SINGAPORE - From their living room window, Rob and Ying Garman look out at leafy treetops, a Four Seasons hotel, two high rises nearing completion and three others under construction - all signs of Singapore's growth and prosperity.
'Over the long term, Singapore will always be a valuable market,' said Mr. Garman, an executive in a Hong Kong property development company. The British expatriate has lived in Singapore for 16 years, keeping a close eye on the real estate market's steady advance as well as its regular zigzags.
The Garmans are among a small number of foreigners who have bought luxury real estate this year in this island nation of 5.4 million. Others are said to be waiting for the government to rescind the higher stamp duties and restrictive loan rules imposed last year to temper prices, something observers expect by the end of this year as the country's 50th anniversary in 2015 approaches.
'We could have waited a bit,' said Mr. Garman, 47. 'But after selling our house last year, we did not want to be out of the market for too long.'
The couple decided to buy a four-bedroom, 2,347-square-foot condominium in one of the many high-rises off fashionable Orchard Road. They negotiated the asking price of 7 million Singapore dollars, or $5.59 million, down to 5.6 million dollars and closed in April.
(To sweeten the deal, one of the sellers paid the 5 percent tax imposed on those with permanent-resident status, like the Garmans; without it, they would have paid 15 percent.)
Mr. Garman says he struck a good deal, especially as his annual mortgage rate was just 1.1 percent, and the sale price was approximately 1,000 dollars per square foot less than that of some new condos nearby.
(The Garmans' previous freestanding house, which they designed and built in 2005, is just around the corner. They sold it for 7.5 million dollars in 2012, despite the slowing market, deciding that the 5,500-square-foot space was too big and the maintenance bills too high. 'We got out at a good point,' Mr. Garman said. 'We made a comfortable profit.')
Like most foreign buyers here in 2014, the Garmans live in their current investment, which they had rented for nine months before making an offer. 'We decided to find our British owners' address and write a letter,' Mr. Garman said. 'It was a private sale.'
The apartment in the 20-story Tomlinson Building met the couple's requirements: freehold, in a small development and centrally located in Tanglin, a neighborhood of District 10, one of the three districts in Singapore's core central region.
Designed by Pei Cobb Freed, the architectural firm founded by I.M. Pei, the building includes such standard amenities as a pool and gym, children's play area, covered parking and 24-hour security. The main elevator opens directly into the Garmans' unit, which includes a maid's quarters and four bathrooms.
The Garmans say they are particularly happy with the neighborhood. Scores of fashionable shops and restaurants line Orchard Road, and the local grocery, butcher, bakery and post office are all within a five-minute walk. The couple has a 15-minute commute by car or taxi to work in the central business district, and the Tanglin school bus picks up and delivers their two girls just outside the building.
Come 2021, a subway station for the new Thomson line is scheduled to open just a two-minute walk from their door. Mr. Garman is expecting that as a result, the government will assign the Tomlinson a greater plot ratio in an effort to entice developers to offer owners an attractive deal to buy the entire building, raze it, and build an even bigger one.
At the Tomlinson, costs for maintenance and a sinking fund - the local term for a capital improvement fund, used for projects such as repainting - exceed those in many larger buildings where there are more tenants to divide the cost. They pay nearly 16,000 dollars a year, with others paying as much as 19,000.
Unlike many luxury high rises in Singapore, the Tomlinson is nearly full - of its 29 units, only two are unoccupied. Most residents are owners; most are also foreigners, including a couple from the Philippines who bought last year for reasons similar to the Garmans'.
Some of the building's units are for sale. For example, a 3,703-square-foot unit on the 17th floor is listed at 9 million dollars, but a buyer would have to honor the 18-month rental contract of its current tenant, who pays 16,500 dollars a month. Another unit, on the 3rd floor, is listed at 5.8 million.
A property on the second floor, which had languished on the market at 4.6 million, sold last month to local Singaporeans for 4.45 million. (Mrs. Garman, a Chinese Malaysian, had vetoed buying that apartment for feng shui reasons - the building's electrical works are directly below the unit.) And another Singaporean couple bought a seventh-floor apartment this month for an undisclosed price.
So far this year, the Garmans' condominium was among only 53 units sold in the 5 million-plus category, compared to 165 sold in the same period last year, according to DTZ Research.
Meanwhile, the gap between the average prices of luxury and mass market condos has lessened. The spread now is 1,540 dollars per square foot; during the last peak, in early 2008, it was approximately 2,025 dollars per square foot.
For developers, overcapacity poses the biggest potential problem in Singapore's market. Of approximately 100,000 homes being built or soon to be built, approximately 22,000 remain unsold, according to Ku Swee Yong, chief executive of Century 21 Singapore.
In addition, developers have held approximately 8,000 new units off the market, waiting for better prices, even though they face constantly increasing penalties if they are not sold within two years of completion.
And thousands of new units bought by speculators are for sale in the secondary market.
A growing chorus of market watchers says prices could drop, and foreigners could return to the market, especially if the government restrictions are loosened. 'Just ahead of Singapore's 50th anniversary,' Mr. Ku observed, 'it is likely the government wants the investment sentiment to be bullish.'
No comments:
Post a Comment