Singapore prime areas beckon

Source : Business Times - 26 Sep 2008

High-end homes in these exclusive areas appeal to foreign buyers whose numbers have risen over the years

IN Singapore, Districts 9, 10 and 11 are traditionally recognised as prime residential areas.

Districts 9 and 10 are located around the main shopping belt of Orchard Road (Orchard, Cairnhill, River Valley, Ardmore, Holland Road, Tanglin), while District 11 is situated to the north of Orchard Road, in the Bukit Timah, Watten Estate, Novena and Thomson areas.

Since 2005, District 1 (the financial district) and Sentosa Cove have been new additions to Singapore’s prime residential market.

While offering a much-admired lifestyle like no other in Singapore, developments in these prime areas offer an exclusive sanctuary for an individual or family, amid the bustle of city life.

Ranked high on appeal, prices of homes in these areas also come with a hefty price tag. It is not surprising that the developments surrounding or within the Orchard Road area have been some of the most expensive properties in Singapore. With Orchard Road renowned as the epicentre of Singapore’s shopping and entertainment district as well as upcoming malls that seek to titillate one’s senses, the heart of the 1,650ha urban landscape of the Central Area is set to undergo a slew of changes.

On the same note, older prestigious residential projects in the area are usually situated on a five-minute drive from Orchard Road, typically nestled in quiet enclaves. This has changed over the years as we see newer projects planned to be visually apparent from Orchard Road itself compared to those built in the 1980s.

Likewise, Orchard Road is gradually being transformed with new malls such as Orchard Central and Ion Orchard set to enhance the shopping scene. Not only has this led to an alteration of Orchard Road’s urban landscape, but it has also enhanced the nature of high-end developments in Singapore. While still able to furnish a level of opulence, exclusivity and uniqueness, high-end developments are now embedded into the flurry of urban activity, with Orchard Road as its backdrop.

To buttress these claims, the large number of collective sales in recent years would eventually contribute to the remodelling of high-end urban areas.

From 2005 to 2007, a total of 116 residential projects in District 9,10 and 11 were sold in collective sales for re-development. Given this substantial number, and with freedom to re-develop, older residential buildings in the high-end districts would increasingly give way to modern and taller apartment blocks that feature modern architectural designs with complete range of recreational facilities.

Furthermore, some of the new high-end condominiums also offer the luxury of space as seen in developments in the Ardmore Park and Draycott area where the units are larger than 200 sq m.

High-end luxury homes in the traditional prime districts, with their enduring charm, have always been highly regarded by those with large coffers and a distinct taste for the luxuriant high life. With chicly designed homes that offer a lush and lavish lifestyle, residential developments in these areas have drawn the interest of both locals and foreigners alike.

Over the past three years, the number of homes bought by foreigners has risen from around 3,600 in 2005 to about 9,100 in 2007. The proportion of foreign buyers islandwide for all landed and non-landed homes stood at 25.6 per cent as at 2Q 2008, a marginal fall of 2.3 percentage points from the previous quarter.

Over the last 13 years, the proportion of foreigners that purchased all types of private homes (excluding executive condominium units) islandwide reached its peak in 2007 when this figure registered at 25.7 per cent. Regardless of this slight slackening in terms of the proportion of foreign buyers in Singapore, the 25.6 per cent registered in 2Q 2008 is still 3.6 percentage points higher than the five-year quarterly average figure.

Foreign buyers originate from various continents and based on 1H 2008 statistics, the majority, 17.7 per cent, were from Indonesia. Not far behind, Malaysians also formed a significant proportion at 17.6 per cent followed by those from India and China. Farther across oceans and land masses, buyers from the UK and the US are also evident in Singapore’s private residential property market with a proportion of 8.7 per cent and 2.3 per cent respectively as at 1H 2008.

Most foreign home-buyers and investors would prefer to acquire a condominium unit in the prime districts, and figures indicate that for District 9, 10 and 11, the proportion that has purchased both landed and non-landed homes in these two districts was a considerable 35 per cent in 2007.

Driving forces behind foreigners’ interest in residential properties here can stem from a multitude of reasons. One major compelling reason is the efficiency, safety and open business environment in Singapore. There are also Singapore government policies in place to welcome foreigners to live here.

The service industry, especially the financial services segment has seen robust growth over the past decade. This has seen an increase in high-paying jobs, which have attracted many highly skilled foreigners to work in Singapore.

Coupled with various other socio-political reasons, the cosmopolitan city-state of Singapore is endless in its appeal. Not only was Singapore ranked as the best place for Asian expatriates to reside in earlier on in the year, but a recent poll also highlights that expatriates have rated Singapore to be the best place in the world to live, especially in terms of the quality of accommodation. With the introduction of the two integrated resorts and added casinos to boot, the F1 night races and a host of other initiatives, Singapore is also gradually becoming a more interesting place to work, live and play.

In addition, well-heeled investors prefer real estate in the prime districts because property prices in these areas would always be among the first to increase during a property boom. Moreover, investment in Singapore’s real estate is deemed to be relatively low risk in Asia.

With prime residential districts timeless in their appeal, it is still not too late to buy a property in these swanky, plush neighbourhoods within a city that is becoming more enchanting and cosmopolitan. An urban oasis in Singapore’s private residential landscape, these prime areas offer a splendour and lifestyle like no other.

This article is contributed by Knight Frank Consultancy & Research Dept