Industry experts and investors are optimistic about the mid- to long-term outlook for the Singapore property market, particularly at the high and luxury end. Despite what is described as the levelling off of the market in the latter part of last year and the start of this year resulting from the knock-on effects of the United States credit crisis and subprime woes, sales are predicted to take off again this year.
Growth is likely to be steady this time, with less of the spectacular short-term profits from 'flip' sales that were a feature of last year. Last year was a record year for Singapore's property market, with capital values in the luxury end of the market shooting up 57.1 per cent and, according to Hong Kong-based HKR International, some investors reaped gains of up to 80 per cent on ultra high-end apartments. During the same period, average rents for luxury condominiums rose by 64.3 per cent.
Price records were made and broken regularly, with one unit in Singapore's most expensive condominium project - The Marq on Paterson Hill, just off Orchard Road, fetching a record S$5,100 (HK$28,786) per sqft breaching for the first time, the S$5,000 mark for the highest per sqft unit price. The 6,157 sqft penthouse unit went for a cool S$31.4million.
This smashed the week-old record of S$4,653.50 per sqft set by an apartment in the prestigious St Regis Residences. The record-breaking deal was brokered by Jerry Tan, managing director of Jerry Tan Residential, specialist in high-end luxury residential sales. Mr Tan is optimistic about the future, despite the fact that only 316 new homes were sold in Singapore in January.
'Anybody entering the market now has to look at the big picture. It is very clear: the population increase, driven by government plans encouraging foreign talent and foreign companies to settle here, the multinational corporations that are relocating their Asian headquarters to Singapore, the integrated resort [complex comprising casinos, entertainment outlets, and convention and retail space] coming online, the Youth Olympics and the Formula One night race due to take place here all mean that Singapore is set to grow.'
Simon Cheong, chairman and chief executive of SC Global Developments, echoes these thoughts. Speaking as president of the Real Estate Developers' Association of Singapore (Redas) at its Spring Festival celebration recently, he said the property market was set to 'gain some traction in the second half of 2008'. Speaking at the same event, the Minister of State for National Development, Grace Fu, says that, 'while the market is quiet, prices are still firm and demand for property still resilient'.