SINGAPORE — AN ATTRACTIVE REAL ESTATE TARGET

As the Russian economy is diversifying beyond oil and gas, investing in Singapore is the perfect diversification. The Singapore economy is based on services and on being the banking and tourism attraction of the region, the total opposite of the natural resources based Russian economy.

One of the most attractive aspects of Singapore is its property, be it commercial, which is in big demand from corporations and businesses from all over the world, to residential, which is the safe haven for investors of the region and beyond.

Hence, Singapore property is in high demand from both international investors and locals. In fact, the demand is so high that the Government of Singapore is acting to curb the excessive demand for residential property, which most likely eliminates the short-term speculators and opens the market to longer term, deep pocket investors, which means more stability to invest in.

I will focus on the high-end residential property.

SIGNS OF THINGS TO COME — A MACRO AND MICO PERSPECTIVE

So, what has changed since the Singapore government slapped the market with yet another cooling measure?

In general, not much when it comes to the high-end and luxury real estate sectors. The highest end of the market will continue to rise, if slowly, because the highest end never really fully recovered. Also, more people in Singapore have more money, and they will buy more luxury properties. That is evident by the fact that prices of good class bungalows (luxury villas) are 20 per cent up during the past year (2010).

On the other hand, development charges are up, foreign labour numbers down while their licensing prices are up. And commodities prices are up again as well. All this means properties will cost more to construct.

To summarize Singapore's situation, the government is acting to protect the mass market from overheating, sending a clear signal ahead of elections that the mass market will not be left to boil over.