Singapore property: vacuum it up

James Dyson’s cheery demonstrations on how to vacuum are more instructive than his real estate moves. The British appliances billionaire has reportedly agreed to sell his $54m Singapore penthouse at an $8m loss. Property prices are edging up in the Asian city state. Tech giants see it as a regional hub. Investors and developers should expect the trend to last.

As more companies move to Singapore, their employees add to demand for local housing. Prices for private residential properties rose 0.8 per cent in the third quarter, the largest increase for that quarter in seven years. The biggest increase of 3.3 per cent was in the outskirts of the city — where the city’s larger, quieter homes are found. The jump marks a continued turnround following negative growth in the first quarter.

Singapore is the beneficiary of the sour relations distancing Beijing from the US, and Chinese party bosses from Hong Kongers. Relative neutrality and decent infrastructure have lured Chinese giants for whom Singapore is an offshore tech centre that complements the domestic nexus of Shenzhen. Alibaba, Tencent and ByteDance have all taken up new office space this year.

Amazon and Tesla of the US have also contributed to more than 350,000 square feet of new office space sign-ups in Singapore this year. That is expected to grow another 50 per cent next year.

Average home prices in Singapore of about $1,500 a sq ft are just one-third what you have to pay in Hong Kong. Moreover, the Singapore dollar has continued to weaken against the US currency. Mainland Chinese buyers have started to return.

Shares of the biggest local developers — including CapitaLand, UOL Group and City Developments — are up about a tenth from a March low, reflecting signs of improvement. Even so, all three trade at just 0.6 times book value — a long-term low.

Asset values are set to rise, backed by record government stimulus. Doubling down on Singapore property has its appeal — even though Sir James, who still owns a bungalow there, is selling his flat.

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