Today Online : Things are looking up

Things are looking up

05:55 AM Jan 15, 2010

by Millet Enriquez emelita@mediacorp.com.sg

SINGAPORE - Singapore's investment property market seems to be shrugging off the global financial crisis and is staging a robust comeback, according to industry experts.

Improving market sentiment has boosted property buying in Singapore, resulting in $10.2 billion in total real estate investment sales for last year, said property consultant CB Richard Ellis (CBRE).

Although this is 43.1 per cent below the $17.94 billion in 2008, the figure is much better than initially expected, CBRE said.

Total residential sales grew from $6.37 billion to $6.93 billion, registering an 8.7 per cent increase from 2008, said CBRE.

"In Singapore, the residential sector is expected to dominate as developers seek to replenish their land bank," said property consultant DTZ Research in a separate report.

It said 57 per cent of fourth quarter 2009 transactional value in Singapore came from the residential sector. Overall, Singapore accounted for 73 per cent of South-east Asia's total transactional value of US$2.4 billion ($3.25 billion) for the quarter.

Between Hong Kong and Singapore, the city state appears to be more attractive for investors both in the residential and office market space.

In a news briefing, Savills Research & Consultancy said the prices of Singapore high-end homes are still more attractive compared to Hong Kong and other markets.

Prices of luxury residences this year rose 45.2 per cent on-year in Hong Kong, while it increased only 3.9 per cent in Singapore.

On the office market front, Savills believes Singapore is set to benefit from tenant upgrades and from the rising costs of office rents in Hong Kong over the next year or so.

Newer buildings, which will come on stream in Singapore between this year and 2012, will command premium rents and capital values, the firm said.

The integrated resorts opening and growing Asian affluence will also bode well for Singapore.

The investment market for South-east Asia is expected to be more active this year on the back of improving market sentiment, said DTZ.

Going forward, the appetite for Singapore's office market may also come back as many believe that it has already bottomed out, said CBRE.

Savills sees an upside of 10 to 15 per cent for the prices of high-end residences in Singapore while rents would moderate up by around 10 per cent due to tightening supply.