There’s a multitude of reasons why Indonesians buy property in Singapore.
Jakarta, GIVnews.com – For decades now, it has been no secret that uber-rich Indonesians love to snap up real estate properties in neighboring Singapore. Although the trend has been decreasing lately due to the weakening Rupiah and a stronger domestic housing market, Indonesians still form a sizeable chunk of all foreign property buyers in Singapore.
According to Sim Mong Teck, a private client lawyer in Singapore, from 1995 to 2010 Indonesians have a strong preference for properties in the Core Central Region (CCR). CCR is a collection of prime districts right in the modern heart of Singapore, which includes Orchard, Cairnhill, River Valley, Ardmore, Bukit Timah, Holland Road, Tanglin, Watten Estate, Novena, Thomson, Raffles Place, Marina, and Sentosa. The price of real estate here is sky-high, reflecting the excellent location and surrounding amenities.
After 2010, buying activity shifts to the mid-tier segment as shown by the rise of property sales in the Rest of Central Region (RCR) and Outside Central Region (OCR). From luxury penthouses with price tags of more than SGD 10 million, now Indonesian customers tend to look for condominiums in suburban areas like Ang Mo Kio and Jurong, priced at around SGD 1-2 million.
There’s a multitude of reasons why Indonesians buy property in Singapore. The first reason is investment. In Singapore, a highly dense country with a significant international population, it is not difficult to find people looking to rent a flat or condominium. As such, the rental market is rather tempting and many Indonesians buy Singaporean property just to lease it to someone else, making quite a handsome profit in the process.
Another reason is the development level of Singapore as compared to metropolitan cities in Indonesia. For Indonesians who wish to use their Singaporean property for personal usage, Singapore offers a much more fulfilling life in all aspects. From the world-class education and healthcare to the daily comforts of excellent public infrastructure, from the high level of safety and security to the practically nonexistent pollution, Singapore simply promises more.
A push factor from Indonesia is the memory and fear of 1998 tragedy. Among Indonesian property buyers in Singapore, many of them are of Chinese descent who purchased a Singaporean property as an insurance or safety net should the 1998 rioting ever happen again. Chinese Indonesians know that the anti-Chinese sentiment in Indonesia has not been completely quenched and there is always a chance of another massacre.
The fourth reason is the financial ease of purchasing a property in Singapore. According to Teddy, a property sales team leader in Far East Organization, there are several advantages in the Singaporean property market. First is the low mortgage interest rate of 2%, compared to 12% in Indonesia. Second is the maximum mortgage payment period of 30 years, twice as long as in Indonesia. Third, there is an assurance that the project will be completed in time as the Singapore government will impose a fine on the developer if the construction is delayed.
Other than Singapore, Indonesians have been purchasing properties in Malaysia, Australia, Hong Kong, the United States, and the United Kingdom.
Original article here.