Singapore Property Investors Remain Strong (31 Dec 2008)

Residential and commercial property sectors in Singapore are still attractive to several medium- to long-term investors.

Property observers see Singapore’s commercial status as one of the international financial hub. Despite this year's difficult times for all marketing sectors, market watchers noted that property investment fundamentals remain positive and strong.

As many financial institutions across the globe cut costs, they are now planning to move their business operations out of the luxury cities in Europe and the US, and bring them to Asian cities where cost of business are much cheaper. For instance, corporate tax rate in Singapore is 18 percent, compared to 40 percent in the US and 29 percent in the UK.

This event can spur demands for office and business spaces in most financial centres in Asia like Singapore, bringing investment opportunities in commercial property sectors.

“Financial institutions are growing, in many cases from hundreds to thousands of jobs here in Singapore. The bigger these institutions become, the more real estate they need,” Jones Lang LaSalle Managing Director Christopher Fossick said.

However, opportunities in residential markets are visible as well. Closing gap between rentals and debt servicing, as well as the falling valuation this year can attract many investors who are looking for good deals.

“For example, those in district 9, 10, and 11, they tend to be more elastic, the prices. So when the economy is not doing too well, the prices come down quite a lot, especially amongst those who have, for example, bought from the developer and then now need to sell to raise cash flow. They are prepared to cut losses,” said ERA Asia Pacific Associate Director Eugene Lim.

Observers see property market is offering rich pickings to investors who would bring long-term returns in the country.