S’porean investors are increasingly moving to safe asset classes: analysts

Analysts said more Singaporean investors are increasingly moving to conservative asset classes. Among them, properties Down Under.

Westpac Private Bank has seen 18 per cent of its Australia and New Zealand multi-currency home loans coming from Singapore in the past nine months, up by six percentage points over the same period last year.

They attribute the increase to poorer risk appetite after the recent global financial crisis.

Prices of private residential properties in Singapore have moved up significantly in the past few quarters.

Analysts said that has prompted investors to look elsewhere more specifically – Australia.

And cities like Melbourne, Perth and Sydney are popular among Singaporeans.

With some 8,000 Singaporeans studying in Australia currently, Westpac Private Bank said many parents are also considering buying real estate Down Under.

Sean Straton, head Premium Client Group, Westpac Banking, said: “Singaporeans have been looking for assistance in financing properties in Australia and New Zealand. And I think it just comes down to the heart of an asset class that Singaporeans feel comfortable with. And certainly after the crisis they feel that there’s some level of security.”

Market watcher Mortgage Choice said the median price for a property in Melbourne, is the highest, at almost S$530,000 while industry figures show that the median price of a private home in Singapore’s central region is S$1.66 million.

Islandwide, the median price of a private residential unit in the city state is S$1.12 million.

Although properties Down Under may seem more affordable, analysts warn that the Australia property market might be overheating.

A concern fuelled by potential influx of immigrants and investors, and a limited supply of homes.

Wong Sui Jau, GM, Fundsupermart, said: “Now there’re concerns that local Australians are being priced out of the property market. So because of that, there might be certain measures taken by the Australia government to at least make sure that at least the local Australians are not actually priced out of the property market by foreigners coming in.”

However, analysts noted that the recent interest rate hikes to some 4.5 per cent in Australia could help to soften demand.

Source: Channel News Asia, 7 Jul 2010