Potential of Jurong Lake District Properties in Singapore

Investing in Singapore?

I suggest that you look at this region and become familiar with it as it will be a hotbed of activities in the next few years.

Here are my reasons why:

1. This is a new commercial city with water front hotels, homes, offices, and many water sporting activities and is not like a suburban town centre modelled after Bishan or Toa Payoh Town Centre. It’s almost like a 2nd Shenton Way.

2. The Canadian School will do to this region what the American School did to Woodlands and the Australian School to the Serangoon Ave 2/3 and Lor Chuan area. Rental demand will be strong and that will affect the rental prices for properties in this area. This will then have a knock on effect on the demand for investment properties in this region.

3. This region is also home to most of the Bioscience and Biotech companies which are part of one of the fastest growing industry in Singapore right now. Even with the current economic condition, this sector of the market is growing at a tremendous pace.

Follow the link below and you’ll see that almost every months in the last few years, something major is happening in this industry; New Investment, Partnerships, Opening of New Centres etc

http://www.edb.gov.sg/edb/sg/en_uk/index/news/articles.html?industry=Pharmaceuticals%20And%20Biotechnology&count=all

4. The expected numbers of jobs created in the Jurong Lake District is expected to increase by 40,000

5. It is also located along the education belt of Singapore and in conjunction with the direction of the Singapore government to turn Singapore into an education hub.

My Prediction:
It will be second only to Orchard Road and Shenton Way region

Check out the following links:

http://www.ura.gov.sg/skyline/skyline08/skyline08-03/text/06.htm

http://www.ura.gov.sg/pr/text/2008/pr08-38.html

Watch the video here:

https://www.ura.gov.sg/MP2008/video2.htm

Contributed by Colin Tan of ColinTan Training & Consultancy

for SingaporePropertyConsultants.com

To Buy Or Not To Buy: The Truth About The Current State of Singapore Real Estate – Part II

Following up on my earlier post “To Buy Or Not To Buy: The Truth About The Current State of Singapore Real Estate“, I would like to establish why I am generally swimming against the tide and going against the common perception of many other real estate consultants saying that the Singapore property market is heading down due to the global economic meltdown.

First and foremost, I honestly do not believe that we are facing a global economic crisis as bad as some sectors would want us to believe. The world used to revolve around the US and when the US sneezed, the world usually caught a cold. However, today things are quite different from some years ago; from Russia to China, India to Brazil and so on, there is a very huge growing middle class and hence a very large consumer market globally. The US may still be the largest consumer market as a nation, but we are now talking about a collective growing consumer market globally and I can see the US having a significantly lesser influence on the world economy; not to say that it does not have any effect on the economy at all.

“China’s middle class has grown from 65.5 million in January 2005 to 80 million in January 2007. It is forecast to expand to 700 million by 2020, driven by continued strong economic growth. The substantial and rising number of middle class with its growing incomes will transform the Chinese consumer market.”

Source: An Hodgson, Euromonitor Archive, 25 July 2007
http://www.euromonitor.com/Chinas_middle_class_reaches_80_million

Here is the forecast for another rapidly rising economic powerhouse, India:

“The middle class currently numbers some 50 million people, but by 2025 will have expanded dramatically to 583 million people—some 41 percent of the population. These households will see their incomes balloon to 51.5 trillion rupees ($1.1 billion)—11 times the level of today and 58 percent of total Indian income.”

Source: BusinessWeek, By Diana Farrell and Eric Beinhocker, May 19, 2007
http://www.mckinsey.com/mgi/mginews/bigspenders.asp

How does this affect the Singapore real estate market; you might ask? Well, the strong Asian economy driven by the economies of China, India, Vietnam etc are rolling unabated like a giant locomotive at full speed with over a billion people on board and a few hundred bald eagles desperately trying to stop it. Singapore has always been the HQ of Asia so to speak, and the Singapore government has been putting numerous initiatives in place to capitalise on this position. Singapore is trying to portray a very different outlook to attract the rich and famous from around the world by moving towards being a globalised country and in 2006, Singapore officially became the world’s most globalised nation.

Singapore is World’s Most Globalised Nation
Source: A.T. Kearney/FOREIGN POLICY Magazine Globalization Index 2006

Singapore: Most Cost-Competitive Place for Business
Source: IMD World Competitiveness Yearbook 2008

Singapore: Most Attractive Investment Incentives In Asia
Source: Japan Center of Economic Research, 2007

Singapore: 2nd in the world for Investment Potential, 1st in Asia
Source: IMD World Competitiveness Yearbook 2006

Price for any product is mostly determined by fundamental economics; demand and supply. When Singapore’s luxury property market has the same kind of demand from the High Net Worth Individuals from around the world as that for London, Tokyo, Hong Kong, New York, etc., I dare say that we can eventually see prices coming very close if not matching the prices of high end properties in these cities. Look out for my next post, in which I will discuss the instances of this already happening and the possibilities of it accelerating.

Contributed by Colin Tan of ColinTan Training and Consultancy for SingaporePropertyConsultants.com

To Buy Or Not To Buy: The Truth About The Current State of Singapore Real Estate

Recent speculations about the Singapore property market have been a tad bit off-putting, considering the fact that doom sayers claim the market has reached saturation point. Some are even predicting that the market will deteriorate even further.

People choose to believe this based on two arguments; first, the Singapore property market’s historical performance and secondly, the comparison with the properties in the outskirts and suburban area with the belief that these two market segments are interdependent.

1996 marked the peak of the Singapore property market in the high-end areas. In a bizarre case of conviction, people believe that the prices of housing, apartments, luxury condos, or any real estate properties back then proves that the Singapore property market has hit saturation point and the property prices then were nothing close to that of what we’re seeing right now.

In addition to the pessimistic belief, people conclude that changes in prices of the Singapore real estate property value in the outskirts and in the city somewhat causes a chain effect. Should the rates at the outskirts go higher or lower, the city’s rates go higher or lower too, and vice versa. Many cannot see property prices going too high which may become out of reach to the to the average Singapore citizen. As such, they believe that this will hold back the price of high-end properties in Singapore.

Having mentioned the arguments above, I would choose to differ from it. Let’s take the case of the three key areas in Singapore. First, the Financial district, second, the Shopping belt, which traditionally has been the front runner in the real estate market, and finally, the Lifestyle region that features the Waterfront Living close to the city and in Sentosa.

Allow me to give everyone a heads up to reasons why I contradict the two arguments. The comparison between the 1996 real estate property market high and the current one doesn’t give enough justification. The Singapore of today is not the same as the Singapore 12 years ago, as well as the Singapore of today will not be the same as the Singapore 5 years from now. In fact, the Singapore government is doing everything possible to turn Singapore into a more cosmopolitan and globalised country, striving to be on par with elite cities like London, New York, Tokyo, Hong Kong, and so on.

When Singapore attains the same kind of attraction as those cities especially to the High Net Worth Individuals (HNWI) from around the world, demand for high-end properties in Singapore will also go up. These HNWI has driven property prices from those cities to phenomenal levels with little or sometimes no bearing on the property prices in the mass market.

The argument about the chain effect on Singapore’s real estate market value between the outskirts and the cities is also not fundamental in any way. Most governments in the world would constantly implement policies to control the price of necessities like basic food but they don’t really care if someone wants to pay S$150 for a can of abalone. Prime property in Knightsbridge, London would cost a whopping estimate of £4000/sq foot and yet if you drive a short distance out of the city into one of the suburbs, one could perhaps acquire a little house or apartment as low as £200-300/sq foot. The same thing goes with other globalized cities like New York, Tokyo, Hong Kong, Mumbai and so on. In general, the same principle applies to all countries.

In relation to that, the Singapore property prices in the outskirts have absolutely NOTHING to do with the prices in the city, and vice versa. Obviously, an investor of a luxury condo in the city is totally different from a buyer of an average cost housing or apartment in the suburbs. In common sense, the Singapore real estate properties in the cities cater to the more prominent names whereas the real estate properties in the suburbs cater to the mass market. As such there is no relation as to the pricing of these two types of properties.

Therefore, governments in all countries would be more concerned about the prices of a real estate property that cater to the MASS market. However, they may not really bother them as much if a Donald Trump or a Bill Gates would want to buy a penthouse in these high-end markets for $15,000,000.

You might say that the property prices increase in these high-end places did eventually lead to the increase in prices of properties in Singapore in the mass markets. Yes, but that is mostly driven by people having this hype of the connection between the two types of properties and other fundamentals like increase in demand in the mass market because of population increase, etc.

I strongly believe that in the coming years, we may find property prices in the high-end property segments in Singapore reaching levels close to that of New York, London, Moscow, Tokyo and Hong Kong etc..

In my next update, I will give you more facts and stats that will prove the points I have made here to be accurate, and at the same time give you unbiased and professional advice on what types of properties you should consider investing in.