Singapore seen as a luxury 'buy'

PUBLISHED : Wednesday, 10 March, 2010, 12:00am
UPDATED : Wednesday, 10 March, 2010, 12:00am

The opening next week of the Universal Studios Singapore theme park on Sentosa Island will complete a multibillion-dollar facelift of the city's premier tourist destination.

And analysts say that if the island developments provide the expected boost to the country's economic growth, now may a good time to buy upmarket property in Singapore as the sector languishes about 14 per cent below the market peak of 2007.

The theme park will be located next to a casino and four hotels and will feature seven themed zones - Hollywood, New York, Sci-Fi City, Ancient Egypt, The Lost World, Far Far Away and Madagascar, all based on Universal movie hits and franchises.

Singapore's trade and industry ministry last month revised its gross domestic product growth forecast for this year upwards to between 4.5 and 6.5 per cent from between 3 and 5 per cent.

'The recovery in property prices in 2009 was led by local buyers with limited budgets. Mass-market prices have already recovered to near previous peak levels,' said Chua Chor Hoon, the head of Southeast Asia research at property consultancy DTZ.

Chua now expects the high-end segment of Singapore's residential market to lead a second leg of recovery, although he cautions that a runaway increase in prices such as that occurred in 2007 is not likely as concerns linger over weak consumer demand in the United States and Europe.

Last month, the government imposed an extra stamp duty for anyone selling units within a year of purchase, and the loan-value limit on property loans has been lowered to 80 per cent from 90 per cent.

But Chua said the impact of the measures was likely to be minimal as many investors held properties for longer than a year, and not many borrowed up to 90 per cent.

Among the luxury-sector targets suggested by analysts is Goodwood Residence.

The project is being developed in a prime location on Bukit Timah Road, next to Goodwood Hill, by GuocoLand, and will provide 210 units ranging in size from 1,119 to 2,928 square feet. Construction is scheduled for completion at the end of 2013.

So far, 36 units have been pre-sold to Kuwait Finance House for an average of S$2,800 (HK$15,534) per square foot. The developer will launch public sales on March 20 and 21 in Hong Kong, the first stop of an international road show.

Jerry Tan, the sole agent of Goodwood Residence in overseas markets, said the developer would pre-sell four-bedroom units of 2,454 sqft in Hong Kong at this stage. Prices are expected to range from S$2,445 to S$3,627 per square foot, or between S$6 million and S$8.9 million.

Tan expects the project to attract expatriates living in Hong Kong as well as Indian citizens because of the potential for capital gains, the tight supply of freehold properties in Singapore and the 'green' environment of the project.

It is the first residential project to win the Building and Construction Authority Green Mark Platinum Award for environmental features.