When it comes to the South East Asia markets, Mr. Rajul Tandon is the man on whom Square Yards banks upon. Although the sentiments of the market have not been very positive in the South East Asia in the recent times, Rajul has been running & managing the company’s South East Asia office successfully over the last one year. An S.P.Jain Alumni, Rajul holds over ten years of rich experience on every an aspect of business development, sales & negotiation cycle.
The Address team had a chance to talk with Rajul over phone & know a bit more about Singapore & other South East Asian realty markets & learn how the company is positioning itself in the region.
Q. How do you judge the Singapore Market at the moment?
A. It is no secret that the market sentiments are slow at the moment.
A modest growth of just 2% in 2015 will further add to the woes of an already slowing down realty market. Property prices will further depreciate, with price reduction ranging anywhere between 8-12% points in the next one year.
With lending rates in the country being highly correlated to the Federal Reserves in USA, the interest rates are supposed to be high in the coming time. A higher mortgage rate will further dampen the demand dynamics & perpetuate the slowdown in the market. But amidst a lackluster property market, there are some bright spots as well. The demand for high-end homes- SGD 8 Million (USD 5.9 Million) & above is still high & that is giving developers some sense of relief.
Q. Is not the Additional Buyer Stamp Duty (ABSD) affecting property purchase in the luxury segment?
A. Yes, there has been a blow to the market due to a higher ABSD of 15 percentage points on the foreign investors, which adds disproportionately in the case of high-end projects. Many developers are feeling the heat & believe that, had the ABSD not been levied, there the rate of stock turnover could have been made twofold.
But in spite of the ABSD, the city has the lot to offer. At the end of the day, the fact cannot be forgotten that Singapore is a truly global city. In a time when the geopolitical crisis across the globe is mounting further, Singapore with a stable politics & cosmopolitan cultural appeal offers a safe haven to park their investment for the international investor community.
Q. How will the looming economic doom in China going to affect the property markets in Singapore?
A. Singapore has traditionally been a favorite Chinese capital sourcing destination. With the economic slowdown in China, the HNI segment of the country is looking forward to safe havens to park their monies. This will surely increase the Chinese investment in the Singapore market- especially in the luxury segment.
Q. What about other Real Estate Markets in the Region?
A. There are other promising markets such as Malaysia & Hong Kong that offer suitable investment opportunities. Property prices in Hong Kong are in a corrective mode & prices are expected to start bottoming out by the year end
in 2016.
Although with a moderate rate, property prices are appreciating in Malaysia. With 80% of Malaysian populace still aged below 50, the demand for residential units is expected to stay high in the coming time. The country is
also deploying a host of infrastructure development activities that will induce more positivity in the real estate industry. There should be a substantial surge in investment in other segments such as affordable housing, lifestyle living & the commercial sectors.
However, one challenge in Malaysia would be securing home loans, as most of the banks are facing high asset to deposit ratio. This will create difficulties for 1st time home buyers to secure their loans.
Q. What is Square Yards strategy in the region?
A. A large part of our business depends on channelizing the NRI investment in Indian as well as other property markets. Square Yards has a monopoly in the NRI segment & the same applies in the region. We are aggressively
promoting Indian properties in the region through our roadshows, property shows & exhibition.
Along with Indian properties, we are also sourcing some new international deals in the region as a part of our strategy to upscale our international property venture called International Property Management (IPM).
