, so you don’t have to give many expat benefits in terms of additional bells and whistles,’ said Mr Ellwood.

Singapore is the only Asian city on the top 100 list that managed to increase its ranking this year, with the rest largely maintaining their previous positions.

China’s capital, Beijing, moved up three places from 116 to 113 due to public transport improvements stemming from the Olympic Games last year, but Bangkok in Thailand and Mumbai in India both dropped in the rankings amid worsened stability and security.

Globally, the Austrian city of Vienna overtook Switzerland’s Zurich to boast the best quality of life this year. European cities continued to dominate the top positions in the ranking, amid a sprinkling of Canadian and American cities.

Mercer publishes this list annually to help multinational companies determine an appropriate amount of compensation for expatriates sent to work in difficult locations.

Source: The Straits Times, by Fiona Chan

 Print This Post
 Email This Post

Australia is reappearing on investors’ radar screens, with homes there looking more affordable to overseas investors now that the Aussie dollar has weakened from a year ago.

‘Australia’s banks are still well capitalised and in a global economy with a lot of high-risk investments, the Australian market is comparatively low-risk, which is what many investors are looking for right now,’ said IP Global managing director and founder Tim Murphy.

But the window of opportunity may not last. After Lehman Brothers collapsed, the Aussie dollar fell to below par against the Singapore dollar, fetching about 92 Singapore cents. One Aussie dollar now fetches some S$1.065, compared with S$1.27 a year ago.

‘Analysts are predicting the Australian dollar will become stronger as investor risk appetite returns, making it important to borrow in the currency you are buying in and let the rental service the mortgage payments,’ said Mr Murphy.

MLG Australia managing director Marcus Gilmore said there has been a major influx of activity this year and mostly in the lower end of the property market, thanks largely to first-time home buyers’ grants. (The high-end market has slowed considerably.)

‘Any product under A$500,000 (S$530,750) in Sydney should be seen as good value. One-bedroom apartments are great value under A$400,000 but rare…In the fringe and outer suburbs, you should be looking at between A$375,000 and A$450,000,’ he said.

Experts cautioned that foreigners - who are allowed to buy only new properties directly from developers - should buy only properties that have a resale market.

Mr Gilmore reckoned that investors should always look for re-development zones, particularly as the Australian government is now encouraging infrastructure spending. ‘Investments in early stages of re-development zones always see great rewards in the long term.’

Better rental yields
Investors may also want to consider buying smaller units as these offer better rental yields and are easier to resell, said Colliers International associate director for international projects Edwin Layson. What they should be cautious about, said Mr Gilmore, are the tourism markets, as the resale markets are flooded with properties, and bank funding for these markets is hard to obtain at the moment.

Savills Western Australia managing director Paul Craig said the Western Australia market remains attractive due to record low interest rates, tight rental vacancies, rental growth, government stimulus and home buyer grants, against a backdrop of Western Australia’s strong economic links to China. Said the firm’s residential sales and investments manager Shane Smedley: ‘Potential investors should be focused more on rental yields than capital growth in the current market as the days of high capital growth are behind us for the moment.’

Although the Western Australian economy may contract this year, Mr Craig said Savills expects it to be short-lived. ‘The long-term outlook for our property market remains prosperous given our strong links with China.’ Mr Murphy, though, is keen on Sydney and Melbourne as these cities continually have limited new supply of homes and high occupancy rates. For instance, the rents in Sydney rose by 15.4 per cent year on year in 2008 according to Australian Property Monitors data, he said.

The data also shows that Sydney apartment prices fell by 3.8 per cent last year, although they had remained relatively flat in the fourth quarter of the year. In Melbourne, apartment prices fell 1.5 per cent last year.

Investors should know that property prices have not come off as much as that in other markets when buying prime location properties in Sydney and Melbourne. Also, borrowing costs will more than likely rise in the medium term, said Mr Murphy.

‘However, one must also take into account that the currency depreciation and low borrowing costs mean real prices are much lower than they were 12 months ago.’

Source: The Straits Times, by Joyce Teo

 Print This Post
 Email This Post

• Blogroll

  • Contact
  • For Rent
  • For Sale
  • Homepage
  • LIVE! Listings
  • Power Search for Property

• Admin

  • Register
  • Login
  • Wordpress
  • XHTML

  Search