- Joined
- Apr 9, 2009
- Messages
- 3,070
- Points
- 0
FOR only $438,000 - less than the price of a four-room HDB resale flat in Bishan - you could be the proud owner of a seaside double-storey villa built right on the water.
While it's not in Sentosa Cove, it's not that far off from it either.
These villas are being developed by Funtasy Island Development (FID), a Singapore-based company offering Singaporeans a resort lifestyle close to home.
Funtasy Island is being built on a group of small islands just 16km south of Sentosa Cove, or a 20-minute ferry ride from the Harbour Front ferry terminal.
Part of the Indonesia's Riau Islands, Funtasy Island, which is expected to be opened in 2013, is being touted as the world's largest eco park resort.
And despite the risks involved in overseas property purchases, it seems that Singaporeans are jumping at the chance to own island resort properties at a fraction of the price of those at Sentosa.
So far, 90 per cent of the villas have been sold, and 70 per cent of the buyers are Singaporeans, said Mr Michael Yong, FID's non-executive director. It opened for sale here earlier this month.
One of them is private banker Benjamin Lim, in his 40s, who put down a 2 per cent downpayment of close to $10,000 for a $481,800, 1,980 sq ft duplex villa with a view of the sea and the opposite island.
With the recent property cooling measures here and the strengthening of the Singapore dollar, Mr Lim is one of a growing number of Singaporean investors looking beyond our shores for buys.
Mr Colin Tan, head of research and consultancy at Chesterton Suntec International, said: "We are seeing more foreign properties being advertised here and property prices here are still quite high.
"Hence, investors who are looking for quick returns will leave Singapore and venture into the foreign market.
"And if a developer offers a net return of 9 per cent, it is much better than putting your money in the bank."
Mr David Neubronner, Jones Lang LaSalle's head of residential project sales in Singapore, has noted how Singaporeans have been buying into beachfront resorts in Batam and Bintan since the 1990s.
The key attraction is the affordability and proximity to Singapore, said Mr Neubronner, who also saw how the success of Sentosa Cove could have boosted the trend.
He said: "With growing affluence and exposure to luxury holiday lifestyles, Singaporeans have been buying resort homes around the world."
Asked if he thinks that projects in nearby islands are sometimes seen as cheaper substitutes to living on Sentosa Cove, Mr Neubronner said: "Yes, the value proposition versus Sentosa can be irresistible."
This is one of the reasons Mr Lim put his money in the eco park resort, where he plans to have weekend getaways with friends.
"It costs me less than $500,000 and I am now one of the proud owners of Funtasy Island," said Mr Lim, who lives in a three-room private apartment here in the east.
Another Singaporean who took the plunge is Ms Anne Tay, a senior manager in financial services firm Anne Tay and Associates, which specialises in estate planning for high-net worth individuals. She bought two duplex villas for just under $1 million.
The mother of a teenage boy said: "Not very often, will you get to see a development with a natural water theme that comes with a lifestyle concept.
"You can enjoy almost the same thing as Sentosa Cove, but cheaper."
Aren't they afraid of losing their money if the project runs into problems?
After all, stories abound of Singaporeans losing thousands of dollars after developers of overseas properties disappeared before the projects were completed.
In 2001, about 90 Singaporeans who paid $16,000 each for units in the Villa Temasek development in Bintan lost their money after the developer disappeared without completing the project.
Mr Lim said: "I did my homework on understanding the economic and political situation, government policies, and found out who are the potential buyers.
"I also studied the materials given by the marketing agent and did my checks to ensure that the information is genuine. It is a tedious process and there is no short cut to it."
The $300 million project has four directors - two from Indonesia who own the land, a Malaysian who is the creator and founder of Funtasy Island and Mr Yong, who is Singaporean.
FID's three executive directors were separately involved in projects like the Novus Gawana Resort in Bali, Pluit Mega Mall in Jakarta and Calinton Hotel in Geri, Perak.
WHEN buying property overseas, don't decide based just on price and location.
It's equally important to look at things like the track record of the developer and the property laws of the country.
It is vital that property hunters do their homework before plunging into the foreign market, said property experts.
"It is important to find out about the reputation of the developer, especially if it is a new project and you don't get to see the completed product," said Associate Professor Sing Tien Foo from the Department of Real Estate at the National University of Singapore's School of Design and Environment.
"You are buying something off the drawing board. How do you make sure that the developer completes the project?
The developer's track record, its vested interest and stakes in the project are important to know."
He said it is also good to know if there is a major shareholder who holds long-term interest in the project.
That is because there will be a vested interest for the developer to ensure the success of the project in the long term.
"Thirdly, it is important to know about the title ownership and if there is any hidden cost should you want to sell the property later on," he added.
Long term
Mr David Neubronner, Jones Lang LaSalle's head of residential project sales in Singapore, urged investors to look beyond pricing and packaging and consider the long term.
Some developments in the region may be left neglected over time. Some may become dilapidated quickly after completion, thereby undermining the value of the property, Mr Neubronner added.
For projects like Funtasy Island, he said investors can expected gross returns of 10 per cent or more, based on current trends.
If the developer offers a rental guarantee for the property, Mr Neubronner said that buyers should ensure that the promise is backed up by a watertight contract.
Finally, he advised that buyers make sure that there is a resale market for the property so that they won't get stuck with it if prices tumble.
"In countries with a weak currency, any capital (gain) will be off set by weaker exchange over time," he said.
"Of course it will be a double whammy if price and currency exchange drop."
And if buyers plan to sell, Mr Neubronner said they need to make sure to check that the law allows them to take money from the sale out of the country.
This article was first published in The New Paper.
