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  • For the last decade, Singapore's property market has attracted numerous foreign investors,

  • including notable names like inventor James Dyson, Facebook co-founder Eduardo Saverin,

  • and actors Jet Li and Jackie Chan.

  • And now, one report has named Singapore the top real estate investment prospect in Asia Pacific.

  • So what makes this city-state, which is smaller than Hong Kong, so attractive to investors?

  • Singapore has long been considered one of Asia's biggest financial hubs, ranking 4th

  • in the Global Financial Centres Index in 2019, just below New York, London and Hong Kong.

  • It has also ranked as the world's best business environment for nearly a decade.

  • Its competitive workforce, low corruption and developed infrastructure also make the

  • country appealing to investors.

  • In fact, demand for office space across Asia Pacific countries was is expected to go up by 2.4% in 2019.

  • And Singapore is predicted to outperform.

  • To learn more, I caught up with Yeow Chee Keong, a real estate analyst, to discuss emerging

  • trends in the property market.

  • Singapore is ranked number one as the investment city of choice.

  • We are compared to places like Sydney, Melbourne, Ho Chi Minh, Thailand, Beijing, Tokyo and

  • so on and so forth.

  • So when we look at the cities in terms of trends would be, the core assets would be your commercial.

  • Then you look at the major asset classes, would be things like your retail, your hospitality and your logistics.

  • So if you're ranked number one, is it a good or bad thing?

  • I will say that it's good, because it reflects that the policies that we have, the stable

  • environment, the legal structure is good. Investors like Singapore assets.

  • The availability of office spaces in Singapore is at an all- time low, with conglomerates

  • like Dyson joining the likes of Microsoft and Unilever in establishing headquarters in Singapore.

  • The stable political climate in Singapore makes it a haven for investors too.

  • A decade ago, Hong Kong was 2nd in the same report ranking investment prospects for real estate

  • in the Asia Pacific region.

  • It has since dropped 12 spots in 2019, and is expected to decline further to rank 22 in 2020.

  • Just three years ago, Singapore took 21st place, but it's now jumped straight to the top spot.

  • So is capital flowing from Hong Kong to Singapore?

  • The simple answer is yes, based on the banking reports, you can see that it's flowing through

  • Singapore and investing in the region.

  • Will it be sustainable?

  • I do not know because this market is small and we came in first because there's quite

  • a bit of capital inflows. Notwithstanding that there's uncertainty in the market, like the trade tension.

  • But buyers aren't just focusing on retail and office spaces.

  • The residential sector remains appealing for international investors as well. This is

  • despite the government's abrupt decision in 2018 to raise stamp duty rates for foreign buyers to 20%,

  • among other property cooling measures.

  • To find out more about the different kinds of properties one can purchase, I'm meeting

  • up with property agent Melvin Lim from Singapore.

  • How much is this home going for?

  • Alright, so this home, we're putting it up for sale at $11 million dollars.

  • So landed properties, they fall under this portion called the restricted properties.

  • For foreigners, if you want to buy a restricted property, you will need to have special approval

  • from Singapore Land Authority.

  • You need to be a permanent resident.

  • The key determinant point will be whether you have economic contribution to Singapore,

  • usually approved on a case-by-case basis.

  • HDB flats are meant for Singaporeans.

  • Of course, Permanent Residents, they can buy as well.

  • The fact that Singapore has zero inheritance tax is one of the key reasons that foreigners

  • want to park their funds here to own property assets here, so that in future they can pass on to their children.

  • So this house is classified as what property?

  • This is classified as a condominium.

  • Price tag is about $3 million.

  • So, condominiums fall into the category that everybody can buy.

  • It's spread across different types of citizenship status.

  • So, Singaporeans can buy, PRs can buy, foreigners can buy as well.

  • The only key thing to note is that the taxes are different.

  • There are a few countries that fall within the Free Trade Agreement.

  • So they technically do not have to pay the Additional Buyer's Stamp Duty of 20%.

  • This includes citizens and permanent residents of Iceland, Lichtenstein, Norway and Switzerland,

  • as well as United States nationals.

  • But generally, there is no limit on the number of private apartments or condos that a foreigner

  • may buy in Singapore.

  • It's no surprise that even public figures and notable names have properties here.

  • The most expensive was a record-setting penthouse bought by British billionaire James Dyson

  • for a cool $54.2 million.

  • Despite the high prices, opulent houses remain attractive in Singapore.

  • From thebillionaire havenof Sentosa Cove to the high-rise suites in the Orchard

  • Road neighborhood, the average residential property price in Singapore is more than $870,000,

  • below Hong Kong, which hits more than $1.2 million.

  • That makes Singapore the world's second priciest city to buy a home.

  • Nonetheless, big investors are undeterred.

  • Christine Sun, a property analyst, explains to me why.

  • For the past few months, there seems to be more and more foreigners coming in to buy

  • private properties, especially the luxury properties.

  • They are termed as prized assets.

  • Perhaps they see that this is a golden opportunity.

  • We are looking at people who are buying right now, they are the ones who can really afford to buy.

  • So I don't think they are over-leveraging or there is a high risk that the property bubble will fall.

  • But I also wanted an investor's perspective.

  • So I met up with famed financier Jim Rogers at his Singapore home.

  • Property throughout much of Asia is very expensive.

  • And that's partly because interest rates are very low.

  • Interest rates have never been this low.

  • Worldwide, interest rates will be going higher, and that's going to affect most property.

  • Five years ago, if people were thinking of moving to Asia, or opening in Asia, Hong Kong

  • was on the list. Hong Kong's not on the list anymore.

  • Maybe people won't leave Hong Kong, but new people are not going to go to Hong Kong,

  • because they say, well, who knows what might happen?

  • So what's happening in Hong Kong is good for Shenzhen, it's good for Singapore.

  • Singapore has many things going for it anyway.

  • The currency's convertible, easy place to do business, easy place to start a business.

  • The regulations are good in Singapore.

  • Quality is very, extremely important in any investment, especially property.

  • Price of course, and location.

  • Unless you have enough money and time to rebuild something, there's a lot of quality property in Singapore.

  • As a heavily export-driven country, Singapore is vulnerable to geopolitical and trade tensions.

  • And as Singapore heads toward its next general election, it is likely that property prices

  • would be a big talking point. This could affect domestic policies. And as the cloud

  • of uncertainty continues into 2020, it remains to be seen if the investment prospects

  • in the Republic can be maintained.

For the last decade, Singapore's property market has attracted numerous foreign investors,

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Why real estate investors are flocking to Singapore | CNBC Reports

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    Summer posted on 2020/04/23
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