![](\"http:\/\/i2.wp.com\/www.siamlandbank.com\/propertynews\/wp-content\/uploads\/2017\/07\/Facts.jpg?fit=211%2C461\")
\nAerial view of Singapore\u2019s ever-changing skyline.
\nDespite the sluggish market and weak economic outlook, Singapore is still considered a safe bet by foreign investors, according to analysts.
\nBy Michelle Yee
\nAlthough the property cooling measures such as the Additional Buyer\u2019s Stamp Duty (ABSD), imposed by the government in 2011 to calm a heated market and avert an asset bubble caused foreign buyers to stay away since 2012, resulting in a a slowdown in the country\u2019s residential market, analysts feel that foreigners are starting to shift their focus back to Singapore, as many of them view the city-state as a safer investment destination as compared to other countries.
\n\u201cIn recent years, transaction volumes have been picking up, rising 16 percent year-on-year in 2016, and continuing to be active in 2017. New sales launches are generally doing well, enjoying keen response from buyers. The perception that prices could be bottoming also led many buyers back to the market. In 2016, residential property purchases by foreigners accounted for 6.7 percent of total residential transactions, while in the first five months of 2017, the proportion was slightly higher at 6.9 percent,\u201d shared Ong Teck Hui, National Director, Research and Consultancy at JLL.
\nLast year, Chinese developer Qingjian Realty made headlines when it paid $638 million for Shunfu Ville via a collective sale in May. They also won the tender for a mixed-use development site in Bukit Batok West for $301 million that same month.
\nSimilarly, in the commercial sector, sales transactions have also been on an uphill trend.
\n\u201cActivity in Singapore\u2019s office investment sales market (comprising private sector deals above $5 million and all public sector deals) picked up momentum in 2016, following two years of contraction in 2014 and 2015. The overall sales volume hit a nine-year high of $ 9.06 billion in 2016, driven by mega deals such as Qatar Investment Authority\u2019s acquisition of Asia Square Tower 1 for some $3.4 billion, and IOI Properties\u2019 purchase of the Central Boulevard Government Land Sales site for $2.57 billion. Foreign interest in Singapore\u2019s office properties also continued into 2017 with Hong Kong Land, Fullshare Holdings, Simply Swift Limited \u2013 a wholly-owned subsidiary of HK-listed Shun Tak Holdings and Lei Shing Hong Properties (Singapore) amongst those who made purchases in the first six months of the year,\u201d added Tay Huey Ying, Head of Research and Consultancy at JLL.
\nSharing her thoughts on the increase in foreign funds into Singapore, Christine Li, Research Director at Cushman & Wakefield said: \u201cDue to global market volatility as a result of Brexit and the continued deterioration in the oil and gas industry, foreign investors see Singapore as a safer investment destination where investment is fairly protected due to the strength of the Sing dollar.\u201d
\nWhy invest in Singapore?
\nMany people from all over the world know Singapore to be a place that is not only stable and effective, but the country also has a strong economy and boasts a world-class education system. That said, another big pull factor for foreign investors is that as compared to other countries in the world dealing with Brexit, an unpredictable Trump presidency in the US, political unrest in the Middle East, as well as terror plots in Europe and some parts of Asia, Singapore is considered to be a very safe place to invest and even live in.
\n\u201cSingapore has strong fundamentals including political stability, economic growth and progress, market transparency and an effective legal system. The residential property market, on the other hand, has a track record of long term capital appreciation. Investors from some nearby countries see Singapore as a safe haven to invest some of their wealth, taking into account the appreciation of the Sing dollar against their currencies,\u201d Ong said.
\nEchoing similar sentiments, Shaun Poh, Executive Director of capital markets at Cushman & Wakefield said, \u201cAlthough the market is sluggish, Singapore is still a safe bet compared with other developing economies, which may pose more risk and have greater uncertainty.\u201d
\nLuxury apartments with sea views are becoming more popular among buyers.
\nStill a buyer\u2019s market
\nFor those who are looking to invest in Singapore\u2019s property market, analysts share that now is a good time to buy as it is still a buyer\u2019s market.
\n\u201cThe residential market appears close to the bottom of the cycle, and prices are expected to recover after that. Currently, it is still a buyer\u2019s market as purchasers are still price sensitive. Therefore, sellers have been realistic in pricing \u2013 for example developers who are trying to move sales in their launches have to price the units realistically to attract buyers. There are numerous projects in good locations such as the prime districts and near MRT stations which could meet the needs of investors,\u201d Ong shared.
\nAnalysts point out that foreign investors\u2019 interest for commercial properties have also remained strong as the price gap between buyers and sellers in Singapore has narrowed, following recent price corrections.
\nAccording to the Urban Redevelopment Authority\u2019s price index, office prices dipped 0.6 percent in the fourth quarter of 2016 from the preceding quarter, marking a sixth straight quarter of decline, caused by financial and business services consolidating, while the completion of large projects also caused a short-term supply overhang.
\nOverall, the total price decline in 2016 for office space stood at 2.8 percent, which is much steeper than the 0.1 percent dip reported in 2015.
\nAs such, discerning investors who are adopting a mid- to longterm view (about five to 10 years or more), are seizing opportunities to purchase assets in the office sector at lower prices.
\n\u201cInvestors continue to be keen on Singapore\u2019s prime office and suburban retail assets, which are closely held and rare to access,\u201d Tay Huey Ying, Research Head at JLL said.
\nProperty hotspots
\nTo get a better idea on which areas and what type of properties foreign buyers favour, we spoke to analysts who shared that foreign investors are currently leaning towards condominiums in the prime districts or city fringe area, as these tend to be more in demand by tenants and could be more competitive for leasing. Developments near MRT stations and amenities are also popular with investors.
\n\u201cThe preference is still the prime areas \u2013 Districts 9, 10, 11, and District 4 (Sentosa, Keppel Bay) for non-Asian foreigners. That said, Asian foreigners are open to other areas like Queenstown, the Redhill cluster, Buona Vista and Paya Lebar. Most of the draw comes from availability of good quality stock in these areas,\u201d shared Tay Kay Poh, Executive Director and Head of Residential Services, Knight Frank Singapore.
\nOng from JLL, on the other hand, said that new developments with good attributes generally tend to attract more buyers. \u201cInvestors and buyers are usually drawn to developments with good attributes, for example, Seaside Residences in the East Coast area, which is situated near an array of amenities, a future MRT station, and enjoys sea views, found strong demand from buyers. Another example of a project that sold well is Park Place Residences at Paya Lebar Quarter, which is part of a prestigious mixed-use development at Paya Lebar, and is\u00a0located near an MRT station served by two MRT lines.\u201d
\nWhat to look out for
\nFor investors who are not sure which areas in Singapore they should invest in, analysts noted that they can begin by looking for properties that are situated close to amenities and are well served by transportation links.\u00a0
\n\u201cI would recommend locations close to the MRT or transport nodes. For the purpose of investment, investors might wish to consider smaller developments with unique features as this would translate to lesser competition when seeking rental. Lastly, pick developers with brand reputation and have a good track record,\u201d Tay said.<\/p>\n