Property in Singapore: China Buyers Top Sentosa Cove Property Market

Tuesday, August 24, 2010

China Buyers Top Sentosa Cove Property Market

Buyers from China now comprise the largest group of foreign buyers in the exclusive residential enclave of Sentosa Cove.

In the first half of this year, Chinese buyers accounted for nearly a third of all foreign buyers - well up from 18 percent for all of last year and just 7 per cent in 2008.

Chinese buyers have shown a clear preference for the landed homes, accounting for 60 per cent (12 deals) of all foreign buyers. These properties tend to be more expensive than apartments, due, but, offers Chinese buyers a ‘resort-style living environment’, at prices lower than similar properties in mainland China and Hong Kong.

Although they now outnumber Malaysians, the largest group at the gated community last year, overall, they are still No. 3 among foreign buyers here, after Indonesians in second place and Malaysians at the top. The latter two groups together accounted for around 40 per cent of total deals by non-Singaporeans in the first half of this year.

Still, foreign buyers, not including PRs, remain cautious, owing to slow economic growth in the United States and Europe, while Singaporeans accounted for a higher proportion of private home purchases in the second quarter, at 74 per cent of total deals.

Chinese buyers are attracted to the transparent and well-regulated Singapore market, come to Singapore to work, or want their children to study here, due to the comfortable, bilingual environment, and have the wealth and mobility to purchase properties, such as the $36 million purchase of a Sentosa Cove bungalow in June this year.

Rising real estate prices and property purchase curbs in China have also motivated its citizens to look to overseas markets for diversification and investment opportunities, Ms Chua said.

Singapore PRs from China generally like homes in districts 22 and 23 such as Jurong and Choa Chu Kang as they are near a number of their workplaces.

On the other hand, well-to-do Chinese buyers are attracted to prime districts 9, 10 and 11 as well as waterfront areas in Sentosa Cove and district 15 in the east.

Visit http://chorkim.goh.virtualhomes.sg/ for Sentosa property listings.

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GOOD CLASS BUNGALOWS

Buying the ultimate home

With only about 2,400 units of good class bungalows in the market, almost any GCB would be a rare find.

By Arthur SimPublished: August 13 2009,The Business Times
THEY are wealthy and successful people who can probably afford to buy any home they want, but many of them are being drawn towards good class bungalows (GCBs). There are only 39 designated GCB areas in Singapore and Binjai Park is one of them.

However, these areas are not all equal. Some GCB locations are more prestigious than others. For instance, the current asking price for GCB land in the Nassim area is between $1,500-$2,000 per square foot (psf) whereas in Chestnut Drive, GCBs have been known to have transacted at around $550 psf.

There are also pros and cons to buying either an old bungalow or a newly built one. 'Some old GCBs have unique architectural features and come with a rich heritage. Buyers, however, have to be prepared to set aside some money to refurbish and upgrade the building and fit it out with modern conveniences,'

New buildings, he says, can be tailored to specific tastes but also be expensive. But what usually pushes up prices is the location. A martial arts movie star who picked up a GCB at Binjai Park for $19.8 million at around $871.36 psf earlier this year appears to have gotten a good buy. It was reported that the seller of the house had incurred a loss of $1.2 million on the deal, having bought the property in early 2007 for $21 million, or $924 psf. The selling price for a newly built GCB will generally be higher than that of an old GCB. 'The choice normally depends on whether the buyer is price sensitive,'. A new house might take as long as two years to build although it is more likely to be built to the owner's precise specifications.

If one is looking for exclusivity, the most expensive GCBs are generally in the Nassim and Lady Hill areas. This is followed by those in the Tanglin vicinity such as the Rochalie, Bishopsgate and Chatsworth areas.On the prices, GCBs in the Tanglin vicinity range from $1,200-$1,400 psf for the top of this category.

'Other popular GCB areas are in the Swettenham, Pierce, Dalvey, Cluny Park areas where prices can range from $1,100-$1,300 psf', '1,000 psf is the standard price for an average GCB. Prices have been moving up over the last six months. Permanent residents are permitted to buy landed property, but only with permission from the government. Foreigners cannot easily buy a GCB or any other landed home here as the government restricts foreign ownership of residential property. However, foreigners who take up Singapore citizenship may buy landed property. The exception to the restrictions is the gated residential enclave of Sentosa Cove, where ownership rules were eased to allow foreigners who are not permanent residents to buy landed homes or land plots, though permission is still needed.

Apart from some restrictions on ownership, one of the common misconceptions when buying a GCB is that some buyers unknowingly pay a premium for a home that actually falls outside the designated GCB areas. 'Some buyers think that as long as a bungalow has a land area of 15,070 sq ft, it is considered a GCB, not knowing there are only 39 designated areas,' he added. Before buying any home, it is also useful to do some checks. For instance, it is useful for a surveyor to be called in to assess and ascertain the site boundary for issues such as encroachment. A structural surveyor or engineer can also be engaged to assess the structural integrity of a house, especially if it is an old or conserved bungalow. It is also important to check with the relevant authorities about possible drainage and road reserves as this could affect the the boundary setbacks. Finally, the terrain, shape of the site and frontage are other physical characteristics that are important, especially if one is going to build a new house. But with only about 2,400 units of GCBs in the market, almost any GCB would be a rare find. 'The majority are owned by the who's who - and are seldom placed for sale in the market. On the contrary, there's an increasing pool of buyers made up of high net worth individuals, GCB collectors as well as permanent residents who are looking to buy GCBs for their own use,' he adds.

GCB buyers are a discerning group of investors who also have a different view on what makes a good investment. 'Yields are not part of the investment criteria - which is typically less than 2 per cent,' said Mr Han. Instead most see GCBs as a good long-term asset class of investment, 'especially in land-scarce Singapore where land value appreciates over time'. And Mr Han believes that the outlook for GCBs is also good.