Singapore hopes to catch up with Dubai

Singapore hopes to catch up with Dubai

By Suzanne Fenton, Staff Reporter
Published: March 11, 2008, 00:41

Dubai: Singapore is hoping to play catch-up with Dubai as it currently leads the real estate industry in Asia with a house price growth of 21 per cent year-on-year in 2007, according to industry reports.

Residential property prices in Singapore have risen sharply in recent years but still remain low compared with other global cities.

According to CLSA Asia-Pacific markets, Asia's leading brokerage and investment group, house prices in Singapore in 2005 were around $350-$400 per square foot. In London in the same year, the price was approximately $1,000. In New York in 2005, prices per square foot were $1,100 and in Hong Kong, they were $500 per square foot.

However, with the government of Singapore now targeting a population growth of over one million, property prices have already started to rocket.

Figures from the Global Property Guide show that house prices in Singapore increased from 4.71 per cent in 2006 to 21.05 per cent in the second quarter of 2007.

And wealthy foreigners are behind half of the demand for luxury residences, including those from the Middle East region. In 2007, 50 per cent of all high-end residences, worth S$1,100 ($792) and above were owned by foreign nationals and the rest owned by Singaporeans.

In pipeline

According to Singapore's Urban Redevelopment Authority (URA) at the end of the fourth quarter 2007, there were 64,852 private residential properties in the pipeline. Of this, 56,149 residential units and 1.21 million square metres GFA of office space is expected to be completed between 2008 and 2011. Around 29,722 residential units are already under construction.

The average rent per square foot here in Dubai stands at around $98, compared with $68 in Abu Dhabi according to EFG-Hermes. To buy in Dubai, prices can be around Dh357,000 for a 735 square foot apartment which is around Dh485 ($132) per square foot. Prices for a 1,563 square foot villa can be Dh960,000 which amounts to around Dh614 ($167) per square foot. A 2992-square foot villa can cost approximately Dh2.5 million, or about Dh852 ($232) per square foot.

Ong Chih Ching, managing director for investment company KOP Capital said, "The original Dubai blue-print was based on Singapore - the infrastructure, the urban planning but of course today Dubai has surpassed all that. The thing is Singapore is very small compared with Dubai. We have no room to build the Palm for example so there are limitations. As the island itself is small, property is going to get more and more expensive as the population increases."