Page 1


THE TEAM Managing Director/Publisher ALEXANDER KNIGHT alex@panashcomedia.com Managing Editor JENNIFER LS HARRISON editorial@panashcomedia.com Business Development Manager TREVOR WATLING trevor@panashcomedia.com

PUBLISHER’S NOTE Just across the water, north-west of Singapore, a new metropolis is taking shape. According CIMB, now that Khazanah (Malaysia’s government investment arm) have jumped into the fray and that international schools are springing up, Iskandar has taken a major shot of credibility to the arm. Along with the new schools, decent(ish) infrastructure and bungalows, such as the Horizon Hills development currently going for around S$230 (US$184) per square foot (as opposed to Singapore’s District 10, currently running at an average of S$2,000 per square foot), Iskandar is beginning to look particularly attractive. This issue looks at houses, or landed properties as they are otherwise known as, and compares and contrasts what bang can be bought for your buck. With London and Tokyo running at over US$2,400 per square foot, a million greenbacks doesn’t really get you much more than a onebedroom apartment, whereas in Sydney, it will get you a reasonably sized four-bedroom house, just a walking distance from the iconic Opera House. The year 2013 is shaping up to be an interesting year in the global property markets. The USA is rebounding and there is wealth of excellent inventory on sale at rock-bottom prices. London is still on the up, and plainly an excellent investment opportunity. Australian Property Monitors reports that the national average house price in the country rose 2.1% in 2012, reversing much of the 3.6% decline of 2011 – and it’s projected to continue in that direction this year too. With the cooling measures kicking in in Singapore, overseas property has never looked quite so attractive and with low mortgage rates, finance has never been cheaper. However, caveat emptor is even more relevant now than ever; according to The Daily Mail, ‘Harlequin Resorts, which apparently now looks derelict and nothing like the promotional materials... seems to have preyed on 3,000 Britons, who have fallen victim to a £250 million (US$380 million) fantasy villa fiasco that was promoted by Pat Cash and is now being investigated by UK fraud police.’

Editor-in-Chief RODEL AMBAS, JR. editorial@panashcomedia.com Design and Production ARIF VILLANUEVA ADIL production@panashcomedia.com Head of Sales BENSON LAI advertising@panashcomedia.com Sales Executive CHRISTINA MENG christina@panashcomedia.com Contributors STEVE MALLACH KRITI JINDAL HEZRON OCHIEL ALBERT FONTENOT Circulation and Distribution SASHA RITZER circulation@panashcomedia.com GET YOUR FREE SUBSCRIPTION AT http://www.propertylife.asia/subscription.html or email us at subs@panashcomedia.com DOWNLOAD OUR iPad and iPhone app from the Apple App Store We really want your feedback! Please contact us: Tel: +65 6534 9390 email: info@panashcomedia.com

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Alexander Knight

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Contents APRIL–MAY 2013

20

Landed houses around the world Villas, bungalows and detached houses in the world’s most vibrant markets

24

32 29 43

ON THE COVER

| LAND, WATER AND HOUSE

Designed by acclaimed Italian architect Claudio Silvestrin, this luxury waterfront property by YTL Land is located within the ultra-exclusive Sandy Island on Sentosa Cove, Singapore. Winner of the Best Residential (Low-Rise) Property at the 2012 FIABCI – Singapore Property Awards, Best Architectural Design at the 2011 South-East Asia Property Awards, and Best Development (Singapore) at the 2009 CNBC Asia Pacific Residential Property Awards. PHOTO BY ALBERT KS LIM


Contents

36 56

APRIL–MAY 2013

18

62 70

FEATURES

PROBLEM, MASTER OF CURVES NEW (COOLING) MEASURES 56 14 OLD 70 LETTING?YOU NEED HELP! Oscar Niemeyer’s designs may once have been called gratuitous, but his contributions to architecture is undeniable

Singapore’s new round of measures to curb its red-hot housing market

Even small-scale investors will do well seeking a property management service

THE CUTTING-EDGE DIGS RETIREMENT SHORTFALL... 60 16 BEWARE 72 A DROP OF CLEAN WATER High-tech homes are no longer the domain of the extremely rich

What does your retirement look like?

DOWN UNDER 18 CONUNDRUM

The future looks bright for Australia, but only if it keeps adding more people

42

WHY ARIZONA?

Property Life spoke with Arizona real-estate agent, Sue Books, and asked her what makes the 48th US state the place to be right now

62 DESIGN PURPOSE

GFAB’s Gary Fell on sustainability, roof issues, and why he sparingly uses curves

66

SALES SENSE

How to prepare and decorate your house and garden for a viewing

Water piped right into your home is a luxury. For those without, life is a daily struggle

REGULARS

08 74

NEWS

83

PROPERTY INVESTMENT

COUNTRY GUIDES by James Harrison


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NEWS A P RIL — M AY 2013

Where rich Americans live

Not all American metro areas are created equal. And this is true when it comes to household incomes – some host a greater number of richer households than others. Leading the pack, unsurprisingly, is the Bridgeport-Stamford-Norwalk area of Connecticut, a region just north of New York City and home to many hedge funds. According to the US Census Bureau, 17.9% of those in the area bring in more than US$191,469 per year. This is followed closely by the tech-heavy San Jose-Sunnyvale-Santa Clara region in California, also known as Silicon Valley.

P R O P O R TIO N O F HIGH- IN COME HOUSEHOLDS 6 WASHINGTON MONTANA

10 OREGON

CALIFORNIA

SAN FRANCISCO OAKLAND FREMONT

ILLINOIS

NEVADA

WEST VIRGINIA COLORADO

KANSAS

MISSOURI

CALIFORNIA

KENTUCKY

OKLAHOMA

SAN JOSE SUNNYVALE SANTA CLARA CALIFORNIA

15.9%

ARIZONA

NEW MEXICO

SOUTH CAROLINA

ARKANSAS MISSISSIPPI ALABAMA

7 OXNARD THOUSAND OAKS VENTURA CALIFORNIA

9.7%

SINGAPORE

Thanks to its fast broadband, Singapore is a rising tech hub. Just ask Facebook co-founder Eduardo Saverin, who moved there and renounced his US citizenship.

8

17.9%

NEW JERSEY

3

11.6%

14.1%

BOULDER

FLORIDA

COLORADO

9.4%

Lightning fast mbps

CONNECTICUT

VIRGINIA, MARYLAND AND WEST VIRGINIA

LOUISIANA

Percentage of households earning at least US$191,469 annually, putting them in the top 5% of US incomes.

30.7

BRIDGEPORT STAMFORD NORWALK

WASHINGTON, DC ARLINGTON ALEXANDRIA

GEORGIA

TEXAS

9

5 TRENTON EWING

VIRGINIA NORTH CAROLINA

TENNESSEE

2

NEW JERSEY DELAWARE MARYLAND

INDIANA

UTAH

CALIFORNIA

13.0%

OHIO

1

CONNECTICUT

PENNSYLVANIA

IOWA

9.7%

MASSACHUSETTS NEW YORK

MICHIGAN

NEBRASKA

MASSACHUSETTS

NEW HAMPSHIRE

WISCONSIN

WYOMING

4

MAINE

10.0%

SOUTH DAKOTA

IDAHO

9.3%

BOSTON CAMBRIDGE QUINCY

NEW YORK, NEW JERSEY AND PENNSYLVANIA VERMONT

NORTH DAKOTA MINNESOTA

NAPA

8

NEW YORK NORTHERN NEW JERSEY LONG ISLAND

30.9 mbps

ISRAEL

It’s no wonder Israel is fast becoming a Web startup centre – its Internet is lightning fast. In fact, a recent study by researcher Startup Genome found Tel Aviv to be the best place for startups, just a notch below Silicon Valley.

SOURCE US CENSUS BUREAU, 2007-2011

So where on earth can you download an HD movie in record time? Any of these countries, according to the quarterly Internet report from Akamai Technologies.

32.1 mbps

BULGARIA

Low taxes, cheap labour and very fast Internet are Bulgaria’s major selling points.

32.4 mbps

SWITZERLAND How else can the Swiss maintain their standing as the one of the world’s major financial hubs?

32.7 mbps

BELGIUM

Belgium’s Internet is slightly faster than Switzerland’s, and at that speed, one can download an HD movie in about 6 minutes.


NEWS A P R I L — MAY 2013

Now before you have a Big Mac...

Posting staff to Hong Kong?

BY THE

NUMBERS

I I

f you don’t believe that wages globally are rising, why don’t you take a trip to the nearest McDonald’s and check out what people are ordering. According to a report released by UBS, in 2012 people need to work relatively shorter to be able to afford a Big Mac. Tokyo workers need only work for 9 minutes before they can bite into their burger, while in Western Europe the average is 17 minutes. Tokyo

9 mins

f you run a multinational company and plan to send some staff to Hong Kong, expect to dig deep, as the city’s apartments command very steep monthly rents. In fact, they’re among the world’s priciest, according to the latest accommodation data released by human resource and solutions provider ECA International. Monthly rents for an unfurnished three-bedroom apartment in Hong Kong’s sought-after areas average US$11,550. In contrast, similar apartments in Caracas command monthly rents of US$9,090, making the Venezuelan capital the most expensive in the Americas, overtaking New York.

1

Hong Kong

10 mins

2

Caracas

$9,090 per month

Chicago

11 mins

3

New York

$9,020 per month

Los Angeles

11 mins

4

Moscow

$8,874 per month

Luxembourg

11 mins

5

Tokyo

$8,726 per month

Toronto

11 mins

6

London

$7,859 per month

Dubai

12 mins

7

Bogota

$5,640 per month

Miami

12 mins

8

Singapore

$5,510 per month

Nicosia

12 mins

9

Lagos

$5,725 per month

Sydney

12 mins

Rio de Janeiro

$5,067 per month

10

UBS WEALTH MANAGEMENT RESEARCH (SEPT. 2012)

$3,030

The average monthly rent, in US dollars, of luxury threebedroom apartments across the globe in 2012, according to ECA International

$50

BILLION

$11,550 per month

10 mins

New York City

SOURCE

Number of people added to the population of major Asian cities each day, according to the Asian Development Bank

Here are the top 10 most expensive locations for high-end, three-bedroom rental apartments (in US dollars)

Hong Kong

Price of product divided by the weighted net hourly wage in 15 professions.

120,000

Expected cost of staging the 2014 Winter Olympics, in US dollars, to be hosted by Sochi, Russia, according to news agency RIA Novosti. The 2010 Winter Olympics in Vancouver cost US$3.6 billion to stage

$8 TRILLION

Data were collected in September 2012 and have been converted into US dollars using the September 2012 exchange rate. SOURCE ECA INTERNATIONAL

Amount needed, in US dollars, to be invested in infrastructure in the Asia region through 2020, according to the Asian Development Bank

The rankings, which cover July through September of last year, are based on average peak connection speeds. SOURCE BLOOMBERG.COM

37.4 mbps

ROMANIA

Bad news: according to the report, Romania is the only country in the top 10 to see its average peak speed ‘fall’ from the previous quarter. Good news: it’s still very fast.

37.5 mbps

LATVIA

This tiny Baltic state is not considered technologically advanced – for now. But that may change in a few years. Its forward-thinking government gives plenty of support to the country’s telecommunication infrastructure.

42.2 mbps

JAPAN

Although its electronics industry is losing its edge (think Sony), Japan’s telecommunications technology is very much on top of its game.

48.8 mbps

SOUTH KOREA

South Koreans are obsessed with online games; hence, the country’s Internet connection should be so fast, or you know what would happen (Internet gamers going mad).

54.1 mbps

HONG KONG

The ‘godfather of broadband’, Hong Kong engineer and Nobel Prize winner Charles Kao, will be so proud. Internet access in Hong Kong is blazing fast, very affordable, and virtually censorship-free.

9


NEWS A P RIL — M AY 2013

Guess how much you need to pay for these… (prices in US dollars) BANGKOK

JAKARTA

KUALA LUMPUR

MANILA

$1,770

SINGAPORE

$2,050

$1,330

$1,980

$4,200

$3.36

$2.99

$3.59

$2.70

$4.41

$1.88

$1.65

$2.04

$1.74

$2.48

$11.36

$8.09

$8.05

$9.11

$16.84

$1.28

$0.79

$0.62

$1.25

$1.71

$117.60

$68.56

$90.18

$87.80

$96.22

$320

$320

$220

$300

$510

RENT

120-square-metre apartment per month SOURCE JONES LANG LASALLE

STARBUCKS LATTE 12 ounces

MILK 1 litre SOURCE www.expatistan.com

2 MOVIE TICKETS SOURCE www.expatistan.com

GASOLINE 1 litre SOURCE www.expatistan.com

PAIR OF TRAINERS Nike SOURCE www.numbeo.com

HOTEL STAY

Double room plus breakfast for two at a deluxe hotel SOURCE UBS PRICES AND EARNINGS 2012

Cities that matter to high-net-worth individuals in

LONDON

25%

NEW YORK

14%

SINGAPORE

11%

HONG KONG

9%

2013

(and percentage of respondents who said so) SOURCE THE WEALTH REPORT 2013 PHOTOS © WIKIMEDIA COMMONS

10

GENEVA

4%

SHANGHAI

3%

DUBAI

3%

MIAMI

3%

PARIS

3%

BEIJING

3%


NEWS A P RIL — M AY 2013

South-East Asia’s

billionaires Forbes’ annual billionaires list is out. While there are familiar names in this year’s top 10 (Carlos Slim, Bill Gates, Amancio Ortega and Warren Buffett), there are some who saw their fortunes multiply (Liliane Bettencourt, Charles Koch) and dwindle (Eike Batista, Stefan Persson) compared to a year earlier. At number 8 and US$5.5 billion richer, Hong Kong’s Li Ka-Shing remains Asia’s richest man (2013 net worth of US$31 billion), ahead of India’s Mukesh Ambani (number 22). How did the extremely well-heeled in South-East Asia fare? Let’s take a look.

Asia’s richest man Li Ka-Shing

8

NO. At least half of them are involved or have stakes in real estate, with Singapore’s Robert and Philip Ng of Far East Organization leading the pack (US$10.1 billion). One in six private homes in Singapore is by Far East Organization.

108

NO.

58

NO.

25

INDONESIA

10

SINGAPORE

11

PHILIPPINES

10

THAILAND

10

MALAYSIA

1

VIETNAM

Their combined wealth amounts to

US$215,550,000,000,

which is just under the Philippines’ GDP of

US$240,660,000,000, but way above Vietnam’s

US$137,000,000,000. 12

At number 58, Thailand’s Danin Chearavanont is South-East Asia’s richest, with a net worth of US$14.3 billion.

68

NO.

He is followed by mall operator Henry Sy (number 68, US$13.2 billion) of the Philippines.

974

NO.

Vietnam’s first billionaire is 44-year-old Pham Nhat Vuong of VinGroup (number 974, US$1.5 billion).


Becket Hall, Canterbury Student Village, UK

The Only New Project Development in Canterbury We are delighted to introduce you to Becket Hall, Phase 1 of Canterbury Student Village. Ranked 14th in the top UK cities with the best opportunities for student investment in 2012: Canterbury is home to four Universities with a total student population of over 46,000. There is a massive demand for high quality student accommodation in Canterbury. with 26,260 full time students between the two main Universities. (The University of Kent and Canterbury Christ Church University), only 22.8 % of those can be housed in University run accomodation. Becket Hall is Excellently placed to meet this demand. • Hotel style student accomodation • Prices from just £59,995 • 40 student bedrooms over 4 floors • Range of student pods and studios • Limited opportunity to purchase river view unit at no premium • Excellent assured Yield of 8.33% for 5 years • Developer buy-back option 115% • Quality furniture and fittings • Secure development with cctv cameras • On-site laundry facilities and cycle storage • Fantastic Canterbury location near to all 4 Universities • Ready from September 2013 • Fully managed investment

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First Select Company Ltd Two Pacific Place 142 Sukhumvit Road 17th Floor, Unit 1703, Klongtoey Bangkok 10110, Thailand


COMMENTARY A P RIL — M AY 2013

Old problems,

new (cooling) measures Singapore introduced a new round of measures to curb its red-hot housing market. How do these bode for homebuyers and investors? By Michael Lim HIGH, HIGHER, HIGHEST Singapore homes are getting pricier, so expect more cooling measures

T

he Singapore government last year introduced new property cooling measures that took effect on 12 January 2013. The government’s intention is to curb excessive real-estate speculation, which in turn is fuelled by low interest rates and high liquidity in the economy. Deputy prime minister and finance minister Tharman Shanmugaratnam said, ‘The reality we face is that interest rates are extraordinarily low, globally and in Singapore, and continue to add fuel to our property market. We have to take this further round of measures now to check recent market trends and avoid a more serious correction in prices further down the road.’ This was the seventh round of tightening measures, and one through which the government had more effectively stamped out speculative demand from property investors. These new measures are also crafted such that they will not impact most Singaporeans buying their first home. In fact, any reduction in property prices will benefit genuine homebuyers and new families.

14

The new round of cooling measures primarily comprise an increase in Additional Buyers’ Stamp Duty (ABSD) and a reduction in loan-to-value (LTV) eligibility, which are detailed below: New ABSD rates payable on purchase CITIZENSHIP

FIRST PURCHASE

SECOND PURCHASE

THIRD PURCHASE

Singaporeans

Nil

7% (previously nil)

10% (previously 3%)

5% (previously nil)

10% (previously 3%)

10% (previously 3%)

Permanent residents Foreigners and non-individuals*

15% (previously 10%)

*Exclude foreigners from the USA, Lichtenstein, Switzerland and Norway who will get same treatment as Singaporeans.

New LTV ratio BORROWER’S PROFILE

Individual

Companies

HOUSING LOAN #

LTV LIMIT Loan tenure up to 30 years and loan period up to 65 years of age

Loan tenure >30 years or loan extends beyond 65 years of age

First

80% (no change)

60% (no change)

Second

50% (previously 60%)

30% (previously 40%)

Third and onwards

40% (previously 60%)

20% (previously 40%)

20% (previously 40%)

Note that the ABSD is in addition to the standard 3% stamp duty payable on any property purchase, the latter being applicable regardless of the purchaser’s citizenship.


COMMENTARY A P R I L — MAY 2013

BUT NOT THESE The government’s HDB flats are not to be affected, say analysts.

Prior to the latest cooling measures, the fourth quarter of 2012 recorded an overall increase in demand quarter-on-quarter. Primary and secondary sales based on caveats Type of sale

Q4 2012

q-o-q change

2012

y-o-y change

Primary

4,179

12%

17,619

20.7%

Secondary

3,997

–8%

15,555

–7.0%

Total

8,176

1%

33,174

5.9%

NOTE Primary sales refers to sales of new houses by developers, and secondary sales to sales of existing properties by individual owners.

As of press time, Real Estate Statistics for the first quarter of 2013 has not yet been released by the Urban Redevelopment Authority. This new information will clearly show the impact of the cooling measures on the property market in the following quarter. Readers, however, may go to this website in or after early April to look out for its release: www.ura.gov.sg/ pr/text/media-room.htm. While these new rules may be effective in controlling property prices, they are only necessary temporarily. They would probably be reviewed by the government in the future, as it responds to prevailing market conditions.

SINGAPORE BUDGET 2013: NEW PROGRESSIVE PROPERTY TAX The Singapore government’s budget is prepared for each financial year, which begins on 1 April and ends on 31 March of the next calendar year. This year, Tharman Shanmugaratnam delivered the 2013 Budget Statement in Parliament last 25 February 2013, which sets out the strategies and directions for building a better Singapore and to achieve quality growth and an inclusive society. This year’s budget included the announcement of new government measures pertaining to real estate. Addressing the issues of public housing, the govern-

SOURCE URA REALIS

ment said that it will reduce the cost of houses relative to income of young Singaporeans, as prices of HDB flats have been rising rapidly since 2009. (About 80% of Singapore citizens own governmentsubsidized flats built by the HDB.) And at the same time, ‘those who live in the more expensive homes should pay higher taxes,’ Tharman said. Going forward, the government wants the majority of homeowners to be paying less property taxes, while owners of more expensive properties to be paying more. In summary, for owner-occupied residential properties, the progressivity of the tax structure will be enhanced through: u

Lower property tax rates for 950,000 or 99% of homes

u

Higher property tax rates for the top 1% of homes (the increase in property tax will be small except for those at the very top-end)

For non-owner-occupied residential properties, there will be: u

No change in property tax rate for 112,000 or 67% of properties

u

Higher property tax rate for the top 33%

Currently, the property tax rate for non-owner-occupied properties is flat at 10%. New marginal tax rates of up to

20% will be introduced, which will only be significant for high-end investment properties. For example, a suburban condominium will have S$300 (S$1 = US$0.80 as of March 2013) per year increase in tax while a high-end property with an annual value (the estimated rental income per annum of a property) of S$150,000 will have S$9,000 per year tax hike. This new tax structure for residential properties will be phased over two years starting 1 January 2014. To summarise, there will most likely be a reduction in demand in Singapore’s private residential property market due to the new cooling measures. However, the primary market will probably be minimally affected due to the incentives and discounts given by developers in the short term. On the other hand, demand for high-end properties may weaken due to the cooling measures and the new property tax structure announced during the 2013 Budget. And as expected, other segments of the residential market, like the rental market or the HDB flats market, are not directly affected by these new measures.

Michael Lim is a highly trained and very experienced Singapore real estate agent. In the last decade, he has successfully represented his clients to close multimillion deals involving high-end residential, industrial and commercial properties. Currently, he is active in helping his clients to pursue attractive real estate deals in Singapore, London and the upcoming Iskandar development in Malaysia. He specialises in servicing top bankers, businessmen and executives from Singapore, Europe and the rest of South-East Asia region. For feedback or queries, you may email Michael at richtown88@gmail.com. You may also visit www.DTZsingapore.sg.

15


COMMENTARY A P RIL — M AY 2013

Beware the retirement shortfall... What does your retirement look like? By James Norman

A

s an individual staring my 30s in the face, you may not think I care much about my own retirement plans and just focus on the needs of the individuals I meet with, many of whom are mid-career, with kids and only just starting to think about their own retirement. You couldn’t be more wrong. I practice what I preach. After reading a recent HSBC report called ‘The Future of Retirement’, I was shocked to learn quite how underprepared individuals are in many of the world’s developed nations in terms of their own retirement plans. A huge ‘pensions shortfall’ exists globally. Of the nations and individuals surveyed, retirement savings on average expect to run out at around the halfway point through retirement (56%). The UK shockingly had the worst pension shortfall in the world with their retirement savings expected to last for 37% of their retirement. That begs the question: What does your retirement look like? How does this compare to what you want it to look like? Let’s explore the notion of retirement. Many of us hope to enjoy a comfortable, care-free retirement with an abundance of travel, good health, relaxation and time to enjoy our hobbies. It’s the time in our lives that we should all be working towards. By retirement, hopefully, the kids have flown the nest, the mortgage is paid off and you are burden-free. Is this a realistic thing to aim for and how do you get there? From a financial perspective, it’s important to consider first what you want your retirement to look like, then start making plans towards making it happen.

16

THE EARLIER, THE BETTER My preference starts with working out exactly what income you want in retirement. Would you be happy on your current income in retirement? Do you expect to spend more money when you have seven days a week of leisure time to spend it? Most people say yes. Consider retirement as a seven-day-a-week holiday. If you plan for this right, then it can happen. Plan for it wrongly, then, well, I hope you enjoy activities that don’t cost much money! Or worst case, you may have to go back to work mid-retirement or rely on family support.

In retirement, you need to pay yourself an income from a pool of money. You certainly don’t want it to run out. Once you have your annual income number, multiply it by 20. Why? In retirement, you need to pay yourself an income from a pool of money, factoring in inflation. This pool of money cannot diminish (at least not significantly) since you don’t

know the date of your death. You certainly don’t want it to run out. Life expectancies are continuing to rise so we must be prepared. In retirement, this pool is your only source of income; so a fairly balanced return should be expected, say, 7%. Taking out 2% inflation you can take 5% out per year as income without the pool shrinking. This, therefore, determines the size of your retirement pool required. The following are examples (the figures on the left are the annual income required in retirement while those on the right are the retirement pool required): US$50,000

US$1 million

US$100,000

US$2 million

US$500,000

US$10 million

How do you get there? There is just one way (or two) to reach your goal by your proposed retirement age: save and invest. But what can you save into? There are a number of different sources of funds and vehicles you can use with the specific purpose of saving for retirement. The suitability and availability of these are determined by where you live in the world.

1

EMPLOYMENT INCOME This will no doubt form the majority of most people’s retirement savings. Once you’ve created a cash-cushion (money for a rainy day, which is advisable to be 3–6 months’ earnings), write down your employment income and subtract living expenses. What remains is available to save for the long-term. You should expect to save 10–20% of net income. If what remains to save is less than this, it’s advisable to adjust your lifestyle. This cash can then be saved into a wide range of suitable, well-managed, long-term investment structures, including private pensions, offshore savings plans and other tax-efficient investment platforms.

2

EMPLOYER/GOVERNMENTSPONSORED RETIREMENT SCHEMES Available in most countries, these involve your employer matching a certain percentage of your pension contribution. For example, should you pay in 5% of your sal-


COMMENTARY A P R I L — MAY 2013

ary, and your employer may match it with 5% themselves. Government-approved schemes also exist in many countries, such as Singapore’s CPF, which requires up to a mandatory 20% employee contribution (subject to income) matched by up to a 16% employer contribution. The USA also has the IRA/401k and Australia, the Superannuation. Most of these schemes allow you to pay in your pre-tax income so you don’t pay any income tax on contributions.

3

SOCIAL SECURITY Certain countries provide a small income benefit to their population at a statutory retirement age. These schemes are funded by the working populations’ tax revenue. The UK, for example, has a state pension with a maximum weekly benefit of £107.45 (US$162.41) available from the age of 65 for men and 60 for women. As governments are faced with austerity measures and life expectancy continues to rise, so does the qualify age; the security and value of these schemes, therefore, hang in the balance – so it’s unlikely they’ll be around forever.

4

LIFE INSURANCE PRODUCTS At retirement age it is possible to purchase annuities from life insurance companies who will purchase your private, company or government pension in exchange for a guaranteed income for life. Term life insurance can also guarantee your loved ones have a sufficient nest egg should you suffer a critical illness or pass away. Whole life insurance, on the other hand, also includes an investment component and builds cash value against which you can take out a loan. Whole life insurance is usually a lot more expensive and many financial professionals (myself included) project that it may be wise to purchase term life and use the extra money to fund an offshore savings plan or private pension.

5

CURRENT SAVINGS AND INVESTMENTS If you already have a sizeable investment portfolio, it may be sufficient to cover your retirement needs all by itself. If you have yet to begin saving for your retirement or are coming into the retirement-planning game late, you will need to

compensate for your lack of current savings with greater ongoing contributions.

6

OTHERS Perhaps you’re expecting to receive an inheritance from your parents before you reach retirement age or have assets including property that you plan to sell before retiring (or perhaps rent out to generate an income in retirement). Whatever additional sources of funds you have, be sure to include them in your retirement projections only if they are certain to occur. You may be expecting a large inheritance, but your family may have other plans (such as donating them to charity or other family members). Your overall retirement funds need to be diversified. If it’s 100% cash and interest rates are at Singapore, UK, European or US levels, then this will be quickly eroded, especially if inflation is running at 2–4% as it is in most of the world. If you’re 100% in property, then I hope you own them outright, otherwise you run the risk of rental income simply paying the mortgage and not providing a sustainable income source. Your retirement pool, therefore, should be made up of a variety of diversified assets – including property, some cash, life insurance, private/government pensions and other investments that provide an income hopefully at or above the 7% rate mentioned earlier.

COMPOUND INTEREST: THE MOST POWERFUL FORCE IN THE UNIVERSE! Given the size of the retirement fund you need, starting sooner rather than later is important. One of the most significant aspects affecting the size of your eventual retirement pot is the length of time you save for because of compound interest – interest on top of interest. In fact, it is often more important how long you save for rather than how much you save. Consider the following simple example.

AGE

BEN

LOUISE

20

10,090

0

21

20,998

0

22

32,888

0

23

45,848

0

24

59,974

0

25

75,372

0

30

175,816

0

35

330,362

16,350

40

568,150

114,927

50

1,496,946

499,968

55

2,363,084

859,034

60

3,695,745

1,411,501

65

5,746,210

2,261,540

Total

450,000

450,000

Ben started saving US$10,000 per year at age 20, while Louise started saving US$15,000 per year at age 35. They both want to retire at age 65. Assuming 9% return per year, who has more money? As you can see by the table, over the time frame they have both saved $450,000; however, Ben’s retirement pool is worth about 60% more, US$5.75 million (or roughly US$290,000 per year), whereas Louise’s is worth US$2.26 million (or roughly US$113,000 per year). The fact is, assuming the above growth rates (which are achievable at this time), by avoiding to plan for retirement by one year, you need to save 12% more per year for every year afterwards just to reach the same goal. Therefore, defer by five years and you have to save 60% more each year to reach the same goal (or retire five years later). So start early – as small as it may be. So let’s return to the original question: what does your retirement look like? Mine is certainly starting to look comfortable, considering the earlier example. I’m not intending to retire any time soon, but I know I’m doing something so compound interest is working its magic. It’s never too early to start saving.

James Norman is a columnist with 8 years’ experience in finance. He obtained his BSc degree in Economics and Finance from Southampton University, and has been based in Singapore for nearly two years where he’s been working as a qualified Wealth Management Consultant for The Henley Group. To share your views with James or to find out more about him, email jn@thehenleygroup.com.sg.

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COMMENTARY A P RIL — M AY 2013

Conundrum

Down Under Plenty of talk about Australia s housing shortage. But what if the time comes when nobody s left to buy? By Scott O. Talbot

W

e don’t have to look too far on the Internet for opinions, seminar sprookers* and doomsayers offering enlightenment and crystal ball advice on the Australian property market and opportunities. Without doubt, even industry experts are perplexed by the mixed messages and agendas of the contributors. The truth of the matter is, understanding or predicting the Australian realestate market is about making ‘babies’, and it is joined at the hip of immigration policies of the government, the mining sector, and the economic prosperity of the country-- not the opinions of realtors and seminar sprookers. On a recent business trip to Hong Kong, I caught up with an old friend and philanthropist-mentor from my days in New York City politics. A former Managing Director of Citibank, with US$8 billion in his portfolio, friend with the Buffett’s, a board member of my charity and *A sprooker is a seminar speaker we see at property fairs or the like who will say anything to earn a sale's commission.

18

the type of person you look up to for highlevel opinions and knowledge. I will refer to my friend as Steve. Getting the topic of economic turmoil and the troubles of Europe and the USA out of the way, Steve in his loud American accent declared that ‘there is nothing intelligent about [Australia’s] economy or politics.’ Slightly offended, but more curious to the contextual meaning of this statement, he continued explaining. ‘Scott, to understand why Australia didn’t even get a cold during the [global financial crisis], and to this day stands at the top of the economic ladder, you have to understand the principles of making babies.’ As I did, I thought a few too many drinks, but he continued.

‘You have three distinct economies in Australia,’ he said. First economy is Mining. You simply scoop it out of the ground ship it to China and buy some merchandise back along with the rest of the world. You have so many resources in the ground that this will continue forever as long as the world consumes. China will still place its orders, and Australia will continue to profit from digging it out of the ground. Second economy is Food. Australia is feeding the world. As everyone has seen in the press, China has been busy buying up farmland and over 50% of certain fresh produce in Singapore is from Australia. This is of no surprise to myself -- I was in Nanjing, China, recently and enjoyed an


COMMENTARY A P R I L — MAY 2013

TOTAL FER T IL IT Y RAT E 2.9

GOING, GOING, GONE Population ageing is caused by two factors. First, Australian families are, on average, having fewer children. Birth rates started to decline in the late 1960s, and have been falling ever since. For the last 20 years or so, birth rate has fallen below the replacement rate. It means without migration, Australia’s population would eventually begin to fall.

2.7 2.5

SOURCE WWW.TREASURY.GOV.AU

2.3 2.1

R E P L A C E M E N T

R A T E

1987

1992

1.9 1.7

1972

1977

Australian steak, and tonight I am ordering home delivery in Beijing ‘Aussie Lamb Chops’. Third economy – if you ever have the pleasure of meeting Steve, you will appreciate some theatricals that coincide with the conversation – Steve picks up his beer and demonstrates Australia’s third economy. ‘No, it isn’t beer,’ he said. He pours a tiny drop into his glass and states, ‘Immigration. This, my friend Scott, is the most un-intelligent economic policy Australia has, that no other country in the world can produce.’ (Pour in a lot or pour in a little – immigrants verses the beer demonstration.) ‘You are making only 1.7 babies and as you know civilisation will soon be extinct if you’re not making 2.8+ babies per year. You will not need to build new homes, schools, and shopping centres, you will be in an economic slide to disaster this century.’ ‘Your country has the space, infrastructure, climate, stable government,

1982

and great economy, [and it has] no guns and a quality life unique in the world.’ Steve furthered: ‘These positive attributes can be said about a few countries; however, where your country wins is your undeniable popularity. Walk down a street in any country in the world and ask a simple question: 'Today, we are handing out passports. Which country would you like to live, work and raise your family?' The response is more likely: 'Australia.’ ‘This is the single most important 'un-intelligent' factor that secures your third economy.’ Indeed, apply this knowledge into simple supply and demand controls and you have an economic weapon against any unforeseen localised or global economic crisis. Oversupply of cars or housing? Hand out some $1 million - to $2 million-dollar visas and watch them arrive by the plane load ready to buy your houses, cars and furniture, eat in your restaurants, and send their children to

Scott O. Talbot is the Managing Director of UCHK Consulting Limited and one of Australia’s most respected international businessmen, community leaders and philanthropists. He has over 25 years of experience in strategic property investment, business development, politics and philanthropy.

1997

your schools. More consumers means productivity fixed in a flash. That being said, Australia’s economic policy is joined at the hip with immigration – open the immigration doors too widely, and you will have a boom-crisis on your hands that will overinflate every single market sector on simple supply and demand. Too much demand is probably your greatest economic concern. It needs to be a controlled, intelligent, sustainable growth policy, married to immigration. Australia is a nation built on immigration. Nearly 50% of Australians are either born overseas or have a parent born abroad. It has become a leading country because many ethnic groups have enriched it culturally, socially and economically. The Australian government wants 200,000 more immigrants this year for ‘population, participation, and productivity growth’. Don’t miss an opportunity to start a new life or investment in Australia.

UCHK Consulting Limited provides high-net-worth foreign property investors approved investment opportunities information and logistics. It offers opportunities to easily connect with investment properties with high potential for capital growth; knowledge and services for efficient planning and management of big and small property investments; innovative ways to increase and streamline investment returns; and market information and analysis to assist clients align their property investments with their wealth creation goals.

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FEATURE APRIL — M A Y 2013

Arizona USA

While shopping around for property in some of the world’s most expensive

BRAZIL

cities, it may come as a shock to learn what you can buy for the same money in other parts of the world. BY RODEL AMBAS JR.

PRICE-PER-PRICE

comparison shopping across the globe In this issue of Property Life we look into the housing markets of some of the world’s most expensive cities and ask, ‘What can you buy for the same money in more affordable locations?’ Our points of comparison include Tokyo, a city that features at the top of most cost-of-living studies, and two cities heavily influenced by the almighty petrodollar, Luanda and Moscow. Let’s start with the least likely suspect – Luanda, Angola.

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FEATURE A P R I L — MAY 2013

Tokyo Moscow RUSSIA

SOUTH EAST ENGLAND

Tokyo JAPAN

THAILAND

MALAYSIA SINGAPORE Luanda ANGOLA

AUSTRALIA

Luanda Scarred by decades-long civil war after its independence from Portugal in 1975, Angola’s capital seems unlikely to fill a spot in any most-expensive list. But like neighbouring African countries, Angola won the resource lottery. The country sits on a vast oil field, not to mention what seems like an infinite abundance of minerals. In fact, the International Monetary Fund says that oil export accounts for 50% of the country’s GDP. It’s not surprising that big oil companies are ubiquitous in Angola, along with the petrodollars they bring, flooding the economy. According to ECA International, the cost of living in Luanda is so high because almost everything needs to be imported. And when the country does import, it imposes very high taxes. A beer in a bar here costs US$7.38; a dozen eggs US$5.25 (almost a dollar more expensive than in Manhattan). To rent an apartment in Luanda costs a mind-boggling US$6,500 per month (based on 2011 figures and exchange rates) and The Economist reckons the same apartment will cost at least US$1 million to buy.

Moscow We’ve seen the Russian capital rise from being a rundown Soviet city into an economic powerhouse in just two decades. After its fall, oil money poured into Moscow, transforming its real-estate landscape to become one of Europe’s most active. And at US$8,874 per month, its luxury, three-bedroom apartments command the highest monthly rent in Europe, according to ECA International, perhaps a remnant of a massive housing boom that occurred between 2000 and 2007. The average price of an apartment in Russia is US$1,347 per square metre, with prices exceedingly higher in the capital city. To rent a 120-square-metre apartment in Moscow, for example, costs an average US$6,800 per month. To purchase the same apartment costs an average US$17,000 per square metre.

In the Land of the Rising Sun, Tokyo exudes a sort of techy atmosphere very few cities on earth can rival. Its economy is built on Japan’s technological edge and the sheer size of its consumer market. So what makes it so expensive? Being a mature economy sure has its perks. Japan has been a highly developed country since everybody can remember; hence, everything here works, including bureaucracy. The country also boasts a strong, prolandlord rental market, a stable political system, and low transaction costs, making a purchase here a relative ease. According to the ECA report, an unfurnished, three-bedroom apartment in Tokyo costs, on average, US$8,726 to rent (based on September 2012 figures and exchange rates). In addition, buying an apartment here costs, on average, US$15,122 per square metre, according to Global Property Guide. That means a small 70-square-metre apartment will cost just over US$1 million whereas a larger (by Tokyo standards) 200-square-metre apartment will cost an average US$3 million. Keeping in mind that these are averages – and just for apartments (we shudder to think of paying for a whole house in Tokyo) – it’s entirely possible to pay much more for a property depending on its precise location and quality of fittings.

By comparison While cost of living is one thing, the price of property may paint a different picture altogether. Tokyo is certainly one of the world’s most exciting cities, and expensive in almost every regard. But it also has an extremely high standard of living, life expectancy, and quality of education and health care. It’s nevertheless well worth investigating what else you can buy for US$15,122 per square metre. In places like Thailand, Brazil or Malaysia, where the cost of property is considerably less, the comparison is somewhat apparent. But what of more moderate to expensive markets, such as in South East England, suburban Australia, or the US state of Arizona? And how does Tokyo’s property market compare to Singapore, another Asian city also ranked as one of the most expensive places to live?

21


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FEATURE A P R I L — MAY 2013

Singapore

I

f you are a foreigner with deep pockets and are lucky enough to receive the blessing of the Singapore government, you can secure your dream home on this equatorial island. Described by many as ‘Asia Lite’, it offers an engaging South-East Asian experience with Western comforts and amenities. But even if you meet the stringent government requirements for landed home purchase, what does Singapore offer that other countries in the region might not? When Sir David Attenborough visited Singapore in the 1950s, he suggested that the trip was filled with hardship and the destination hardly worth the effort. It was the back of beyond, a series of small tin sheds on the shores of the not-too-sanitary Singapore River. Times have changed. The renaissance of Singapore as a sought-after property investment and lifestyle destination that began in the 1950s was powered by a forward-thinking leadership and an absolute commitment to the vision of a world-class financial and services-orientated economy.

SINGAPORE STYLE The city-state today boasts a glittering downtown skyline, a world-class infrastructure and a vibrant local and expatriate community. Visitors and islanders themselves can take advantage of opportunities to engage in some retail therapy in an environment that rivals the best that New York, Paris and London have to offer. Michelin-starred restaurants exist in a spirit of laissez-faire alongside hawker stalls where a few dollars can unlock the door to gastronomic paradise. In Singapore your diet goes out of the window and an afternoon on the city streets can add inches to the waistline, meaning more business for the bespoke tailors found all over the island.

TINY AND PRICEY Singaporeans live in a city where space is at a premium. Just check out the prices of landed properties here.

Here you will have access to some of the best medical care money (and your health insurance) can buy, sparklingly clean streets and a graffiti-free public transportation system (including MRT stations with floors so clean that you could enjoy your worldfamous chicken rice right off the tiles) that works on time, every time. A gridlock-free highway system that allows access to all parts of the island and across the Johor Strait causeway into neighbouring Malaysia makes travel by car both scenic and hassle free. Should you have children, they can be placed in private schooling or a tertiary education institution managed by some of the best names in the business. Leisure activities abound, all housed within Singapore’s famously safe and secure precincts. The combination of stable government, safety, security, a modern infrastructure and the easy availability of imported goods all factor into making the island tremendously attractive to foreign and domestic property buyers. Singapore has also been described in Time magazine as ‘The Hottest (Little)

23

PHOTO COURTESY OF SINGAPORE TOURISM BOARD

Much like its famous chicken rice, Singapore properties are safe and deliciously rewarding. And the city-state’s landed houses, though pricey, even more so. By Steve Mallach


FEATURE A P RIL — M AY 2013

Economy in the World’. The island hums with activity, downtown is abuzz with excitement and the government is worried that birth rates are falling too fast due to native Singaporeans’ absolute commitment to building wealth. No time for babies, lots of time for business. Putting down roots in this miniature powerhouse is like sticking your finger into the electrical socket of commerce (but in a good way). Singapore’s location at the crossroads of South-East Asia positions it as the ideal starting point for explorations of an area known for its natural splendour, vibrant cities and business opportunities. For these reasons Singapore today rivals Hong Kong as a property investment destination. Much of the property market in Singapore is driven by the ever more impressive condominium developments that are a characteristic of its skyline. However, there is also ample opportunity to invest in landed property and enjoy a unique synthesis of South-East Asian excitement and the comforts of a truly global metropolis. This bite-sized entrée to the Asian experience is certainly worth exploring.

CHIC RELICS Restored and refurbished shophouses are commanding steep prices, many of them now housing boutiques and charming eateries. Tanjong Pagar (above) and Haji Lane in Kampong Glam. PHOTOS COURTESY OF SINGAPORE TOURISM BOARD

JUST THE FACTS As a property investment destination Singapore continues to deliver. The value of private residential properties increased by 1.8% in the fourth quarter of 2012, compared to the 0.6% increase in the previous quarter. Although this shows a short-term slowdown in growth, this may be the result of a (hopefully) transient impact caused by the global economic downturn. Limited supply of certain classes of homes due to regulation and limited land area, as well as a growing population, are both going to play their part in making Singapore property a desirable investment. Government barriers to entry into the landed market for foreign nationals

24

(Singapore has imposed measures including 15% levies to slow down foreign investments that are overheating the property markets) may make buying into the high-end both frustrating and increasingly pricey. But those foreigners who succeed in their application for permanent residency - through their efforts to help power the island’s rapidly spinning engine of growth - are going to be greeted with open arms, and often a key to the front door of a new home. For the year 2012 year-on-year prices of private residential properties increased by 2.8%, when compared to a 5.9% increase in 2011 over 2010. This is reason for prudence and caution; however, this seemingly shortterm slowdown may be the result of aforesaid global macro-economic forces. This dip in the cost of ownership is serving to lower financial barriers to entry for investors (somewhat negated by government efforts at regulation), at least for the time being. Stepping back and viewing Singapore’s landed property prices over the last decade, however, shows a resilient market characterised by a steady increase in value. For the moment, and the foreseeable future, cost is not the only factor that influences the decision to purchase landed property in Singapore. There remain restrictions on foreign ownership of landed property in Singapore that apply to both foreigners and permanent residents (PRs). These restrictions affect those on the lookout for detached houses and bungalows, semi-detached houses, terraced houses, linked house and townhouses. Non-Singaporeans have to apply to the Land Dealings (Approval) Unit (LDAU) if they want to obtain permission to purchase these landed properties. Applicants have to fulfil certain criteria before approval is given, including being a Singapore PR and making a significant economic contribution to Singapore. Outright purchase is therefore not for everyone; however, the option of 99- and 999-year leasehold rights remain attractive to some potential owners. Although Singapore is only 712.4 square kilometres in size, making landed property a premium investment, the island-nation delivers when it comes to the variety of properties that are available. The choices available to the buyer mean that there are options to suit the requirements of almost any potential buyer, but you may have to look for spare change under the sofa cushions to make that dream purchase.


FEATURE A P R I L — MAY 2013

OLD AND NEW Chinatown with Singapore’s central business district in the background. PHOTO COURTESY OF SINGAPORE TOURISM BOARD

THE BUNGALOW BILL At the top of the property-shopping list are the Good Class Bungalows (GCBs), which are still seen by many foreigners as the most desirable residences available on the island. Given the fact that there are less than 2,500 of these homes available in 39 carefully gazetted areas, scarcity certainly plays its part in GCB pricing. Other factors positively influence the desirability of these properties, amongst these being that the home may not cover more than 35% of each site. As each plot is at minimum 1,400 square metres in size, this ensures that the nature of the GCB neighbourhoods is maintained through adequate green buffers between each house. The classification of GCBs as ‘bungalows’ by the Urban Redevelopment Authority (URA) of Singapore may be misleading; these are the highest of the high-end homes in Singapore and are usually purchased by Singapore high-net-worth individuals. There are unconfirmed reports of a five-room bungalow on 40,000 square feet of land (land and property are measured in square feet in otherwise metric Singapore) that was up for grabs for S$68 million (US$54.3 million) just off Singapore’s Holland Road. The property does have a swimming pool and a tennis court so perhaps these are factors contributing towards the astronomical price. In 2011, a 69,546-square-foot bungalow (at that size the availability of a pool and tennis court on the grounds is neither here nor there, you could host Wimbledon in your living room) at 23 Yarwood Avenue was sold for S$59.5 million (equivalent to US$45.22 million in 2011 exchange rate). This price point is neither the rule, nor the exception, but rather the result of market dynamics on a small island with a very desirable South-East Asian address. There are no immediate plans to release more land for the establishment of more GCB suburbs. Although from time to time large companies and, less frequently the Singapore government, do sell off large parcels of land, allowing for subdivisions that meet the minimum criteria for the construction of GCB property.

URBAN CHOICE Populating the rest of the short list of freehold landed properties available on the island are terraced houses, detached and semi-detached homes, and shophouses. Terraced homes share common walls with neighbours, unless they’re at the end of a row in which case they naturally only have one neighbour. Detached houses stand alone and semi-detached units only share one wall. Architectural styles range from ultra-modern to more traditional. Many foreign residents in Singapore view these types of homes as a first choice when purchasing property. The modern designs and construction materials, as well as the steady supply of new homes in various suburbs and locations on the island and the varied styles, are all factors that influence the decision to purchase. About 46% of the 3,361 new-home deals transacted by Singaporeans in the

first half of 2012 (the most recent publically available data at time of going to press) were in the S$500,000 to S$1 million (US$399,361–798,722) price range. This is the financial sweet spot that many potential buyers of terraced, detached and semi-detached homes are finding attractive. Breaking through the upper end of this price range are 3,700-square-foot freehold terraced houses that can cost upwards of S$3 million (US$2.39 million). These are not new units and many of them are approaching the end of their first decade of occupation. However, once again Singapore’s unique market and regulatory forces are at play, making homes in the upperend class in previously middle-class suburbs extremely expensive (when compared to homes in this class found elsewhere in South-East Asia).

25


FEATURE A P RIL — M AY 2013

SHOP ’TIL YOU DROP Shophouses are a unique part of the South-East Asian heritage and feature architectural styles that have been characterised as ‘Chinese baroque’ or ‘Singapore eclectic’. They are a rich and visually arresting mix of Malay, Chinese and European styles. These shophouses lend a unique feel to the streets of Singapore and are extremely desirable properties for both commercial and residential use. Theese pre–Second World War two- and threestorey terraced rows of low-rise buildings with narrow frontages and deep rears were originally designed with shops on the bottom and living units on the top. Shophouses are linked to the street by the aptly named ‘five-foot way’, so called due to the fact that the distance between the building and the street had to be exactly five feet.

This ruling was enforced by Singapore’s founder Sir Stamford Raffles, who in 1822 stipulated that ‘all houses constructed of brick or tile should have a uniform type front, each having a verandah of a certain depth, open to all sides as a continuous and open passage on each side of the street.’ This guideline has been faithfully followed, notably enriching the architectural heritage of Singapore. Today brightly coloured avant-garde shuttered shophouses line the streets of some of Singapore’s most desirable neighbourhoods. BY THE RIVER Riverside Point at Clarke Quay, where former warehouses once stood, are now hot nightspots. PHOTO BY KEVIN BENITTO HARTONO/ COURTESY OF SINGAPORE TOURISM BOARD

Acquiring a shophouse will require that the buyer check with URA’s conservation website to ensure if the shophouse fulfils certain criteria within conservation, restoration and plot ratio. The historically sensitive nature of the shophouses, combined with that fact that many of them are family heirlooms, tightly held and passed from generation to generation, makes these landed properties attractive as investments or owner-occupied residences. Needless to say, these properties can be extremely pricey. In 2010 a row of five shophouses on Amoy Street (developed in the 1830s as a part of the 1822 Raffles’ plan of Chinatown, today close to downtown and still filled with historically important buildings) was bought for S$24.5 million (equivalent to US$18.62 million in 2010 exchange rate) and sold for S$34.4 million (equivalent to US$28.2 million in 2011 exchange rate) a year later. Two units at Tanjong Pagar (‘Cape of Stakes’, a name that reflects its origins as a fishing village, now a sought-after centrally located suburb) bought for S$6.5 million (equivalent to US$4.2 million at the time of purchase) in 2009 were sold for an astounding S$12.5 million (equivalent to US$10.25 million at the time of sale) in 2011, making this one of the most profitable transactions on the island.

SENTOSA STYLE There is one enclave in Singapore that draws foreign ownership from diverse countries due to its special status. Sentosa Cove is the only place in Singapore where even non-Singapore PR status foreigners may purchase a landed home, although subject to obtaining LDAU approval. Sentosa Cove is located on the scenic east coast of Singapore, minutes from the commercial downtown. Houses here offer the best of island living with architecturally unique properties nestled up against a natural tropical backdrop with views over the tranquil marina set. A landed bungalow was recently put up for sale in Sentosa Cove at $22.98 million (US$18.35 million). Prices both considerably lower and much higher than this are the norm, but this neighbourhood, just off Singapore’s Marina, is highly sought after.

26


FEATURE A P R I L — MAY 2013

Foreigners granted approval to buy a landed home in Singapore, including at Sentosa Cove, are required to use the property for their own occupation and are only allowed to own one landed home in Singapore. At Sentosa prices, perhaps it’s better to avoid the temptation of a second home on the island.

WHAT’S THE SECRET INGREDIENT? Owning freehold property in Singapore may be a counterintuitive choice, given that other options are available in the region and that prices are still extremely high. For instance, Malaysia is offering landed prop-

erty at a faction of the price of Singapore. Yet there are other factors that must be weighed prior to making the decision to purchase landed property. All things being equal (same location, same size, etc.), freehold property will cost 10–15% more than leasehold and potential foreign owners need to jump through regulatory hoops in order to get permission to buy. Why, then, is Singapore still regarded as such a desirable investment and lifestyle destination? The answer may lie in the mantra that guides many property-purchasing decisions: location, location, location. Adding stability, security, capital appreciation, a world-class infrastructure and the ability

to reach the rest of Asia in a heartbeat to a soupcon of delicious Asian cuisine and you have the recipe for success and fine living. A last word from Anthony Bourdain, gastro-traveller extraordinaire: ‘New York may be the city that never sleeps, but Singapore is the city that never stops eating. If there’s one dish that’s a must-try, it’s chicken rice. You may not like it the best, but it’s the dish that just might lead you to understand Singapore better.’ That’s the essence of Singapore right there. A dish that’s safe, fun, deliciously rewarding and an entry point into the flavourful world of excitement that is SouthEast Asia.

S I N G A P O R E

LANDED PROPERTIES Sandy Island, Sentosa Cove Designed by acclaimed Italian architect Claudio Silvestrin, this luxury waterfront property by YTL Land is located within the ultra-exclusive Sandy Island on Sentosa Cove. Two units (7,500 and 7,800 square feet) remain, both boasting four floors, a car lift to the two-car basement garage, five en-suite bedrooms, a gourmet, state-of-the-art kitchen, an infinity-edge pool, and a private berth for a 12-metre boat. Sandy Island won the Best Residential (Low-Rise) Property at the 2012 FIABCI – Singapore Property Awards, Best Architectural Design at the 2011 South-East Asia Property Awards, and Best Development (Singapore) at the 2009 CNBC Asia Pacific Residential Property Awards.

Price available upon request

PHOTOS BY ALBERT KS LIM

Just so you know… According to Singapore’s Urban Redevelopment Authority, the average price of landed properties on Sentosa Cove is S$2,216 per square foot (or about S$23,852 per square metre). In August 2012, a 7,307square-foot detached house in Sandy Island went for S$12.8 million (S$1,752 per square foot) and another, larger house (9,241 square feet) went in April 2012 for S$21.8 million (S$2,364 per square foot). (S$1 = US$0.80 as of March 2013)

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FEATURE A P R I L — MAY 2013

Thailand T hailand can be described as simultaneously captivating and exasperating. My friends who live there are as charmed as they are maddened living in a country they describe as both challenging and engaging. Pollution, the ever-present threat of coup d’état, protests involving red and yellow shirts (at least a few years ago), floods (again a few years ago) – yet they couldn’t resist its charming temples, gorgeous beaches, tranquil mountain retreats and sumptuous Thai food (and a bit of sinful fun thrown in for good measure). Perhaps it is this eclectic mix that makes Thailand an irresistible destination. After all, the country did welcome about 22.3 million international visitors in 2012, up almost 16% from a year earlier, making it the world’s 15th most visited, according to the UN World Tourism Organization. Thailand has successfully transformed itself from backpackers’ ghetto and a favourite hangout of American servicemen during the Vietnam War for a weekend R&R, into a top luxury and family destination. The result? A property market that has sprung up out of nowhere, with a range of houses, villas and apartments now captivating the attention of overseas buyers. Great food, all-year warm weather, and (still) affordable prices are Thailand’s

major draws, while healthy tourism inflow ensures promising rental incomes. Who, then, is not tempted to buy a property here? After several tumultuous years of political instability and the widespread flooding that inundated its central plains, Thailand seems to be gaining what it had lost, and more. Like I’ve said, its gorgeous beaches, mountain retreats and exciting cities are hard to resist – the properties being offered even more so. According to Knight Frank’s Wealth Report 2013, Thailand’s prime property market is one of the world’s best performers in 2012, with Bangkok delivering a growth of 9.4% and Phuket 4.7% (largely driven by low supply and rising investment interest for the latter). But how can a foreign national who is legally not allowed to own land anywhere in Thailand buy a landed a property in the country?

HOT AND NOW WHOLESOME Pattaya on Thailand’s Eastern Seaboard is fast becoming a hotbed for property investment.

The best way is to enter a long-term lease on the land, which is typically 30 years initially and an option either to purchase the land at an agreed figure (should foreign ownership becomes legal in the future) or to extend such lease for another 30 years. According to Harry Bonning, managing director of Ko Samui Properties, ‘the important point is that the option is purely contractual between the parties; hence, it is necessary that all parties are present when this is exercised. However, as it is difficult to predict who will be around in 30 years, the solution is to ensure that the Option agreement is binding on heirs and successors of both sides.’ There are also developers, according to Bonning, that offer 30+30+30 years option, which, strictly speaking, is not correct. However, they get around this by giving the buyer shares in the underlying land-owning company, which is the other party in the option agreement. Therefore, a lease from and arranged by a land-owning company of which the buyer is a shareholder is more secure than a lease from an individual. If a foreign buyer has secured a lease of a plot of land, he or she must also apply for a permit to build a house on it under his or her own name. This ensures that he or she owns the structure and has a long-term lease on the land on which it sits. As always, make sure to hire a reputable lawyer.

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PHOTO COURTESY OF TOURISM AUTHORITY OF THAILAND

South-East Asia s hotbed for lifestyle property purchases is back on its feet. How far would US$800,000 go here? By Rodel Ambas Jr.


FEATURE A P RIL — M AY 2013

Foreigners looking to get a piece of Thai property tend to choose either the bustling capital of Bangkok, the island-resorts in the south, the city of Pattaya along the Eastern Seaboard, or the idyllic Chiang Mai in the north. And from these places, we will begin our search.

TEMPLE RUN Bangkok leads Thailand’s prime property growth at 9.4% in 2012, according to Knight Frank. Chiang Mai (below) is fast becoming a sought-after destination. PHOTOS COURTESY OF TOURISM AUTHORITY OF THAILAND

BANGKOK They say that Bangkok is the most ‘primate’ city on earth, being at least 40 times larger than Thailand’s next largest city. The City of Angels, as it is also known, is home to over 8 million people within an area of 1,568.7 square kilometres, and a further 6 million people live in the areas that surround the city, which together make up the Bangkok Metropolitan Region. So imagine the atmosphere of this huge Asian city: clogged streets, pollution, glasswalled malls and office buildings, and a somewhat seedy reputation, sitting side by side with gold-covered pagodas and leaning Buddhas and you’ve got what could be the world’s most interesting city. Despite its chaotic ambiance, Bangkok is littered with quiet suburbs tucked away in one of its 50 districts. The districts of Bang Khen, Sai Mai, Khlong Sam Wa and Khan Na Yao are accessible to downtown Bangkok

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via the Don Mueang elevated tollway and the Bangkok Eastern Outer Ring. Another area popular among expats is Bang Na, located east of downtown Bangkok. This area offers plenty of Westernstyle housing estates to car-owning expats. It is accessible to central Bangkok via the Bang Na Expressway, to Samut Prakarn and the industrial areas east of the Eastern Seaboard towards Pattaya. There are also a number of good internationals schools.

CHIANG MAI Thailand’s premier city in the north is also the former capital of the ancient Kingdom of Lanna, which prospered from the 13th to the 18th centuries. Up to this day the city is littered with reminders of its former glory: some 30 temples within the city’s old walled section. Decades of development has expanded

the city into all directions, particularly to the east towards the Ping River (Mae Nam Ping) where Chang Klan Road, the famous night bazaar and the bulk of Chiang Mai’s hotels and guest houses are located. Now the city of Chiang Mai itself has a population of approximately 170,000 within a metro area of nearly a million people. Despite the surge of the city’s population, it has retained much of its old-world charm. Story has it that until the 1920s Chiang Mai could only be reached via a long river cruise from Bangkok or a tortuous elephant trek. This isolation helped the city keep its distinctive charm intact.

PATTAYA Long considered off-limits to families and ‘respectable’ tourism, Pattaya, in Thailand’s Eastern Seaboard, saw massive development over the last few years. In 2009 Central Festival Pattaya opened (the world’s largest beachfront shopping mall) and a Hilton hotel a year after. Hence, one can say that Pattaya is growing up. Pattaya is also conveniently located near Bangkok (approximately 120 kilometres) and the country’s largest airport, which makes it a popular weekend destination among those who live and work in the city. And unlike Thailand’s resort islands, such as Ko Samui, Phuket and Krabi, it has an area of extensive property development, including hotels, condominiums, and housing estates, which caused land prices to rise steadily, contributing to the growth in the town’s economy. As with any major purchase, there are several things that must be considered before deciding to buy a property in Thailand. Despite being a hotbed for foreign buyers, procuring a property in Thailand is an arduous process. Hence, seeking the assistance of reputable lawyers and estate agents is a must, not to mention those of trustworthy translators.


FEATURE A P R I L — MAY 2013

T H A I L A N D

LANDED HOUSES for under

US$650,000 (Prices based on March 2013 exchange rate)

Sanpathong, Chiang Mai

US$437,195 (THB13 million) This Thai-style country house located in Sanpathong, south-east of central Chiang Mai, has five bedrooms, four bathrooms, a large Westernstyle kitchen, and quaint teak flooring, sitting on a 8,000-square-metre land. For more information, visit www.century21lanna.com

Chiang Mai City

Hang Dong, Chiang Mai

US$521,271

US$538,086

(THB15.5 million)

(THB16 million)

This two-year-old house located in the heart of Chiang Mai City boasts an extensive garden, a 54-square-metre swimming pool with whirlpool bath, three bedrooms, three bathrooms, two living areas, and a Japanese-style room (which can also double as another bedroom). It also has a bar area, a large kitchen, a dining area, and a loft that can function as a home office. This property sits on a 1,192-square-metre land just half a kilometre from the old city’s moat.

This two-storey house in Hang Dong is mere 15 minutes from the Chiang Mai Airport. It has four bedrooms, three bathrooms, a home office, two living rooms, a Western-style kitchen, and a 72-squaremetre swimming pool.

For more information, visit www.century21lanna.com

Bang Na, Bangkok

US$638,977 (THB19 million) This two-storey detached house within a high-end estate with 24-hour security comes fully furnished, and boasts four bedrooms, four bathrooms, and a high-quality fully equipped kitchen. It also has access to the estate’s clubhouse and a communal swimming pool. For more information, visit search.knightfrank.com/thphv0130

For more information, visit www.century21lanna.com

Windmill Golf Club, Bang Na, Bangkok

US$638,977 (THB19 million) This contemporary villa is located within the Nick Faldodesigned Windmill Golf Club south-west of the capital’s CBD. It offers serene views of the surrounding greens and lake, and boasts four bedrooms with en-suite bathrooms, a highceilinged living room, a modern kitchen, a car port, a TV room, and an 11.5-metre infinity-edge swimming pool. For more information, visit search.knightfrank.com/thphv0137

p Azaya Villas, Mae Rim, Chiang Mai (THB23.46 million)

US$800,000

Nestled in the quaint Mae Rim area of Chiang Mai are these luxury villas for sale that offer excellent investment opportunities through rental income and capital appreciation over time. Merely 25 minutes from Chiang Mai’s airport, the resort is managed by Meridian Management, an expat-led Thai-registered company that employs a team of maintenance engineers and hospitality professionals. Twelve luxurious villas are on offer in this three-hectare estate (six have been sold as of press time), and each boasting two to five bedrooms, living spaces that range from 3,000 to 5,000 square feet, andx private swimming pools, all in an approximately 18,000 square feet of land. Additional amenities include a gym, dining options and spa services. For more information, visit visit azayavillas.com

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FEATURE A P RIL — M AY 2013

South East England

E PORT OF CALL Kent's Ramsgate Harbour and Marina, which, for many years, provided cross-channel ferries.

ngland’s South East region is one of the country’s most visited. It’s an economic powerhouse and an exciting destination for lifestyle property hunters. Its familiar idyllic landscape is dotted with some of the mostsought-after lifestyle properties in this part of Great Britain, from quaint Tudor houses in Kent, cottages in Hampshire, Victorian houses in Surrey, or, for the really well-heeled, huge estates in Berkshire and cliffside houses in Hastings. The region holds much interest, coupled with its proximity to London, to keep travellers (and property buyers) coming back for more. Owing to its proximity to the capital, South East England is a very prosperous region, with the second largest regional economy (after London). Its GDP in 2006 is valued at £177 billion (US$267 billion based on 2013 exchange rate). In the housing front, a Rightmove survey shows that the rental market in the region is ‘overheating’.

Data from the estate agent show that about 30% of tenants in the South East are spending more than 50% of their take-home pay on rent. In terms of capital appreciation, many of South East England’s towns are considered over-performers for the year 2012, according to Halifax. Data show that Basingstoke (Hampshire), Rochester (Kent), St Albans (Hertfordshire), and Dartford (Kent) registered the second, third, fourth and fifth highest house price increases in 2012 (14.7%, 13.3%, 13% and 13%, respectively). Average house prices in each of these towns in 2012 were as follows: Basingstoke, £220,320 (US$332,869); Rochester, £184,908 (US$279,380); St Albans, £371,131 (US$560,747); and Dartford, £209,557 (US$316,629). In the following sections, we explore in detail what makes the counties comprising this region such a magnet for travellers and lifestyle property buyers, starting with…

PHOTO BY VISIT BRITAIN / THANET DISTRICT COUNCIL

What will you get for US$13,000 per square metre in England’s idyllic South East – and where to find them? By Rodel Ambas Jr.


FEATURE A P R I L — MAY 2013

BERKSHIRE One of England’s oldest counties, Berkshire dates back to the 840s and has seen its fair share of great battles. Nowadays it is one of England’s most prosperous, home to many technology companies, especially the areas around Reading. Despite this the county has preserved its idyllic, English countryside feel. Its famous Berkshire Downs – ranges of chalk downland hills – are probably what comes to mind when one thinks of ‘the rolling hills of England’. But perhaps Berkshire is most famous for Windsor and its namesake, the Windsor Castle, one of the official residences of the British Royal Family. First built during the time of William the Conqueror, it is the longest-occupied palace in Europe and attracts almost a million visitors a year. Imagine living close to it.

BUCKINGHAMSHIRE North-east of London is Buckinghamshire, home to the renowned Pinewood Studios and the Dorney Lake, where the rowing events at the 2012 Summer Olympics were held. Its sections close to London are also declared part of the Metropolitan Green Belt, a statutory green belt around London, which aims to protect and preserve ‘green’ open parts around the capital. Also known as ‘Leafy Bucks’, this county sits close to Heathrow Airport, and boasts numerous tourist attractions and shopping opportunities. The county’s largest town is Milton Keynes. Often derided as a soulless, ‘new’ city, the British government designated Milton Keynes as a new town in 1967 to relieve housing congestion in London. Deliberately located equidistant from London, Birmingham, Leicester, Oxford and Cambridge, the government’s original intention was to make the town selfsustaining and eventually become a major regional centre in its own right.

IN A MANOR OF SPEAKING Claydon House in Aylesbury Vale, Buckinghamshire. A boat in the upper reach of the River Thames in Windsor, Berkshire. PHOTOS COURTESY OF VISIT BRITAIN

and family holidays, and boasts the most thriving bar, restaurant and café scenes anywhere outside London. Brighton is also the site of the Royal Pavilion, King George IV’s India-inspired palace, and arguably a masterpiece of over-the-top architecture and English quirkiness.

EAST SUSSEX

HAMPSHIRE

As part of the historic county of Sussex, it traces its roots to the ancient kingdom of the South Saxons, who established themselves in the area after the departure of the Romans. East Sussex is a varied county that’s a favourite weekend retreat of Londoners – or whenever the weather’s fine. Located just north of the English Channel, the county has some of the most spectacular seaside and cliffside towns in England, the most famous of which is Beachy Head, a chalk headland close to the town of Eastbourne and immediately east of the equally stunning Seven Sisters. But the county isn’t only about quiet, seaside hamlets. One of its towns, Brighton, is a vibrant nightlife destination, a long-time favourite for party weekends

Hampshire is the South East’s largest county, and perhaps best known for its maritime history, especially the towns of Portsmouth and Southampton. It is also famous for two of Britain’s most famous writers, Jane Austen and Charles Dickens. Further inland, two of Hampshire’s most important cities are Basingstoke and Winchester. The former is an important economic centre and is the location of the UK headquarters of many technology companies; the latter is a historic city boasting well-known landmarks such as the Winchester Cathedral. Winchester’s architectural and historic interest, and its fast links to other towns and cities, make it one of England’s most expensive and desirables areas.

CLIFFY WHITIES White-chalk cliffs of Beachy Head in East Sussex. PHOTO COURTESY OF VISIT BRITAIN

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FEATURE A P RIL — M AY 2013

ISLE OF WIGHT Perhaps another testament to English quirkiness, the Isle of Wight has the distinction as England’s smallest county – but for only half of the time. During high tide its area is slightly less than that of Rutland, but not during low tide. Regardless, the Isle of Wight is home to many resorts and is a favourite holiday destination since of the time of Queen Victoria. Despite lying a mere 15 miles across the sea from Southampton, Wight seems a world apart. Dubbed ‘England in Miniature’, its landscape offers an incredible diversity that changes dramatically in the space of a few miles. Nowadays, traditional, upmarket tourism gradually gives way to watersports and outdoor activities favoured by the younger lot.

KENT Often marketed as the ‘Garden of England’, Kent is the region’s easternmost corner and one of Britain’s warmest areas. The county has also provided inspiration for notable writers and artists, chief of whom are Geof-

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OLD AND NEW (Clockwise from above) The 170-metre Spinnaker Tower in Portsmouth, Hampshire; Ventnor seafront in the Isle of Wight; North Foreland Lighthouse in Kent; and Wakehurst Place’s gardens in West Sussex. PHOTOS COURTESY OF VISIT BRITAIN

frey Chaucer, Canterbury Tales, and artist J. M. W. Turner, famous for his seascapes. Canterbury is Kent’s major tourist centre, and parts of its ancient quarters are a designated UNESCO World Heritage Site. Though heavily bombed during the Blitz, it still contains many ancient structures, such as a city wall founded during the Roman times and rebuilt in the 14th century, plus the ruins of Saint Augustine’s Abbey, and The King’s School. Modern development within the town centre is also strictly regulated by the town’s officials.

OXFORDSHIRE Oxfordshire and its major city Oxford are perhaps Great Britain’s most famous college town. Straddling the upper reaches of the River Thames, the county has vast areas of archetypal English landscape. And as home to the University of Oxford, the county has a large concentration of local science- and technology-based companies, significantly contributing to its already booming economy, bolstered by the education and tourism industries. Indeed, the University of Oxford’s ‘dreaming spires’ are so iconic that they play a large part in making Oxford the sixth most visited city in the UK. While every corner of Oxford screams history, the city also has its fair share of modern attractions, such as a lively arts and entertainment scene, thanks to its predominantly young student population. There are plenty of cinemas, art cafés and live music venues to choose from – including the excellent Sheldonian Theatre.


FEATURE A P R I L — MAY 2013

SURREY

WEST SUSSEX

In J. K. Rowling’s Harry Potter series, Harry’s magic-hating relatives, the Dursleys, live in the fictional town of Little Whinging in Surrey, in a perfectly ordinary house along a perfectly ordinary street. However, in reality, Surrey is far from ordinary. It boasts many interesting attractions, such as Box Hill, the Devil’s Punch Bowl, Leith Hill, the well-manicured Claremont Landscape Garden, and the Surrey Hills, a designated area of outstanding natural beauty. Surrey is also one of England’s wealthiest counties, and many of its inhabitants are from affluent backgrounds.

S O U T H

E A S T

LONE ROWER A rower and waterside building of Henley-on-Thames, Oxfordshire (above left). Painshill Park in Cobham, Surrey. PHOTOS COURTESY OF VISIT BRITAIN

Guildford is Surrey’s largest town and has retained much of its historical charm. A short walk up its cobbled high streets shows old buildings, many of which are hundreds of years old.

Officially the sunniest county in the UK (an average of 1,902 hours per year, according to 29 years of Met Records), West Sussex offers a wide range of sights, from the rolling hills of Wealden to the chalk hills of the South Downs. The county is also home to an impressive array of stately homes, such as Goodwood, Petworth and Uppark. In addition, over half of the county is a designated protected area, making its outdoors a major selling point of West Sussex’s tourism scene. Its only city is Chichester, a cathedral city that has been continuously inhabited since the Roman times. The city is also home to some of Britain’s oldest churches.

E N G L A N D

LANDED PROPERTIES FOR UNDER US$13,000

PER SQUARE METRE

Boars Hill, Oxfordshire

US$9,956

PER SQUARE METRE

This new country house, built by Millgate, is just minutes from Oxford. Boasting over 906 square metres of accommodation, including an indoor pool complex and cottage, this property is set on a four-acre ground with a tennis court, pavilion and four-car garage. Boars Hill itself has retained much of rural feel, yet it is within 5 minutes from exciting Oxford. For more information, visit search.knightfrank.co.uk/oxf120014

Leys Road, Oxshott, Surrey

US$9,879

PER SQUARE METRE

This new home, built by Churchill Properties, is nestled in the quaint village of Oxshott in Surrey. The property is fitted with state-of-the-art systems, such as a bespoke kitchen/breakfast room fitted with topnotch appliances, including a wine fridge, coffee machine, double oven, and a large built-in TV. Centerpiece of the property’s grand reception hall is its spiral staircase that leads to both the lower ground and first floors. The estate’s leisure facilities include a large swimming pool complex with a whirlpool bath, sauna and changing area, a cinema and large gym area. For more information, visit earch.knightfrank.co.uk/cbm120115?curr=usd

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S O U T H

E A S T

E N G L A N D

LANDED PROPERTIES FOR UNDER US$13,000

PER SQUARE METRE

Buriton, Petersfield, Hampshire

US$9,751

PER SQUARE METRE

This elegant Grade II-listed Manor house dates from the 18th century, and is set on the eastern side of a neat-gravelled courtyard bordered by attractive cottages. The property has a reception hall that doubles as a sitting room or a drawing room and a spacious family kitchen with breakfast room. It has a master bedroom plus six bedroom suites. On the second floor is a library. Ancillary accommodation comprises five cottages and a holiday let cottage, set in a landscaped garden. For more information, visit search.knightfrank.co.uk/cho120341

Spicers Field, Oxshott, Surrey

US$10,072

PER SQUARE METRE

Also in Oxshott, Surrey, this newly built property boasts in excess of 1,000 square metres and features an indoor swimming pool and state-of-the-art leisure facilities. It has seven bedrooms, six bathrooms, secondary accommodation facilities, and a private parking sitting on a 0.57-acre freehold estate. For more information, visit search.knightfrank.co.uk/rvc070591?curr=usd

Fulmer Rise, Buckinghamshire

US$13,746

PER SQUARE METRE

This impressive Victorian country house is surrounded by mature wooded grounds, which lend this property fantastic views of the surrounding countryside. It dates back to mid-19th century and has recently been refurbished many modern facilities. It has eight bedrooms, six reception rooms, six bathrooms, a swimming pool, a tennis court, a formal garden and a parkland and woodland. Ancillary accommodation comprises two- and three-bedroom cottages. For more information, visit search.knightfrank.co.uk/cho120001

East Molesey, Surrey

US$12,669

PER SQUARE METRE

This detached Victorian villa boasts many of its original features, alongside newer facilities such as secondary accommodation, a garage, a swimming pool, and a tennis court. It also has direct access to the river. This waterside, period property has seven bedrooms, five reception rooms, and five bathrooms sitting on a 1-acre estate. For more information, visit search.knightfrank.co.uk/esh070035

Callow Hill, Virginia Water, Surrey

US$9,843

PER SQUARE METRE

Originally built 14 years ago by Berkeley Homes, this six-bedroom, six-bathroom property has recently been refurbished and is now well suited to family living and as a lifestyle property investment. Situated in Virginia Water, this property is close to the renowned Wentworth Estate with its three 18-hole championship golf courses, a 9-hole executive course and the Wentworth Club with swimming pool, restaurants, tennis courts and leisure club. For more information, visit search.knightfrank.co.uk/vir120140?curr=usd

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Arizona

America’s 48th state may have the best real estate. By Jennifer LS Harrison for the average American, living as most do in the middle of the country, to start to feel the heavy weight of the recession start to lift. As the first hit, middle America is rightly the first to recover. And this is what’s happening in many property markets across the central regions. While these places may not make it onto the radar of most foreign investors looking to buy into the brand name of American properties in the usual places, they nevertheless offer, at present, one of the best opportunities for sound investment with significant capital gains in the medium term. If capital gains don’t do it for you, there are other reasons for a foreigner to invest in this large country – two stand out above all the others: 1

It is perhaps the most transparent in the world, with a national database of literally all properties for sale and easy-to-compare market-value prices.

2

Still rebounding from the Great Recession, its markets are recovering but still below the precrisis premiums, making it a buyer’s market for capital gains as well as earning rental incomes.

TAKE, FOR EXAMPLE, ARIZONA You may know Arizona for its desert heat, people-sized cacti with a stick-em-up stance, and of course home of the Grand Canyon, one of the great wonders of the natural world. But lately, it’s making headlines for its surging property market. With a median home price of US$136,000, lovely weather, and local cultural and tourism attractions, it’s easy to see why. As one of the first states to feel the pulse of the economic recession, it was also one of the first to show signs of a recovery, and is largely considered to be rebounding better than most US states. Each quarter of 2012 saw the average price of property grow by leaps and bounds, in some places as much as 23%. And these days, sales are coming in like local agents haven’t seen in quite some time. Forbes notes that the state has the second best employment and economic outlook in America, behind North Dakota. Both of these factors will drive the property market. While it’s still a buyer’s market, as prices are still nowhere near pre-downturn premiums, there’s a very large inven-

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© SXC.HU / DYET

R

ecovering rather nicely from the global recession, the US property market is on the up, and its economic growth and jobs market along with it. And I’m not just talking about the hotspots either, such as Florida, California and New York. Less notable markets in places like North Dakota, Minnesota and Arizona have been making the news lately for rapid recession-recovery rates, as well as property prices that are still affordable. This is good news for American homeowners, naturally, many of whom have clung to their properties and mortgage repayments by the very skin of their chinychin-chin. As is typical with most recessions, it’s the lower to middle classes who are hardest hit; this recent, so-called Great Recession is no exception. Wealth in America is primarily kept to the western and eastern shores of the nation, held within the relatively ‘new money’ spots in northern California as opposed to the ‘old money’ pockets on America’s East Coast, especially New York, Connecticut, New Jersey, Massachusetts and the Washington DC area. So it’s a bit of a reprieve


FEATURE A P RIL — M AY 2013

tory shortage and developers are flocking in, all of which means that prices will continue on their upward trend and bidding wars are possible in the near future as the existing stock dries up.

THE STATE OF ARIZONA Sitting in the American south-west with borders touching both Mexico and the US states of New Mexico, Utah, Nevada and California, Arizona is one of the most populous states in the country, with a high native-American settlement. It’s also considered by many to be one of the most beautiful, with vibrant desert sunsets, the World Heritage-Listed Grand Canyon, and a number of national parks and forests. The two major cities are Phoenix and Tucson. Phoenix is the capital city and ranks as the sixth most populated in America (about 1.5 million within the city itself and 4.5 million within its metro area). Known as the Valley of the Sun, and with good reason – it’s located in the Sonoran Desert and is known for its subtropical desert climate. Climate and massive population growth

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are two of the main reasons why Phoenix is at the forefront of property investment opportunities. It’s also home to the very large Arizona State University, which means an unending supply of tenants for rental accommodation, especial student housing. With a number of museums, fine art galleries, art schools and a budding-tostrong artist community, art in Arizona is a preeminent affair; perhaps, however, especially in Phoenix, and again, especially in the coveted Scottsdale region. Tucson, however, may just edge out the competition from its sister city of Phoenix, at least for the considerations of a foreign investor.

TUCSON Sitting closer to the US–Mexico border and home to the University of Arizona, Tucson has a population significantly lower than Phoenix but perhaps more specialised for creating a lucrative tenant pool, from students and retirees to US migration employees to tourists. With a direct route to reach San Diego or New Mexico, or a straight line to Mexico, its highly convenient location puts in as an anchor of the Sun Corridor. It’s also known as Optic Valley (Arizona’s answer to Silicon Valley, owing to its high production of optics and optoelectrics). Simultaneously placed within a desert and amid five low-lying mountain ranges, the unique geography has a distinct draw on tourism, artists, scientists and nature enthusiasts.

TUCSON’S PROPERTY MARKET DESERT LIGHTS Sitting on the north-eastern reaches of the Sonoran Desert, Phoenix is one of the country’s largest cities by land area. The University of Arizona in Tucson (far right).

America’s Housing and Urban Development (HUD) authority considers the property market in Arizona to be ‘soft’ with a relatively low vacancy rate. The median house price dropped in Tucson last year by 11% (to US$167,700). That’s quite a drop


FEATURE A P R I L — MAY 2013

from its pre-recession glory. Between the years 2006 and 2009, the average home price in Tucson was US$230,250! This may seem discouraging, but consider that the lowered price point of 11% from the previous year is still a fair bit higher than the price of a home Phoenix and the state of Arizona as a whole (US$136,000). A lower sale price coupled with a positive outlook, growing economy, and increasing job market can only mean good things for an investor. Data from the Tucson Association of REALTORS show that during late 2011 and early 2012, more homes were sold in Tucson than in the previous 12-month time frame – the market was up by 16% (or an additional 1,785 homes). This is despite a decline in the overall number of listings on the MLS database by 6%. It’s also worth noting that, according to Hanley Wood, LLC, approximately 55% of the total sales in Tucson were for distressed properties or those under foreclosure from the bank. This seems to be a trend in America – to seek out those properties being returned to the bank with the owners at a critical level of financial urgency to sell – and Arizona is no exception.

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FEATURE A P RIL — M AY 2013

For a house to go into foreclosure, the owner must be behind on their mortgage by 90 days or more, and a house in ‘distress’ sells on average for US$50,000 less than its fair market value. Pre-recession, there were just over 1,000 foreclosures in Tucson; following into as well as out of the recession, however, these numbers doubled, then tripled, then quadrupled… or more. And in 2011, there were 7,000 foreclosures. Further still, new-build construction in Tucson also declined last year by 7%. On the whole, construction rates have declined in Tucson each year since 2005 after a peak in construction in 2004.

SOME GOOD NEWS HUD points out that over 1,000 jobs were added into Tucson’s job market last year, which is a great part of why the economy is growing and unemployment rate is dropping. As general economic indicators, these two elements combine to paint a rosy outlook for the local economy, but especially the property market. For the homeowners and job seekers of Tucson, the recession has been particularly rough. And even with a bit of good news in the jobs market and the economy as a whole, they’re not entirely out of the danger zone just yet. However, for an astute investor, the present situation in Tucson is well worth a look: low prices, basement-bargain foreclosure opportunities, a strong draw on tourism, exceptional year-round weather, and, as you’re about to read, a unique and potentially lucrative rental market.

RENTAL MARKET Sixty-three per cent of homes in Tucson are owned by the occupier, leaving the remaining 37% to the rental market. This, according to HUD, is thanks to the recession. Locals are currently more cautious of buying into property, feeling more secure to rent instead and not tied down by a mortgage.

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'HOT' SPOT Arizona’s second largest city, Tucson (above), and Phoenix with the famous Camelback Mountain in the background.

While the average rent increased in Tucson in 2012 by 2% to US$655 per month, there are only 580 units expected to be completed and enter the marketplace this year. Additionally, as one of the most popular retirement destinations in America, perhaps second only to Florida, the average age of the population is higher. Once over the age of 55, it’s also harder to qualify for a mortgage. For those retirees who don’t have enough money to buy a property outright, renting is the only alternative.

A tenant pool full of retirees is a potentially excellent option for earning a rental income from an investment property. While there are many on a fixed income and, hence, who cannot afford the higher rental prices that you’ll naturally want to obtain, it is typically the wealthier, more active retiree who moves into Arizona for their retirement years. They are quiet, tend to be un-demanding, and cause little or no damage or even wear and tear to the property. If you find the ones who are either skittish of the market, do not have quite enough money to buy a property outright, or are too old to obtain a mortgage, you have found just about the best-case scenario for a tenant. On the flip side of this coin, however, are the students. The University of Arizona, with a student population of over 40,000 – most of whom need a place to live – provides a virtually never-ending supply of tenants, especially for apartments or houses close to campus.


FEATURE A P R I L — MAY 2013

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LANDED PROPERTIES (for way less than Tokyo’s US$15,122 per square metre) Photos courtesy of Sue Brooks Real Estate www.suebrooksrealestate.com

Santa Elena Drive, Tucson

US$594.45 per square foot

Sunterra Court, Tucson

Painted Quail Drive, Tucson

US$180.71

US$243.56

US$1,945 per square metre Listing price: US$274,500

US$2,621 per square metre Listing price: US$864,900

For the same price per square metre as a small apartment in Tokyo, you could buy eight properties in Arizona just like this little gem. Nestled within a gated enclave in a prime central location and set upon a beautiful mountainous backdrop, this well-priced three-bedroom property is also conveniently located near the local facilities of the University of Arizona and University Medical Center. It boasts a living space of 1,519 square feet.

Or how about buying six properties like this one along Painted Quail Drive in the heart of the Catalina Mountains with panoramic views of Tucson’s four other mountain ranges? It has four bedrooms, a living space measuring 3,551 square feet, and fireplace in the master suite, wrap-around patios and a pool/spa, plus a three-car garage. With the money leftover, you could even afford to hire an interior designer to decorate each one.

per square foot

For more information, visit www.suebrooksrealestate.com/homes-forsale/AZ/Tucson/85719/3649-N-SunterraCourt-85066785

per square foot

For more information, visit www.suebrooksrealestate.com/homes-for-sale/ AZ/Tucson/85750/4361-N-Painted-QuailDrive-84465986

US$6,398 per square metre Listing price: US$2.7 million Instead of a condo in Tokyo, you could buy this property twice with cash leftover. This four-bedroom contemporary house has an extensive, professionally landscaped outdoor living area and a living space measuring 4,542 square feet on a 0.8acre lot. Built in 2008, it also comes with its own guesthouse, a chef’s kitchen and a four-car garage. For more information, visit www.suebrooksrealestate.com/homes-for-sale/AZ/ Tucson/85715/6524-E-Santa-Elena-Drive-85575046

Calle Brillante, Tucson

Hacienda del Sol Road, Tucson

per square foot

per square foot

US$289.32

US$288.80

US$3,114 per square metre Listing price: US$699,000

US$3,108 per square metre Listing price: US$1.349 million

Or how about buying five properties like this? A recently remodelled 2,416-squarefoot, two-storey house sitting on a 688-square-metre lot with stunning views of the mountains, nearby golf course and the city lights. This property is considered a valuable home for holidays or owner occupation. Features include three bedrooms, gourmet kitchen, spa-like bathrooms and a two-car garage.

You could buy five homes like this in Arizona for the same price as a small apartment in Tokyo. This California Ranch house-style property has been impeccably remodelled with state-of-the-art features and energy efficiency. It has five bedrooms and measures approximately 4,671 square feet. It also includes a gated entry, a guesthouse and a two-car garage.

For more information, visit www.suebrooksrealestate.com/homes-for-sale/ AZ/Tucson/85718/4975-E-Calle-Brillante-85819356

For more information, visit www.suebrooksrealestate.com/homes-for-sale/ AZ/Tucson/85718/4425-N-Hacienda-Del-SolRoad-85506743

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CONVERSATION A P RIL — M AY 2013

Why Arizona?

Property Life spoke with Arizona real-estate agent, Sue Books, and asked her the question, ‘Why Arizona?’ Why is the real estate market in Arizona rebounding faster than most other cities in the USA? There are many reasons, but these are some that make the top of the list: Arizona dove into the downward spiral of the housing market in the early part of 2006, about 18 months to two years before some of the other states. In a first-in-first-out scenario, it makes sense that Arizona is leading the way in America’s economic recovery. Additionally, Arizona has a defined process within the state laws as to how foreclosed properties will be handled in their disposition. This process is efficient and fair to all parties (the bank and the homeowner). This non-judicial process has allowed the real-estate community to bring these foreclosed homes to the marketplace, creating buying opportunities and helping to get through this distressed market even faster. This efficiency will now benefit the general homeowner as prices of homes start to appreciate back to normal levels. Where in Arizona is the best place for foreign investment? All of Arizona is a wonderful place for an investment at this time. What the foreign investor needs to discern is the What, Where and Why for their investment. Arizona is a beautiful and environmentally diverse state. We have the spectacular Sonoran Desert, the wonderful Pine Forest, raging rivers, the red Rocks of Sedona and even the beautiful wonder of the Grand Canyon. The metropolitan areas of Phoenix and Tucson are also very different from each other and the residents of each community are loyal to their hometown. The outlying areas and rural communities provide great

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support to the metropolitan cities as well as to the rest of the state. Tucson in particular is a solid investment due to its proximity to the border (for Border Patrol and Customs agents), two military bases (who tend to transfer our military every three to four years), and major employers. In addition, the University of Arizona has resulted in a sizeable increase in student housing off campus. Our winter migration of ‘snow birds’ increases the population annually and provides a vibrant rental and second-home market. There are investment opportunities throughout the state and the current status of both the residential and commercial real-estate markets are filled with opportunities. The question is: What do you want and what is the type of environment you would like to live and work within?

How is the rental market in Tucson compared to Phoenix? There are many opportunities in either market and purchasing rental properties in either community can be a very lucrative investment. If purchased properly, based on location, condition and price, it is very common for a rental property to deliver a positive cash flow to the owner. Again, what is important is the long-term goal of the investor. That should always be the first consideration.

Sue’s words of wisdom ‘Work with a real estate professional.’ ‘Have fun doing some ‘shopping’ on line first.’ ‘Be clear about your wants, needs and your ‘why’ of investing in real estate.’ You can find listings for the entire state of Arizona at Sue’s Web site www.suebrooksrealestate.com.

Tucson is a smaller market, but the Phoenix market has seen significant price increases in the past year. Tucson still has very affordable properties for a purchase to reach the markets noted.

Why Arizona versus other states? The advantage of Arizona to an investor is more about what we don’t have than what we do have. We don’t have extreme weather conditions of the hurricane, blizzard, tornado, and flood variety as many ‘hotspots’ do. In general, our advantage is the broad base of opportunity – from college students to military, growing families and the senior market. Arizona has it all. Arizona also has a strong business sector of innovative industries from Raytheon to the biomedical field to the solar industry to the medical world.

Sue Brooks is a realtor for Long Realty. About Long Companies: Long Companies is comprised of Long Realty Company, Long Mortgage Company, Long Title Agency and Long Insurance Group -- all working together to create a full range of real estate services and products. Based in Tucson, Long Realty Company, a Berkshire Hathaway affiliate, is the leading real estate brokerage company operating in southern Arizona. If offers an unparalleled level of award winning residential and commercial real estate services through a network of more than 1,300 licensed real estate associates in more than 41 offices, including 26 affiliate realty and property management companies that are independently owned and operated throughout Arizona and into Mexico. Long Realty Company, a part of HomeServices of America, a Berkshire Hathaway affiliate, has been helping generations of Arizonans achieve their dreams of home ownership since 1926.


FEATURE A P R I L — MAY 2013

Suburban Australia

You need to shell out approximately US$1.9 million for a modest 120-square-metre apartment in Tokyo. What will you get for this same amount in Australia s suburbs? By Rodel Ambas Jr.

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lthough many in Britain and America would be too proud to admit, Australia is among the world’s favourite countries to settle in. It has a high quality of living, strong economy, impeccable social services, great universities, plenty of food, and lots and lots of space – about 7.68 million square kilometres. Australia therefore is very popular among foreign property buyers, especially its capital cities, where real estate consistently commands high prices. Add to this the constant lack of supply and investors are eager to cash in on the country’s healthy capital growth. And the country has statistics to back this up. According to WBP Property Group CEO Greville Pabst, Australia’s capital cities are touted to register capital growth in 2013, especially Melbourne, Perth and Sydney. Perth properties are expected to gener-

ate capital growth of between 5% and 10% in 2013, especially those priced under A$500,000. In particular, houses within 20 kilometres of the city are expected for capital growth of around 7%. The outlook in Sydney, meanwhile, is strongest (approximately 5%) for established housing within 10 kilometres of the CBD. Brisbane is expected to perform fairly consistent, with modest growth tipped across houses, apartments, and the holiday market. House prices within 20 kilometres of the Brisbane CBD are forecast to grow by 5% or more. The prospects for Melbourne, in contrast, are strongest for established houses and units. But what do these statistics share in common? Unlike in smaller countries or territories where land is scarce, houses in Australia, those suburban landed dwellings sitting along tree-lined streets kilometres outside its cities’ CBDs, are more in demand and offer more attractive returns.

SUN, SURF AND HOUSES Although it does not have a central business district, Queensland’s Sunshine Coast is Australia’s 10th largest metropolis. PHOTO COURTESY OF TOURISM QUEENSLAND

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FEATURE A P RIL — M AY 2013

According to Rodney Prestia, a Kuala Lumpur-based expert on Australian property market, an investor need not be in the CBD to make money, as some of the best investments lie in house-and-land packages in outlying regional areas, where there is a shortage of rental properties. Being a huge country, Australia can afford to extend its cities to outlying areas where people can live. These suburbs are especially created to serve as residential areas, and there are now over 1,000 of them. It is said that from the time of Governor Arthur Philip’s arrival in Sydney Cove in 1788 with a ship full of convicts, official thinking in Australia has been orientated towards developing suburbs. Residential areas with ample space between houses, giving workers semi-rural retreat from the cares of the city, would avoid the problems associated with high-density urban living, which, after all, necessitated the transportation of people to Australia in the first place. Hence, it is safe to say that suburbanisation was deeply rooted in Australia’s colonial experience. In fact, according to historian Graeme Davison, ‘it was consciously promoted by the country’s founders who anticipated sprawl of homes and gardens rather than a clumping of terraces and alleys.’

According to journalist and essayist Donald Horne in his 1964 book The Lucky Country, Australia is perhaps the first suburban nation, and many of the trends towards suburbanisation that have been occurring  in countries  such as  the USA, Canada and Great Britain were prefigured in Australian cities. So forget about getting a pricey highrise apartment in the centre of Sydney or Melbourne. Australia is so huge it’s teeming with suburbs that are just as liveable, and offer healthy investment returns. Let’s start with…

most border of the Ku-ring-gai council area. This affluent area is known for its leafy streets, stately homes and high property prices. Lower North Shore encompasses all of the area north of the Sydney Harbour stretching from the Lane Cove River in the west to the Middle Head (Mosman) in the east and includes the suburbs of Mosman, Kirribilli and Longueville. North Shore is highly accessible. It can be reached through the Military Road, the Pacific Highway, and the Warringah Expressway, and also through the North Shore Line and the Northern Line, which provide access to the Sydney CBD over the Harbour Bridge. Many bus routes also serve the area, and ferries connect many of the harbourside suburbs with Circular Quay in the CBD. Containing some of the oldest residential areas of Sydney, the North Shore is also known for its extensive gardens and mature European trees, making it one of Sydney’s most attractive areas. This is particularly true in November, when the blossoming of the Jacaranda trees provides streetscapes of bright purple flowers. The area is also home to hundreds of parks and reserves, including Sydney Harbour National Park and the Lane Cove National Park.

NEW SOUTH WALES The North Shore area is primarily a residential, upper-middle-class area north of the Sydney central business district. Although its boundaries are not clearly defined, the area usually includes the north shore of Sydney Harbour between the Middle Harbour and the Lane Cove River, up to the northern border of the Ku-ring-gai. And despite its name, most of its suburbs are located well inland from the ocean. The area is generally divided into the Upper North Shore and Lower North Shore. The former usually refers to the suburbs north of Chatswood, east of the Lane Cove River, and south of the upper-

VICTORIA

PHOTO COURTESY OF TOURISM AUSTRALIA

BACK ON ITS FEET Despite suffering from damage caused by the January 2011 flooding, Brisbane and its suburbs are back to business.

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Although only an hour’s drive from the Melbourne CBD, Mornington Peninsula seems a world apart. In fact, everything here screams Mediterranean, from rocky seaside cliffs to vineyards, olive groves and historic country retreats. Why, it’s also boot-shaped like Italy! Although much of the peninsula has been cleared for agriculture and settlements, small areas of the native ecology remain in the peninsula’s south and west, some of which are protected by the Mornington Peninsula National Park. Around 135,000 people live here, most in small towns on its western shorelines, which are considered outlying suburbs of the Greater Melbourne Area. However, during the summer months (December– February), the population can swell to around 250,000 people. Its main towns include Mornington, Dromana, Sorrento and Portsea along coast, and Red Hills further inland, which


FEATURE A P R I L — MAY 2013

WHY LIVE IN THE CITY (Clockwise from above) Wine and cheese served at Sunshine Coast's Hinterland; old-school pubs at Fremantle, Western Australia; and the main beach at Noosa, Sunshine Coast. PHOTOS COURTESY OF TOURISM AUSTRALIA AND VISIT SUNSHINE COAST (WWW.VISITSUNSHINECOAST.COM)

is home to the area’s rolling hills and wineries. Speaking of wines, the area is also well known for its topnotch Pinot Noir and Chardonnay. And whenever there’s wine, there’s also good food. Mild maritime climate means fresh produce abounds. Mornington Peninsula can be reached via the regular suburban trains that leave from Melbourne and terminate at Frankston. The trip takes approximately an hour. There is also a passenger ferry that crosses Western Port Bay to Stony Point from French Island and Phillip Island.

QUEENSLAND We often associate Queensland with Brisbane, the Great Barrier Reef, or the Gold Coast. But as a state roughly the size of Libya, it offers a whole lot more. One example is the state’s Sunshine Coast, part of the Brisbane metro area, which is renowned for its relaxed approach to Queensland life and boasts a collection of beachside areas and hinterland towns quite unique in Australia. Home to more than 250,000 people, this area located 100 kilometres north of Brisbane is considered an emerging entrepreneurial and business hotspot, especially in the IT and creative industry sectors, generated by the University of the Sunshine Coast’s Innovation Centre in Sippy Downs. In fact, CNBC Business cited Sippy Downs as an Innovation Hotspot in

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FEATURE A P RIL — M AY 2013

2010, with the potential to be ‘Australia’s no-worries answer to Silicon Valley’. However, as with many Queensland metro areas, Sunshine Coast’s economy is dominated by tourism. Its beaches, especially those on Noosa, Coolum, Mooloolaba and Kawana Waters, are favourite hotspots, and the area is also home to notable theme parks such as Steve Irwin’s Australia Zoo and UnderWater World Marine Park. Further inland is the Glass House Mountains National Park, which is accessible from the quaint mountain towns of Maleny and Montville. Sunshine Coast is conveniently connected with Brisbane City via the Bruce

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Highway. Major arterial roads include Nicklin Way and Sunshine Motorway, which pass through most major areas of Sunshine Coast. In addition, located 10 kilometres north of Maroochydore is Sunshine Coast Airport, which has regular flights to Sydney and Melbourne with JetStar and Virgin Australia, and seasonal ones to Auckland with Air New Zealand. For those who want to be closer to the Brisbane CBD, then the state capital’s inner northern suburbs are the places to be (and buy). Its most notable suburbs include Ascot, Bracken Ridge, Brighton, Chermside, Everton Park, Gaythorne, Grange, Hamilton, Keperra, McDowall,

Mitchelton, Wilston and Windsor, among others. These suburbs are predominantly affluent residential suburbs that boast leafy streets, ‘Queenslander’ architecture and proximity to exciting Brisbane. Ascot, for example, is mere 7 kilometres from Brisbane and is well catered for in terms of public transport. It is also home to the Eagle Farm and Doomben racecourses, which are best known for racing carnivals. Then there’s the suburb of Chermside, 10 kilometres north of Brisbane City, which, along with neighbouring Indooroopilly, Carindale and Mount Gravatt, is described as a mini-CBD.

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LANDED PROPERTIES FOR UNDER US$1.9 MILLION (Prices based on march 2013 exchange rate)

Killara, New South Wales

US$1.89 million

Sitting on a 1,905-square-metre land is this fine family home. Its multiple living spaces include a formal dining room, a family living room, and a separate formal lounge with wood fireplace. It has four bedrooms, and a separate self-contained apartment with its own bedroom, bathroom, living room and kitchenette. For more details, visit www. belleproperty.com and www.realestate.com.au/property-house-nsw-killara-112882191 PHOTO COURTESY OF BELLE PROPERTY

Cremorne, Mosman, New South Wales

US$1.69 million

This elegant, north-facing Federation-style family home has tasteful interiors, period details and lush garden retreat. Its elevated position gives it pleasant district views. It has four bedrooms with built-in wardrobes, two bathrooms, and well-lit kitchen equipped with highend appliances, and it is very close to Balmoral Beach. For more information, visit www.mcgrath.com.au and www.realestate.com.au/property-house-nsw-cremorne-113186791 PHOTO COURTESY OF CLAUDIA PORTALE (MCGRATH ESTATE AGENTS)

Buderim, Queensland

US$1.84 million

Superbly situated on the eastern slopes of Buderim with filtered ocean outlook, 19 Hardwood Court is the complete family resort. This architect-designed 850-square-metre home is Polynesian-themed, which gives it an immediate sense to unwind. It has a 17-metre heated in-ground swimming pool, a 12-person sauna, and 6,454 square metres of tropical gardens. Fabulous work-at-home opportunities exist with a B&B licence and garden villas to use as office space or retreat. For more information, visit www.kenguybuderim.com.au PHOTO COURTESY OF KEN GUY BUDERIM

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FEATURE A P R I L — MAY 2013

SOUTH AUSTRALIA One of Adelaide’s photogenic suburbs, Burnside has an estimated population of 45,000 and is primarily a residential, upper-middle class area. Approximately 10% of 27.53-square-kilometre area is dedicated to parks and reserves, which makes it one of South Australia’s capital’s greenest areas. Its notable feature is the Adelaide Hills, which are part of the Mount Lofty Ranges and boasts an abundance of noted wineries. Also on the foothills of the Mount Lofty Ranges is the area of Mitcham, where Flinders University is located. Within this area is the suburb of Springfield, 8 kilo-

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metres east of Adelaide’s city centre and one of South Australia’s most affluent, containing some of the city’s most expensive real estate. Many homes here were of the California bungalow style built in the 1920s.

WESTERN AUSTRALIA The City of Swan, the political centre of the renowned Swan Valley area, is located approximately 20 kilometres north-east of the Perth CBD. With a population of approximately 105,000, it is noted for its fertile soil uncommon in the Perth region and is famous for its 40 or so wineries, such as the huge complex in Houghtons

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(Western Australia’s largest producer), Sandalfords and many small familyowned ones. Also, a property hotspot in Western Australia is Fremantle, the state’s major port and located 19 kilometres south-west of Perth at the mouth of the Swan River. First settled in 1829, Fremantle contains some of the best-preserved heritage buildings in Australia, including convict-built colonial-era buildings, an old jetty and port, and prisons. Along with the inner suburbs of Northbridge and Leederville, it is one of Perth’s major nightlife and dining hubs. The city also has a thriving arts scene.

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Windsor, Queensland

US$1.79 million

Sitting on an elevated 809-square-metre lot is a modern take on the Queenslander style. This property has two expansive levels, a variety of living and entertaining areas, six bedrooms, three bathrooms, and a modern kitchen fitted with topnotch appliances. It has an inground pool with granite boulder wall and water feature. For more information, visit www.churchillrealestate.com.au and www.realestate.com.au/property-house-qld-windsor-106634709 PHOTO COURTESY OF DAMON CHURCHILL/CHURCHILL REAL ESTATE

Springfield, South Australia

US$1.93 million

This family residence is set on an enclave of quality homes. Its superb flooplan includes four large bedrooms, a casual living area, a stylish kitchen with granite countertops, and an al-fresco entertaining area overlooking a well-manicured garden. The master bedroom has an en-suite bathroom and a walk-in wardrobe, and is connected to a private courtyard. For more information, visit www.boothrealestate.com.au and www.realestate.com.au/property-house-sa-springfield-112277643 PHOTO BY JONATHAN KISSOCK/COURTESY OF BERNARD BOOTH REAL ESTATE

Upper Swan, Western Australia

US$1.83 million

Right in Western Australia’s famous Swan Valley Area, this four-bedroom property fuses contemporary architecture within a semi-rural setting. Close to the Walyunga National Park, this striking home is nestled amidst the undulating hills of Western Australia’s wine country. For more information, visit www.eldersbullsbrook.com.au and www.realestate.com.au/property-house-wa-upper+swan-112708127 PHOTO COURTESY OF ELDERS REAL ESTATE

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FEATURE A P RIL — M AY 2013

PHOTO BY CHRISTIAN KNEPPER/COURTESY OF VISIT BRASIL/EMBRATUR

TALL AND TAN AND YOUNG AND LOVELY Rio de Janeiro’s most famous stretch of sand, Ipanema, and the city’s picturesque peaks (below).

Brazil PHOTO COURTESY OF VISIT BRASIL/EMBRATUR

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The world’s largest Portuguesespeaking country is currently hot. But how far does US$800,000 go here in terms of landed properties? By Rodel Ambas Jr.


FEATURE A P R I L — MAY 2013

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istory has it that Brazil got its name from and became famous for its largest export during its early colonial years: the brazilwood (Caesalpinia echinata), whose trunk contains a red dye so prized by fabric manufacturers in Europe that overexploitation almost wiped out the species. But these days Brazil is also known for many other things. It is a member of an elite club of large, up-and-coming economies (the ‘B’ in BRIC). Its GDP is huge – US$2.289 trillion, according to the World Bank – and it surpassed the UK (or will anytime soon) as the world’s 7th largest economy. It will also host two global parties over the next few years: the FIFA World Cup in 2014 and the Summer Olympics in Rio de Janeiro in 2016. Its exports are staggering, too. And I’m not only talking about those impossibly attractive Brazilian supermodels. It is the world’s largest exporter of sugarcane, coffee, soybeans, beef, ethanol and who knows what else. According to data from the country’s Ministry of Agriculture, Livestock and Supply, Brazil is responsible for 80% of the world’s supply of orange juice. Brazil’s economic leap, not unlike those observed in China and India, is a result of decades of market reforms. During Luiz Inácio Lula da Silva's term as president, for instance, the government had taken the tasks of reducing poverty and improving economic growth with broad social reforms. Standard of living improved (although there still remains high level of income inequality in the social distribution of wealth). According to Forbes, the country has 46 billionaires in 2013, the most in Latin America and even ahead of Japan. It’s thus fitting to say that this decade is Brazil’s to own. Its property market is as vibrant as its economy, with buyers from the USA and Western Europe and even as far away as China and Russia taking long-haul flights to Porto Alegre, São Paulo or Rio de Janeiro to buy lifestyle houses.

Brazil’s housing market is extraordinarily robust. He cites restrictive lending policies that helped buoy the market from the effects of the financial crisis. The country is also an attractive buyers’ market, says Rio de Janeiro-based lawyer Alessandro Jacob. However, he added that the best time to buy was about three years ago, as prices now are 30% higher. However, Dr. Hahn stresses that it is still an excellent time to buy, as prices will only continue to rise in anticipation with the next year’s FIFA World Cup, the Rio Games in 2016, not to mention the growing tourism and petroleum industries. In addition, infrastructure across the country is being improved and crime-fighting measures, especially in the big cities, enhanced. Although the two upcoming major sporting events are helping arouse foreign interest in Brazil (and it is expected that the country’s housing boom will last until 2017), this is not to say that the boom will come to a complete halt when the World Cup and the Olympics are over. Recent

SWEET PEAK Sugarloaf Mountain as seen from Botafago Bay.

discoveries of oil reserves off the coast of Rio also make Brazil very attractive to foreign nationals, says Marcus Vinicus de Oliveira, executive director of São Paulobased Consul Patrimonial. The country will still have its oil discoveries in 2017 and foreign investment is expected to pour in. According to Knight Frank’s Global House Price Index in late 2012, Brazil recorded the strongest growth of all markets surveyed. Although the growth achieved is well short of the 30% recorded in September 2011 (indicating that the market has somewhat cooled), it is still considered healthy given the global economic climate.

RISE OF THE MIDDLE CLASS Brazil’s impressive rise is credited to Lula da Silva’s development programmes, which are now being further pushed by his successor Dilma Rousseff. The country successfully reduced the incidence of poverty, which led to a 9% increase in real average incomes from 2002 to 2012, according to the Instituto Brasileiro de Geografia e Estatistica. Similar to other large emerging economies, the rise of the Brazilian middle class – up 34% from 2004 to 103 million – concomitantly affected the country’s real estate market, as more Brazilians now are aspiring to become homeowners. Indeed,

MARKET OVERVIEW Although not spared from the effects of the global downturn, Brazil’s property market performed remarkably well since 2009. According to Dr. Andreas Hahn, owner of real estate company Hahn Imoveis Brasil,

PHOTO BY CHRISTIAN KNEPPER/COURTESY OF VISIT BRASIL/EMBRATUR

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FEATURE A P RIL — M AY 2013

they are making their presence felt in an industry once dominated by foreign players. Developers like Cyrela are now shifting from luxury projects to more middleend ones to cater to this potentially formidable socioeconomic segment.

SÃO PAULO With a population of 11.2 million, Brazil’s largest metropolis is also the largest in the Southern Hemisphere and the second largest in the Americas. São Paulo is also the capital of its namesake, the state of São Paulo, and exerts strong regional influence in country’s commerce, finance, arts and entertainment scene. The city also has the

largest economy among Latin American and Brazilian cities, and its per capita GDP is Brazil’s second highest behind Brasília. Although it lacks the natural beauty that made rival Rio de Janeiro famous (not to mention unreliable weather), São Paulo boasts interesting cultural and architectural attractions. It has many significant

monuments, parks and museums, such as the Latin American Memorial, the Museum of the Portuguese Language, São Paulo Museum of Art, Museum of Ipiranga and the Ibirapuera Park. The city, after all, is Brazil’s culture capital, and paulistanos (the city’s inhabitants) are firm believers of the ‘working hard, playing harder’ rule. According to FIPE ZAP Index of Dwelling Price Offers, house prices in São Paulo rose 18.8% (12.9% adjusted for inflation) during the year to July 2012. Furthermore, average house process in the city rose by 144.1% (91.7% in real terms) from July 2008 to July 2012.

OLD AND NEW São Paulo’s Luz Station, which now houses the Museum of the Portuguese Language, and the numerous skyscrapers that made the city famous (bottom).

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PHOTO COURTESY OF VISIT BRASIL/EMBRATUR

PHOTO BY JEFFERSON PANCIERI/COURTESY OF VISIT BRASIL/EMBRATUR

RIO DE JANEIRO Simultaneously a city that boasts picturesque landscapes worthy of an art-house film and a gritty urban area mired by gang violence, poverty and pollution, Rio de Janeiro is definitely one of the world’s most interesting (and irresistible). Perhaps it’s the city’s inherent samba beat that keeps visitors coming for more. Straddling between gorgeous mountains, white-sand beaches and lush rainforests, cidade maravilhosa (marvelous city) is as exhilarating as its annual Rio Carnival. But this does not mean that Rio is all about party. Brazil’s former capital has the second largest GDP among its cities, second only to São Paulo, which was roughly US$201 billion in 2008, and it is also the country’s second largest industrial hub. For many years, the city’s primary industry is tourism. It receives the most visitors per year of any city in South America (about 2.82 million), although annual arrivals have declined since the 1970s, when the capital was moved to Brasília and São Paulo emerged as the country’s financial centre. Hoping to duplicate what the 1992 Games have done to Barcelona, Rio de Janeiro’s government is embarking on a wide-scale revitalisation to reduce its chronic inequalities and re-energise its tourism industry, and in the process regain its commercial standing. Its historical downtown area is undergoing a wide-scale waterfront revitalisation project called Porto Maravilha, and the city’s iconic Ma-


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Chácara Flora, São Paulo

US$558,801

Four-bedroom detached homes, each costing US$558,801 and situated in a quiet gated community in São Paulo’s Chacara Flora, are ready for occupancy. Each has a total living area of 188 square metres, and comes with a first-floor balcony and a private covered parking area. Ideal for small families, the area is very close to Ibirapuera, Morumbi, shopping malls, the colleges of IBMEC, BSP and UNIP.

PHOTO BY LULU PINHIERO/COURTESY OF VISIT BRASIL/EMBRATUR

racaña Stadium is being renovated for the World Cup and the Olympic Games. Data from FIPE ZAP Index show that house prices in Rio de Janeiro rose 19.8% (13.9% in real terms) during the year to July 2012. From January 2008 to July 2012, average house prices in the city rose by 178.2% (118.4% in real terms).

NORTHEAST BRAZIL Aside from Rio and São Paulo, cities in the Northeast Region of Brazil are gaining plenty of attention. Many of these cities, such as João Pessoa, Natal and Recife, will also host matches during next year’s World Cup. Also known as the ‘Brazilian Venice’, the city of Recife is Pernambuco’s main industrial zone, and its main products are those derived from sugarcane (sugar and ethanol), electronics, food and, more recently, medical services (second only to São Paulo). Huge private investments and large supply of labour modernised the city’s hospitals, which receive and treat patients from all around the region. Its tourism sector is vibrant, thanks to impeccable infrastructure. And along with Natal, Recife is the only city with direct flights to the UNESCO World Heritage-Listed Fernando de Noronha. Considered the city where the sun rises first (at least in Brazil), Paraíba’s capital, João Pessoa, is an interesting mix of tropical beaches, modern architecture and historic colonial buildings. Its Estação Ciência, Cultura e Artes (Science, Culture and Art Station), a complex designed by the late

CITY AT THE CONFLUENCE Recife is located where the Beribe River meets the Capibaribe River. It’s also one of the 12 Brazilian cities to host matches for the 2014 World Cup.

architect Oscar Niemeyer, is located in the most eastern point of the Americas (Ponta das Seixas). Another up-and-coming Northeast city is Natal, the capital of Rio Grande do Norte, and considered by the Institute of Economic Research of Brazil as the country’s safest. It is said that the construction of the Via Costeira (Coastal Highway), a 10-kilometre avenue along the city’s shore and dunes, in the 1980s started its tourist boom. The city also got its ‘Carnatal’, a large off-season carnival that takes place sometime in November or December. And similar to its southern cousin, it involves plenty of music, jumping and, yes, dancing. Although for decades the Northeast Region is considered Brazil’s poorest, it is now quickly catching up with the rest of the country. In fact, statistics show that the region has been Brazil’s star economic performer over the past decade (annual average of 4.2% from 2000 to 2010). The region has also become a popular destination for second-home buyers, thanks to its fine coastline, and also because prices here are (still) a lot cheaper than those in São Paulo or Rio de Janeiro.

São Paulo

US$736,601

A property that offers an opportunity to invest in a fully operational ‘radical sports activity’ ranch in the São Paulo State, this country home has four bedrooms and three bathrooms in its main house, an additional master bedroom with double en-suite bathroom, a guest cottage and a property-keepers’ house, all within a 4.6-hectare plot of land. The area also boasts forest and nature trails and two well-stocked lakes in a superb mountain location.

Angra dos Reis, Rio de Janeiro

US$762,002

A property that offers an opportunity for a luxury waterfront home in the heart of Angra dos Reis in Rio de Janeiro State. It consists of a four-bedroom main guest-house, a two-bedroom property-keepers’ cottage with office, and a master bedroom suite separate from the guest-house all on a landscaped garden. It has direct access to the beach, and is 5 minutes from Anga dos Reis town centre.

Niterói, Rio de Janeiro

US$762,002

A luxurious modern-style house is situated in a quiet gated community in Niterói, which is conveniently located 15 minutes from downtown Rio de Janeiro. The property has an approximately 445 square metres of living space split into three levels. Its upper level has a master bedroom with an en-suite whirlpool bath and a large, double-side walk-in closet, and two additional bedrooms with en-suite shower rooms. The house has a modern kitchen, open-plan living and dining rooms with large glass doors, and a covered garage for two cars (plus an uncovered space big enough for two more). For more information, visit www.braziloverseasproperty.co.uk

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AIMING HIGH Kuala Lumpur’s Petronas Towers, the world’s tallest twin skyscrapers.

PHOTO COURTESY OF TOURISM MALAYSIA

Malaysia One will be pleasantly surprised at the variety of landed properties on sale throughout the country – at a fraction of the price you’ll find in neighbouring Singapore. By Steve Mallach

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he Malaysia My Second Home (MM2H) initiative is creating a stir amongst foreign investors looking for a home in South-East Asia. Already one of the top three retirement destinations in the world, the country seems to be making an all-out push to leverage its stunning natural scenery, excellent pricing and rapidly developing infrastructure. This push is perhaps most evident in the southern development corridor of Iskandar Malaysia, where Singaporeans especially are buying property in droves. 52

The establishment of Malaysia as a regional powerhouse has its origins in the country’s strategic sea-lane position, which brought trade and foreign influences to its shores for hundreds of years. Today the descendants of the original traders – Malays, Indians, Chinese and many other ethnic groups – make up the population of this vibrant country. Just as Malaysia became home to many of these traders and their families, it is today attracting foreign nationals seeking to put down roots in South-East Asia. This is partly due to an enlightened approach by the Malaysian government to foreign ownership of property. The MM2H programme is such an approach. It offers non-Malaysians an attractive 10-year renewable visa and other privileges in return for their commitment to the country. The programme is primarily attracting people who wish to spend their retirement years in Malaysia or who want to make Malaysia their home-base for extended periods of time. Around 12,000 people have been approved so far. The programme leverages what the Malaysian authorities believe are the unique selling points of the country: the low cost of living, a rapidly developing infrastructure, friendly locals, attractive tourist destinations and a generally excellent quality of life. The MM2H is not Malaysia’s only strategy for drawing foreign investment, however. Neighbouring Singapore – a small island nation with little land on sale and sky-high house prices – has plenty of residents looking for a better deal, such as for a second home, holiday home, primary residence and even a business. Malaysia’s long-term strategy has been to build up the infrastructure in the southern state Johor, the region bordering Singapore. By adding housing developments and high-speed rail transport, the strategy is taking hold: Singaporeans are flocking in and buying up.


FEATURE A P R I L — MAY 2013

UP AND COMING Sabah’s capital Kota Kinabalu is one of Malaysia’s fastest growing cities.

PHOTO COURTESY OF TOURISM MALAYSIA

Although there are many areas along the vast coastline, open hinterland and major urban centres of Malaysia for those in search of their South-East Asian dream home. Although the spectre of the global economic downturn continues to cast a pall over property markets in the SouthEast Asian region, the Malaysian property market seems to be a shining beacon of hope and sanity amidst the gloom and doom. Fuelled by strong growth in the tourism industry, increasingly robust macroeconomic fundamentals and new development, this growth seems to be accelerating rather than slowing down.

MARKET OUTLOOK Returns on property investment are extremely attractive. Malaysian home prices grew by an average of 6.6% in the fourth quarter of 2012. Taking advantage of this growth comes with a caveat for foreign buyers; you’re going to have to spend a minimum of MYR500,000 (US$160,128) (for the time being, as an increase is in the pipeline) on a property to enter the market.

JOHOR/ISKANDAR MALAYSIA North of Singapore and just over the causeway is the Malaysian state of Johor where you will find massive development corridor dubbed Iskandar Malaysia. Plans have been underway for quite some time to see this southern region become a viable business hub, adding infrastructure, schools (such as the acclaimed Marlborough College) and premium shopping to its tally list of credentials. Factor in a fair share of new housing developments, and it’s becoming an attractive option

for homebuyers and businesses alike. Although it’s twice the size of Singapore, it’s shaping up as a suburb of the smaller island-nation. Here’s why: Firstly, there’s a vast price difference. According to Global Property Guide, the average price of property in Singapore is US$16,000 per square foot, whereas in Malaysia, it’s just over US$2,000 per square foot. In a nation where land is scarce, Singaporeans are not only drawn to Johor by the drastic price difference, but also to the open spaces – an abundance of land. Secondly, transport between Singapore and Iskandar Malaysia will speed up with the Johor-Singapore My Rapid Transit system (as well as the high-speed rail to connect Singapore with Kuala Lumpur). Thirdly, OCBC bank offers 80% mortgages for Singaporeans buying into Malaysia. A sampling of the market shows vacant bungalow lots in Nusajaya’s desirable Ledang Heights development are available at between MYR100 and MYR120 (US$32–38) per square foot. As recently as June 2012, the prices ranged between MYR25 and MYR30 (US$8–9.61) per square foot. A 5,500-square-foot, Balinese-style, single-storey bungalow in Ledang Heights, built on an 11,089-square-foot plot of land, is currently on the market for MYR2.3 million (US$736,588; negotiable). Contrast this to a similar property in Singapore’s Sentosa Cove (built on a 6,800-square-foot plot of land) priced at US$22.38 million (around MYR70 million) and the attractions of the Malaysian property market become very apparent.

KUALA LUMPUR/KLANG VALLEY Malaysia’s capital is often the destination of choice for expats. Kuala Lumpur has a vibrant nightlife and a deliciously eclectic culinary scene, world-class malls and access to all the amenities, including private schools and clubs. Factor in a rapidly developing urban rail system and the popularity of the capital city and its environs is no surprise. Landed property in or near the city centre is an expensive option and the everimproving public transport network aside, you’re going to need a car if you live some distance from your place of work. Traffic can be an absolute killer. It’s a testament to the placid nature of the Malaysian populace that road rage is not the national sport (the national sport used to be Sepak Takraw, a sort of hacky sack/badminton variant, but today the national pastime is badminton and complaints about the traffic in Kuala Lumpur). New residential projects have seen buyers snap up landed property in and near Kuala Lumpur. In the popular Klang Valley (how could you not want to live in a place called the Klang Valley?), just a stone’s throw from central Kuala Lumpur, a residential development called The Verdana has recently recorded a take-up rate of over 70% within a month. Malaysian residents and foreigners wishing to become part of the Klang Valley lifestyle are spoilt for choice. Neighbourhoods range from lush green suburbs set in rolling hills to vibrant townships or gated communities. As part of the Klang culinary culture, you will never be far from an eatery of some description, from street food and hawkers to five-star international cuisine.

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Landed homes in the area remain popular with prices for double-storey units hovering around the MYR1 million (US$320,256) mark in Kuala Lumpur suburbs such as Petaling Jaya, Damansara and Bangsar. Scarcity of land in these prime locations and pent-up demand is expected to drive prices higher. In a bizarre ‘Through the Looking Glass’ scenario, the activities of Malaysia’s criminal underclass in Kuala Lumpur have to an extent benefitted some property owners. Perceived levels of crime are powering a rising demand and an increase in the value of gated and guarded developments with shared amenities such as pools, gyms, barbecue pits and tennis courts. How much of this perceived crime wave is affecting prices is open to debate. All that can be said is that the Malaysian authorities are moving swiftly to deal with the situation.

PENANG This island is a world away from the bustle of the capital. As a popular choice for weekenders and retirees, Penang offers a more laidback lifestyle (this seems to be the recurring theme of many Malaysian cities) and some of the best food in the country. The expat community is small but growing (another recurring theme), but the housing is cheaper than in Kuala Lumpur and surrounding areas, with a range of houses and bungalows to choose from. There are a number of good international schools in Penang, and it is only 45 minutes’ flight from the capital and about the same from Singapore.

PHOTO COURTESY OF TOURISM MALAYSIA

A RIVER RUNS THROUGH IT Downtown Kuching (above), capital of Sarawak. The Christ Church in Malacca (below), legacy of Dutch colonial rule.

As a lifestyle choice and investment, Penang landed properties continue to deliver. By way of example, properties launched 5 years ago in the luxury gated community on Setia Pearl Island in Penang, originally purchased for MYR650,000 (US$208,166) are now being sold for more than MYR1 million (US$320,256).

MALACCA The port of Malacca in the southern region of the Malay Peninsula was founded in the 13th century by a Sumatran prince named Parameswara and swiftly secured its place in the history books. Within 50 years of its

establishment it was one of the most strategically important trading hubs for West-bound cargo and spices. At the height of its reach and power, Malacca controlled the entire west coast of the Malay Peninsula, the kingdom of Pahang, and much of Sumatra, which is today part of Indonesia. Today the port of Malacca with its historic waterfront is widely recognised as a gem in Malaysia’s crown. A multicultural vibrancy, fabulous local and pan-Asiatic food and historical buildings make Malacca (or Melaka) a prime tourist destination. The expat community in Melaka is quite small, but growing as educational options become more varied and infrastructure development takes place, making the obligatory car journeys quicker and less stressful. The most luxurious properties in freehold gated and guarded communities in Malacca today fetch between MYR880,000 (US$281,825) and MYR1.5 million (US$480,384) for two-storey semi-detached houses and two-storey bungalows. These units are built on plots that range between 4,000 and 13,000 square feet. Although the entry prices for landed property in Malacca remain reasonable, especially in relation to property prices in neighbouring Singapore, rapid development is bound to drive prices higher within the short to medium term. The area is worth a look right now.

KOTA KINABALU

PHOTO COURTESY OF TOURISM MALAYSIA

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The cultural melting pot of Kota Kinabalu in East Malaysia faces the South China Sea in the shadow of Borneo’s tallest peak, Mount Kinabalu. As the capital of Sabah (one of Malaysia’s two states on the island of Borneo), this city is gradually attaining a cosmopolitan air, while retaining a reputation for the laidback lifestyle. Tourism is a factor in the growth in this lush green ‘nature city’. As it enjoys close proximity to some of the richest


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marine habitats in the world and a number of beautiful islands, Kota Kinabalu is popular with visitors and has a growing expat population. Its international airport is increasingly servicing a growing list of destinations in the region and private schools are springing up. Landed property prices in Kota Kinabalu have doubled in the last 4 years, putting many properties beyond the reach of lower- to middleincome earners in Malaysia. A terraced house built in the city’s outskirts can now cost upwards of MYR500,000 (US$160,128) and the average plot size is shrinking fast. Today, homes like this, which used to occupy a land area of about 2,500 square feet per unit, are now being built on 1,500 square feet. Prices for newly completed two-storey houses in Kota Kinabalu and its suburbs are between MYR380,000 (US$121,697) and MYR850,000 (US$272,217) with units boasting a land area of 1,900 square feet. At the upper end of the market, ecoluxury Borneo resort properties like the Balinese-style deluxe villas at Kudat Riviera range in price from US$500,000 to US$3.9 million. Six kilometres of pristine coral-sand beaches and crystal-clear waters make this an ideal getaway destination. This resort is accessible from Kuala Lumpur, either via a 21/2 yacht transfer or a 40-minute helicopter ride. This is definitely entering the rarefied atmosphere of the megawealthy in terms of the Kota Kinabalu and its surrounding area.

KUCHING Kuching is the capital and most populous city of the East Malaysian state of Sarawak. A culturally diverse city where the expat community is slowly gaining a foothold, Kuching is firmly on the Malaysian property investment radar. Opportunity exists for property owners to get in on the mezzanine level of growth, if not the ground floor. There are various international schools in Kuching, and the pace of life is slower than in Kuala Lumpur. Standard double-storey terraced houses are today commanding prices between MYR350,000 (US$112,089) and MYR400,000 (US$128,102). Demand is strong for new residential projects on the outskirts of Kuching, such as Matang, Batu Kawa and along Kuching–Serian road, and this is set to drive property prices higher. Malaysia is a relaxed and welcoming multicultural gastronomic paradise. With towering skyscrapers that contrast with deep jungle and pristine coral reefs surrounding untouched tropical islands, it is a country that can reward a variety of investors, as well as those in search of a South-East Asian home base. It is definitely worth exploring.

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Legenda @ Southbay, Penang Island

US$1.4 –1.79 million

Consisting of 76 three- and four-storey bungalows (6,830 to 7,170 square feet) within a low-density gated community, Legenda @ Southbay offers modern homes with a luxurious resort feel. Each house boasts generously sized car porches that can accommodate up to four cars. Other features built into the design emphasise on sun shading, cross ventilation and rain protection in view of the local climate. The community’s clubhouse has an infinity pool, a gym, a community hall, and a two-acre park. For more information, visit www.southbay.com.my

Setia Pearl Villas, Penang Island

US$1.056 million One of Penang’s prime luxury lifestyle developments, Setia Pearl Island is a 112.6-acre sprawl of well-designed villas, tropical landscapes and resort-like facilities. The development is conveniently linked to the island’s major thoroughfares such as the Jelutong and Bayan Lepas Expressways, Penang Bridge and the upcoming second bridge link from Batu Maung to Batu Kawan. Its 35 Pearl Villas each has a minimum built-up area of 6,577 square feet, a private pool and function deck, home automation system, and bedrooms with attached bathrooms. For more information, visit www.spsetia.com.my/setia_pearl_island/

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Master of curves

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elebrated Brazilian architect Oscar Niemeyer once said: in architecture, the most important thing is astonishment. And astonished is exactly what Yuri Gagarin must have felt when he visited Niemeyer’s Brasília. The pioneering Soviet cosmonaut likened the experience to landing on a different planet. He meant it as a compliment, of course, and many other people before him must have felt the same way.

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The Brazilian capital is so out-of-place it seemed to have landed in the country’s vast, dry interior aboard a meteor. Brasília’s architecture was (and still is) forwardlooking, a bold statement from a designer who tried to find the forms of tomorrow. Nothing of the same has been done before anywhere on earth. The curves, according to Niemeyer – who passed away in December last year at the age of 104 – were inspired by none other than Brazil itself: ‘Its mountains, its rivers, its ocean, and

the body of the beloved woman,’ he wrote in his 2000 memoir. Indeed all Niemeyer had to do was to look outside the window of his Rio office, stare at the Sugarloaf Peak, the women bathing at the Copacabana Beach, and he had his next architectural masterpiece. Few architects were able to summon such design vision. Niemeyer’s Brasília was daring, sculptural, colourful and, in some cases, seemed to defy the very laws of physics – exactly what Brazil needed to


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Both lauded at and criticised for his designs, it can’t be denied that Oscar Niemeyer changed the way structures and cities are built – and appreciated. BY RODEL AMBAS JR. PHOTO BY LUIZ TRAZZI MARTINS/COURTESY OF VISIT BRASIL/EMBRATUR

declare itself. Its choice of location is as symbolic. Brasília’s importance, it is said, is confined not only to its modernist architecture, but also to its strategic role in integrating a vast yet fragmented nation. It was in 1956 when Niemeyer was invited by Brazil’s new president Juscelino Kubitschek to design the civic buildings for Brazil’s new capital, and along with Lúcio Costa as chief urban planner and Roberto Burle Marx as landscape designer, they were tasked to build a new city far

(STYLISH) HOUSE OF GOD Niemeyer’s Cathedral of Brasília, one of his most acclaimed works.

from any existing ones, 600 miles from then-capital Rio de Janeiro in the southeastern coast, and sitting atop a 3,000foot plateau in Brazil’s central Highlands. The city was inaugurated in 1960, the same year it became the country’s capital.

In an obituary written by British architect Norman Foster, he described Brasília as not simply designed but choreographed. ‘Each of its fluidly composed pieces seems to stand, like a dancer, on its points frozen in a moment of absolute balance.’ But despite Brasília’s seemingly elitist, modernist and futuristic tones – from the bowl-shaped domes of the National Congress of Brazil, the columns of the Cathedral of Brasilia, to the bone-like concrete

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PHOTO BY CHRISTIAN KNEPPER/COURTESY OF VISIT BRASIL/EMBRATUR

CITY OF MONUMENTS The Warriors by Bruno Giorgi (above); Juscelino Kubitschek Memorial (right); and the famous domes of the National Congress of Brazil.

PHOTO BY BETO GARAUELLO/COURTESY OF VISIT BRASIL/EMBRATUR

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PHOTO BY BETO GARAUELLO/COURTESY OF VISIT BRASIL/EMBRATUR


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columns of the Palácio da Alvorada – Niemeyer’s choice of material was quite utilitarian: reinforced concrete. In fact, it was this very choice that made the creation of the structures possible. Niemeyer loved concrete for its plasticity. He believed it could be painted in luminous colours or decorated or shaped in any way. But above all, he loved it for the fact that it demanded unskilled labour. For Niemeyer, an avowed socialist, concrete meant the liberation both of buildings and of men. This same ideology (and his association with Communist Party of Brazil) cost Niemeyer much. When a military dictatorship swept over Brazil, he was forced into exile in 1966 and opened an office in Paris that same year. He found customers in diverse countries during his time in France. He designed the University of Science and Technology-Houari Boumediene in Algeria, and the headquarters of the French Communist Party in Paris and of the Mondadori publishing company in Milan, Italy. He also designed furniture produced by Mobilier International. Though far away from his motherland, his designs during his exile evoked the same beauty of Brazil that inspired him to design in the first place.

Activism should be undertaken politically and that simplifying architecture to such purposes would be anti-modern. His leftist inclination didn’t escape criticism for his work, however. Some critics argued that Niemeyer’s designs had a bourgeois character, and therefore were the antithesis of the very ideology he adhered to. But Niemeyer was sceptical about architecture’s ability to change an unjust society. According to him, activism should be undertaken politically and that simplifying architecture to such purposes would be anti-modern. He was also an atheist throughout his life, though it never stopped him from designing religious structures. Indeed, in designing the Cathedral of Brasília, one of his most acclaimed works, his intention was for the large stained-glass windows to ‘connect the people to the sky, where their Lord’s paradise is’, although he never believed one minute of it. He returned to Brazil in the early 1980s when the country’s dictatorship ended under João Figueiredo’s rule. At

PHOTO BY BETO GARAUELLO/COURTESY OF VISIT BRASIL/EMBRATUR

FROM OUTER SPACE The Brazilian National Museum.

that time he designed the Memorial Juscelino Kubitschek, the Pantheon and the Latin American Memorial. Brasilia was then declared a UNESCO World Heritage Site in 1987. Niemeyer, meanwhile, was awarded the Pritzker Architecture Prize in 1988, at the age of 81. He designed at least two more buildings in Brasilia in the 1990s: the Memorial do Povos Indegenas (Memorial for the Indigenous People) and the Catedral Militar, Igreja de N.S. da Paz. Then he again stunned the design world with his Niterói Museum of Contemporary Art in Niterói, a city next to Rio and offers a spectacular view of the city and Guanabara Bay. Niemeyer often said that he was strongly influenced by Swiss-born architect Le Corbusier (with whom he collaborated, along with other architects from around the world, in the design of the United Nations Headquarters in New York City). It was from Le Corbusier that Niemeyer learned to design according to the principles of full-width strip windows, rigid sun shading, roof gardens, pilotis (columns raising a building above the ground), and, most important of all, free-forming plans within a grid of columns. But he also said that that admiration didn’t stop him from pursuing a different direction. ‘Niemeyer added to these advantages a tremendous exploitation of free form, greater perhaps than that deployed by Le Corbusier himself,’ Foster wrote. As Le Corbusier observed years later: ‘From the outset Niemeyer knew how to give full freedom to the discoveries of modern architecture.’ Foster, recalling his meeting with Niemeyer in 2011, wrote that it seems absurd to describe a 104-year-old as youthful, but his energy and creativity were an inspiration. He said that 'architecture is important, but that life is even more so. What matters is to improve human beings.’

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Cutting-edge digs High-tech homes are no longer the domain of the extremely rich. By Albert Fontenot

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everal years ago, Bill Gates built his famous mansion nicknamed Xanadu. The building process took 7 years with a total cost of US$63 million. Although the home is as large and luxurious as you would expect, Xanadu captured the public’s attention, not for its size or opulence, but instead for the previously unheard of level of technological advancement and customisation that it incorporated. The house was, and still is, a marvel of automation and homeowner convenience, as is befitting the home of the founder of Microsoft. Luckily for the rest of us, nearly that same level of home automation is now much more widely available, with homes that can very nearly serve as inhabitable assistants, not only following your every

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command, but actually capable of learning and anticipating your needs. The best news is that you don’t have to be Bill Gates or have his bank account to have such a home. It is no lucky accident that the advent of the smartphone coincided with the rise in popularity of automated devices for the home. With high-speed Wi-Fi and Bluetooth, and sophisticated operating systems, smartphones have already changed the way people get their news, work, play, and interact with one another, and it is likewise changing how we interface with our homes. Today’s ultra-powerful smartphones have virtually eliminated technology that was once popular, such as pagers, mp3 players, cameras, palm devices, voice recorders, and alarm clocks. The next logical

step may be to render the push button obsolete. The need to actually press a button to operate a device in your home is rapidly diminishing, and may soon be a quaint reminder of our low-tech past, like cassette tapes and rotary phones. Although there are still some control functions that require you to flip a switch, for an increasing number of tasks, the most strenuous activity you might have to do is pick up your phone, call your house, and tell it what you want it to do for you. Let’s take a look at how technology that that is currently available on the market could change and simplify your life if it were currently installed in your home. This is not science fiction. These are technologies that already exist in homes. As you arrive home after your long day at work, and you approach your front door


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with an armload of groceries for tonight’s meal, there is no need to fumble with keys. Your Lockitron device has detected an automatic Bluetooth signal from the phone in your pocket and unlocks your door as soon as you are within a few paces. As soon as you are in the door, the Nest thermostat on your wall actually senses your presence and adjusts the temperature to your preferences. You head towards the kitchen, where the oven is already preheated, thanks to the phone call you made earlier to your BeeWi Mobot, telling it to turn on the oven. Thanks to your installation of Anvil cabinetry, your cabinet doors unobtrusively slide open with a wave of your hand, making it easier to reach needed ingredients. A barcode or RFID scanner can detect which items you have taken from the cabinets and prepare a future shopping list, or even order replacement groceries. While you are prepping, you say aloud to HAL, your aptly named home intelligence unit, to play your ‘Cooking Dinner’ playlist. Through microphones that have been installed throughout your home, HAL hears your message and sends your music through wireless speakers. Once your meal is in the oven, you have time to freshen up before dinner. If you are using a microwave, you need have no worries about unevenly cooked food because your oven has infrared sensors that can detect level of doneness and adjust cooking times. You don’t have to tidy up the rest of the home before dinner, because your sweeping and vacuuming robots have done their due diligence during the day. Likewise, your plants have been watered, your pets fed, and your lawn watered and even mowed, all on an automated schedule. As you move throughout the house, biometric sensors can detect and identify you, turning lights on and off as you enter and leave a room, and also adjusting the temperature and lighting for the particular room you are in. If you wish to take a relaxing bath before dinner, you make use of Bathomatic, which will automatically fills your bathtub to a temperature and fill level that you

GADETS FOR YOUR HIGH-TECH HOME The Nest thermostat installed to a wall (top), which can sense if somebody is inside a room and adjusts temperatures accordingly. The Lockitron device can be installed to a door and operated using a smartphone. PHOTOS COURTESY OF NEST AND LOCKITRON

previously set. There is no need to worry about overflowing. The Bathomatic can even add fragrances and bubble bath. While in the bathroom, you can get an instant checkup from a toilet that will take your weight and temperature, measure your blood pressure, and check the sugar level of your urine. Coming out of the bath, you hear a message over the from HAL over the speakers that a stock you have been following has reached a certain point, letting you know that it is time to either buy or sell. You sit down on your Athena couch, a luxurious sofa with a built-in LCD computer, and quickly make the necessary transaction. When dinner is ready, you announce to HAL that it is dinnertime, and the music, temperature, and both the brightness and colour of your lighting is adjusted to your preferences.

Later on, while watching television, you will be able to change the channel and volume just by simple hand gestures, thanks to the same technology used in interactive gaming. If you receive a phone call or Skype message, the notification can be displayed on your TV. You can even Skype directly on your TV, if you prefer. When you retire for the night, you don’t have to worry about your home security or safety. Smoke and carbon monoxide detectors, as well as pressure and motion sensors, will all act as safeguards while you sleep. If all this seems like a bit much, then remember that home automation technology is still in its infancy, and the industry is primed for an innovative explosion. In January 2013, Microsoft agreed to buy home automation startup R2 Studios. What is particularly interesting is that both Apple and Google were also looking into buying R2. Anytime Microsoft, Apple and Google all vie to purchase the same company, you can be sure that it is worth keeping an eye on. An automated, interactive home is truly the home of the now and of the future. It offers a level of unprecedented comfort, convenience and customisation heretofore unheard of. By freeing you from mundane tasks, automation technology allows you to be more creative and productive than ever before.

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FEATURE A P RIL — M AY 2013

Design purpose GFAB’s Gary Fell talks to Property Life about sustainability, roof issues, and why he sparingly uses curves. By Rodel Ambas Jr. PHOTOS COURTESY OF GFAB ARCHITECTS (WWW.GFABARCHITECTS.COM)

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FEATURE

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elebrated Swiss-born French architect Le Corbusier once said that a house is a machine for living in. I couldn’t agree more. Dwellings, as are buildings and structures intended for human use, often become the physical expression of an architect’s taste and design genius yet they fail to live up to their original purpose. Some become monuments that exhibit technological prowess, while some an affirmation of one’s wealth. And that’s exactly what British architect Gary Fell, founder of Bali-based GFAB, is not doing. Educated at University College London’s Bartlett School of Architecture, Fell moved to the Indonesian island, first temporarily, to oversee the construction of a Four Seasons hotel in Sayan – a stint he considers a trial by fire (some 4,500 or so on-site people asking one architect on how to do things!). Perhaps it’s the conducive ambiance of a tropical locale that prompted Fell to settle permanently in Bali, and after a while decided to put up his own architectural firm, often described by design magazines as ‘progressive’ (to which he jokingly replied, ‘I have no idea what that means, but it certainly sounds good – better than alternative or contrary!’).

CLEAN LINES Gary Fell’s signature geometric lines and fluid design as exhibited by the villas of Samujana in Ko Samui, one of his acclaimed works. Poolside of the FCC Hotel in Siem Reap, Cambodia (below).

A P R I L — MAY 2013

Progressive certainly is an abstract term. It could mean one’s dexterity in designing breath-taking structures. To some it may mean one’s ability to harness technology in order to do so. But for Fell, it may have something to do with his refusal to go the same direction as most upscale holiday homes being designed throughout South-East Asia – the same school of thought that reproves design that does not reflect the traditions and culture of its host locales, which Fell finds quite insulting. He feels this pervasive attitude has been corrupted into some kind of proto-Disney position (traditional roof + lots of rattan interior = Bali hotel). In fact, Fell dislikes the way ‘culture and heritage’ has been enslaved to the tourist industry or for political gain. A ‘movement’ he describes as little more than nationalism in a different suit. However, he acknowledges that his refusal to engage with such ideas meant he had to wait for the right clients – those, he accurately describes as ones with sufficient vision to see past the coffee-table books they bought at the airport. Just one look at any GFAB-designed structure and it’s easy to know why. Fell and his team steer clear of ‘making funny shapes’ that may seem en vogue now but not tomorrow. In fact, he says he doesn’t see this a deviation from what many architects are doing right now, and there is a strong current crop of architects in the region doing the same things they do. Fell also admits his attraction to the rigour of clean, geometric lines, and that there is a prosaic side to it. Indeed, why spend significantly more for a room that is, for example, an irregular trapezoid, he asks.

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STYLISH YET SUSTAINABLE Fell aspires for fluidity in his designs, which resonates green and sustainability. Façade of one of Samujana's villas (above); poolside of Four Points by Sheraton in Siem Reap; and villas at Isthana Naithon in Phuket (below).

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He also says that he’s quite a stickler for proportion, and spends plenty of design time on it. ‘I often ask my [engineering] collaborators to work that bit harder to achieve this. I believe that abstraction is essentially our game as architects.’ And he rarely resorts to curves, not out of hostility, but as recognition of their design strength – too much of it, in fact, which often can overpower their surroundings. And also because when he does use them they look too much like Oscar Niemeyer’s.


FEATURE A P R I L — MAY 2013

His works are also noted for their fluidity. His signature style is fluidly connecting a dwelling’s indoor spaces with its outdoor areas, which somehow resonates of green and sustainability. ‘It is true that in many of our projects, there has been a conscious decision to try and keep spaces fluid and open,’ he said, ‘[which] often has been a reaction to the sites given us as well as how our clients choose to live.’ But he also adds that sustainability is a given when making work today. ‘We have to care how much energy our buildings are using, and we should make every effort to create an architecture that is sustainable and sensitive to its environment.’ This isn’t a ‘badge of honour’, according to Fell. Instead, this design philosophy should be intrinsic to the way every architect works. He also says that more clients now, most of them private individuals, are becoming more openminded. ‘I find it hard to understand how anyone might think differently,’ he

shares. ‘Using planters for roofs is a simple “passive”-type measure that insulates superbly and looks good into the bargain – why wouldn’t we use such an approach regularly?’ What amazes him, however, is how such measures are often greeted with hostility. ‘In many cases around the region getting permits for buildings without an “Asian” or “local” roof form is astonishingly hard,’ Fell shares. ‘The energy considerations are simply not appreciated and pseudo “cultural identity” trumps all too often.’ Then there’s also the lack of government incentives for such environmentally sound options. ‘These types of buildings may get tax incentives in Europe, but not in Asia, where such things are considered luxury goods.' Economics is the key, he says. ‘Few developers will pay more for sustainable designs or more energy-efficient technology. They get it’s great, but their aim is to sell.’ In his experience, GFAB has had more success when the client is the end-user who certainly sees the benefits of such design over time.

Another challenge, which Fell says is rather inescapable, is the region’s climate. ‘Obviously the climate has a huge bearing on how one designs and keeping the building’s fabric reasonably cool is important.’ This kind of environment is not particularly kind to buildings per se. Hence, there’s an ongoing ‘battle’ with nature in the design process, but also a desire to embrace it in one’s work, which, after all, is what architecture is and should be about. But one thing Fell is proud about is how their projects use their sites really well. ‘Often we seem to be able to get more from a site than was originally expected; creating the appearance of a larger “lot” than what is in fact the case.’ That, and obviously being progressive, best describes GFAB and Fell. But if you think about, it is what architecture is all about: to create a house much akin to Le Corbusier’s definition of one, that it should be for living, not to mention being conscious of its environment.

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FEATURE A P RIL — M AY 2013

Sale sense How to prepare and decorate your house and garden for a viewing. BY Kriti ILLUSTRATIONS BY Donna

Jindal Pahignalo

PHOTOS COURTESY OF CHURCHILL REAL ESTATE

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etting go of a home that has beautiful memories is never easy, especially if you are still living in it. But now that you have decided to put the house up on the market, it’s time to give it a nice facelift.

Decorating your house for a sale is very different from decorating it for yourself. The décor must not reflect your personal taste and style, and it is best kept neutral, leaving room for the imagination of potential buyers. Your own personal décor may overwhelm and can have a negative connotation on the sale. The fundamental principles of selling property are perception and aspiration, so as part of your sale preparation, work on building both into the presentation of the house. After all, the price that the house can command depends a lot on how the buyer perceives it. If the house has aspirational value for the buyer, half your work is done! On the other hand, even a small plumbing fault can dissuade a buyer from making the sale.

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Your sale-preparation calendar

15 Planning is key Strategise the re-decoration in advance and set aside a minimum of 15 days dedicated to preparations for the open house (viewings). u

Create a countdown calendar and set tasks for every member of the family.

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Involve the children so they are aware and prepared for the move.

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Host a get-together for friends and family. The occasion will help refresh fond memories associated with the house, as well as help you and your family mentally prepare for the sale.

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Direct your styling efforts towards stimulating all five senses.

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Try to break your emotional bonds with the house and remember that it is a step forward.

DAYS FROM THE VIEWING Start by cutting down the clutter. Review everything that has not been used in a while – the amount of stuff collected over the years will leave you amazed. A few cardboard boxes will help you get organised. For example, mark one box as ‘donations’ and fill it up with old clothes, toys, books and magazines. Once the boxes are packed, drop them off at your local charity. Throw away old, dirty and unnecessary things like broken crockery, electronic gadgets that don’t work and other bits. De-cluttering will require time, patience and energy and so it is advisable to begin your preparation early. A sprawling green lawn will have a calming and relaxing effect on potential buyers. Get one of your family members to water the grass every day for the next 15 days. By the time of the open house, the lawn will be lush green.


FEATURE A P R I L — MAY 2013

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DAYS FROM THE VIEWING Review the furniture in the house. Create space for people to walk around without bumping and bruising their knee, and remove furniture that may cause obstruction or are unnecessary (like extra side tables, a high chair, futons and other such pieces). You may find it helpful to rent a small storage space and transfer these excess bits. This is also a good time to remove the things that you would like to take with you to the new house. If you own an heirloom 19th-century carved bathroom mirror, for example, it is best to remove it now rather than explain later that it is not meant to be a part of the sale. Take down all family photos from the mantel place and remove all religious artefacts. Remember to pack up small things like fridge magnets and books. Make the house look like a blank canvas so that it is easier for prospective buyers to imagine their own personal style in the new house.

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DAYS FROM THE VIEWING With ten days to go before the viewings begin, check for areas that need minor repair work, such as leaking faucets or switches that don’t work, and fix these. Replace fuses and dim light bulbs with highwattage ones for extra light. Fix jammed drawers and cabinets that may have come off the hinges. If the drapery requires cleaning, drop it off at the dry cleaners. This will give you sufficient time to redress the windows before the open house. Check every corner critically. Dedicate these two days to a fix-up.

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DAYS FROM THE VIEWING Refresh the house with paint wherever required. Neutral colours – beige, golden honey, light powdery blue and tan – are your best bet and never go out of fashion. These colours also reflect light and make

the room look brighter and will leave the new home owner the choice to repaint or leave it as is. Don’t choose a color that catches your fancy but may not appeal to the new owner. An accent wall in a bright shade can be a hit or a miss. It is better to keep them all neutral, although if you fear monotony, use different shades of neutral hues in various rooms.

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DAYS FROM THE VIEWING Dedicate the next five days to decorating. It’s time to highlight the assets and create a warm and inviting atmosphere. Keep in mind that light plays a big part as buyers are put off by dark, dingy places.

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DAYS FROM THE VIEWING Clean your house like never before. Plan to start with one room and then proceed to the next. The kitchen is a critical area in any sale and will be deeply scrutinised by the prospective buyer, so be sure to remove everything from the counter. Hire extra help if you need to. Dust off cobwebs and wash all windows inside out. You may need to use strong detergents to do the job. Pay extra attention to the flooring. If the carpet is wearing off, it is best to change it. If not, then use shampoo and extractor to clean the carpet (you may be able to rent deep-cleaning kit in your area). Wooden flooring needs to be sanded and polished. Let the professionals do the work if you are unsure. Every speck of dust, grime and grease should be removed everywhere. Light fixtures and ceiling fans tend to gather the maximum dust. Also clean the mould from in between the tiles in the bathroom. Vacuum the house and rake the backyard every day from now until the day of the open house (if there is debris such as falling leaves). Don’t ignore the swimming pool if there is one. Consider draining the pool and checking for broken tiles and then re-filling it with fresh, clean water. Clean the house until it sparkles like a diamond. A clean and polished house is your ally!

LIVING ROOM Cut fresh flowers from your garden or buy a bunch of lilies and arrange the flowers in a large crystal vase and place them about. The flowers will add colour and freshness and the crystal vase will sparkle in the light. Maximise light by strategically placing glass and mirrors that reflect light. Don’t push your furniture to the walls to create space. Instead, pull out your rug and neatly arrange the sofas and armchairs around it. Keep the coffee table but remove any extra furniture – the neat rectangular area in the middle of the living room will make it look much bigger. Wherever possible, design an illusion of clean, straight lines. A cosy nook will create a homely atmosphere in the house that will highlight a personal space. Use innovative ideas to fabricate a small corner, a bay window or the space under the staircase for this personal retreat. Group a comfortable armchair, ottoman and a small table together or create a window seat. Add cushions and throw pillows for a cosy, comfortable feel. Effective use of space will add a surprise factor.

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FEATURE A P RIL — M AY 2013

with tiebacks and place a small wicker basket with the toilet essentials neatly arranged. Stash all extra toiletries in a storage cabinet. A bag of potpourri will keep the bathroom smelling fresh.

FOYER BEDROOMS Luxurious linens in silk and satin will add a grand feel to the bedroom and these fabrics will shimmer in the light. If your bed looks a little dated, changing just the headboard may do the trick. Look for a clean, simple, tufted headboard in solid colours (as opposed to prints), as it will not distract the focus from the rest of the room. Tidy personal closets. Most potential buyers will open wardrobes and drawers to check for space. Personal belongings falling out of the closet will not be a pretty sight. A well-arranged cupboard also signifies that the house is well looked after.

Don’t ignore the entryway. Remember that this will make the first impression, so place an attractive console table at the entryway and hang mirrors on the wall. Choose one large mirror or a few same-sized, small mirrors. This is again a trick to increase the amount of light.

KITCHEN

BATHROOMS A luxurious bathroom that feels like a spa is a winner. Change the wallpaper or repaint, if necessary. Nobody likes to see torn, dated wallpaper in the bathroom or paint chips falling from the walls (especially if due to mould). Roll clean towels neatly on a vanity rack and place a few scented candles in the bathroom. A plush bath rug also adds a lavish feel. Draw the shower curtains and neatly tie them

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Now is the time to decorate your sparkling kitchen. Clear off everything from the countertop. Arrange the utensils, crockery and ingredients in a neat and orderly manner in designated cabinets or the pantry. Open the windows and place a small pot of parsley or coriander on the windowsill. Hang washed and starched kitchen towels in plain view.

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DAYS FROM THE VIEWING It is not just the interiors, but also the exterior that a prospective buyer will evaluate. Use high-pressure hose to clean the garage and the driveway. Mow the lawn and de-weed the flower beds today.

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DAY FROM THE VIEWING Scrutinise the property inside out. Walk around with a friend to critically check everything. The eye should move easily and the house should look pleasant. Fix any last-minute issues. Go through your property papers once more and then take time to unwind and relax. You’ve worked hard these past 15 days.

On the day of the viewing Firstly, get up early and make the beds (no one likes to walk into a bedroom that has been recently slept in) and replace or add fresh flowers throughout the house. At this point, your house should be shining like new, de-cluttered and clean as a whip. But there’s one more trick of the trade – appeal to the buyer’s sense of smell. Here’s a concoction that works really well: bring to boil three cups of water with some peels of an orange, lemon and apple. Add a few cinnamon sticks or a few whole cloves and let it simmer in a kettle. The sweet smell of the brew will fill the house and it works better than any air freshener. Alternatively, if you have the time or wherewithal, bake some cookies to leave out for your visitors (potential buyers) along with some fresh drinking water – the snack is a nice touch and there’s nothing better than the smell of freshly baked cookies to make a house feel like a home. One final thought: the buyer will not only evaluate your house, but the neighbourhood as well. Inform your neighbours about the sale and ask them to clean the façade of their properties and to tidy up their gardens (especially any bits that are visible from your home). A good sale price for your house will also boost their home value, too!


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FEATURE A P RIL — M AY 2013

Letting? You need help! Even small-scale investors will do well seeking a property management service. Jennifer LS Harrison BY

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you try and fail to manage your property on your own, you risk running down the value of your investment.

KNOW THE LAW First, there are laws regarding tenancy and habitation that are specific to rental properties. These may include the need for fire exits, maximum capacity for tenants, or permission to rent to individuals or families (if you own a co-op or condo, for example, there may be restrictions on children). It is always advisable to consult an attorney or licensed real-estate agent to understand any laws relating to your property. A property-management expert will already know the laws or have an attorney on contract (or even on staff) for exactly this kind of service.

TENANT SOURCING Next, there is the issue of sourcing tenants. Whether you seek long-term or short-term tenants, finding the right tenant – one who will live up to the commitment set out in the lease or contract, who is capable of payment, who is not a criminal – is a job in and of itself.

© SXC.HU / ANT_54

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hether a small-time investor with one property right next door to your own home or a largescale, worldwide investor, there are certain, distinct advantages to hiring a property manager or property management service. Let’s just say that you have what might seem to be the best-case scenario for a small-scale rental property: you own a duplex and live in one half. By trade or by hobby, you’re an electrician, or a carpenter, or even a real-estate agent. So you think you can rent out the other half of the duplex, look after the maintenance or tenants, and earn some easy money. Reality check: there is always more to the job than it seems on the surface, even for this type of ‘best-case scenario’. It’s doubly true that there’s more to the job if you have several properties or live far from your investment. In all cases, you need to consider seriously, and preferably not by trial and error, whether you have the time and ability to manage this business. Because that’s what it is – on any scale – a business. If


FEATURE A P R I L — MAY 2013

Researching and implementing the best options for finding a tenant, such as placing ads in the local newspapers or online portals, may require local knowledge; and there is some skill in the craft of writing an enticing ad that attracts the largest selection of tenants possible (giving you the most choice) – but for the right tenant. Then, there are background and credit checks necessary to be sure. A property manager, due to experience and local knowledge and an understanding of the local tenant pool, will be adept at writing ads for rental properties, know exactly which photos of the property to show, and already have a system in place for conducting the requisite background and credit-history check.

TENANT CHANGEOVERS This is especially important for rental units in holiday areas where there is a frequent exchange of tenants, such as once every one or two weeks. There really is a high level of owner involvement required at this stage, especially if not employing a property manager. From scheduling the bookings in advance, to meeting and greeting the renters upon their arrival, providing them with a key and instructions/introduction to the property, collecting payment, contract signing… and then returning again at the end of the stay to collect the key and any outstanding money due and inspecting the property for damages. It’s a highly involved and ongoing effort. Do you have the time?

LEGAL CONTRACTS Each of your tenants, short- or long-term, should be required to sign some form of a contract that lays out unconditionally the terms of the tenancy, including payment obligations. While there are standard lease contracts available online, there is no way for the layman to know whether these ‘onesize-fits-all’ leases really offer you any protection. Even the best property manager should either advise you to hire an attorney to check the contract (lease) before you or your tenant sign it, or more likely, have an attorney at hand already familiar with the standard lease and who can double check that it provides adequate protection for you and your investment. It may also come to pass that the tenant you select will make requests to have the lease changed in one way or another – perhaps they have a pet and would like to have in writing that the pet is allowed. Changes to an existing lease should always be reviewed by an attorney, as there may be some instances where the wording used in any changes nullifies the terms of the rest of the contract.

You are, after all, providing more than a place for renters to stay, but a service as well. PROPERTY MAINTENANCE In between tenant arrivals, short- or longterm, you will need to schedule a cleaning service as well as any maintenance workers to clean and adjust and fix anything that either was broken or damaged by the last tenant, or is just starting to show signs of wear and tear. On call you will need to have a cleaner, plumber, electrician, carpenter, television/cable/satellite repairman and

gardener, to name a few. And then you will need backups for them all – what if your tenant is due to arrive in an hour and the cleaning service can’t make it until tomorrow?

TENANT RELATIONS The work described for tenant changeovers is the absolute basic necessity. You are, after all, providing more than a place for renters to stay, but a service as well. For example, if a leaky faucet is keeping the tenant awake at night, he or she will expect you to come and deal with is – immediately if not sooner. If the toilets back up, the satellite television goes out, the neighbour’s cat sneaks inside and leaves an extra surprise on the living room floor, you will get a call and be expected to handle the situation with care, concern and a bright smile on your face at all times. And no matter how much time and effort you put into selecting just the right tenant, you know that there always be a few who will complain incessantly about everything, either because that is their nature or because they are bucking for a discount on the final bill. You must have the patience to deal with it all, coming at you on a regular basis, and the ability to keep calm and even negotiate with the tenant when something truly does go wrong. More than perhaps any other skill a good property manager possesses, this is the one to value most. Even if you are prepared to deal with the legal obligations, tenant sourcing and checking, and all the work to hire cleaners and maintenance experts, ask yourself this question: how much would you pay not to receive a phone call in the middle of the night from a tenant who needs to complain that the mattress is lumpy or smells funny? In my estimation, a property manager who can deal with all of the above – and manage to smile the whole way through – is worth his or her weight in gold.

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FEATURE A P RIL — M AY 2013

A drop of clean water Water piped right into your home is a luxury. For those without, life is a daily struggle. By Hezron Ochiel

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hile the search for clean water remains elusive for millions in developing countries, where the majority of people trek long distances or pay exorbitantly huge amounts for the commodity, in Kenya’s Asembo Bay village, residents have resorted to using the seeds of Moringa oleifera, a tree plant that grows in sub-Saharan Africa, South America, the Indian Subcontinent and South-East Asia, to purify their water. According to the World Health Organisation (WHO), only 61% of people in subSaharan Africa have access to clean water, compared with 90% or more of the populations of Latin America, the Caribbean, North Africa and large parts of Asia. In addition, less than half of all people globally who lack access to drinking water live in sub-Saharan Africa. Situated on the shores of one of the world’s largest freshwater lakes – Lake Victoria, and 450 kilometers from the capital city Nairobi – Asembo Bay has grappled with water crisis for years. In this village, the situation is dire as young children skip classes to help their parents line up for water or prematurely drop out of school to vend water. ‘Over the years we have fetched our water from the lake. But recently when water hyacinth infested our lake and covered it completely, life has become unbearable for our people and livestock. We are forced to draw salty water from boreholes,’ said Joanne Anyango, 30, and mother of two.

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‘Every morning, I have to wake up at dawn to fetch clean water ahead of others. By midday, I will have made six trips. But that is barely enough for my family and livestock. Occasionally, my children would miss school just to help fetch more water for the family,’ she added. Anyango represents millions of Kenyans who drink water directly from rivers, lakes and boreholes and, in the process, exposing themselves and their children to water-borne diseases like diarrhoea and cholera.

LIFE SAVER Leaves and flowers of the Moringa oleifera plant, whose seeds can be used to purify drinking water.

‘During the dry seasons, many families go without bathing and washing. Sometimes we are forced to go for even four days without having a shower. The little available is sometimes very expensive – more than food,’ revealed Lilian Atieno, 27. Analysts believe that inadequate access to safe drinking water compromises the quality of life in many households in sub-Saharan Africa. This subsequently affects the region’s food security and long-term socio-economic development. ‘With more than three-quarters of Africa’s drinking water originating from groundwater, the quality of this water is declining due to continuous contamination by biological and potentially toxic substances,’ said Collins Asweto, a public health lecturer at Great Lakes University of Kisumu. ‘The rate of disease exposure is extremely high because of contamination at the water sources where it is collected. Normally, the containers used for collection are not thoroughly cleaned, often previously used for oil or chemicals,’ he added.

NATURAL SOLUTION It is against this backdrop that Asembo Bay villagers are not gambling with their lives anymore. The communities here, with the help of non-governmental organisation Rafiki Trust have devised a cheap method of purifying water using Moringa seeds.


FEATURE A P R I L — MAY 2013

‘[Many of] our children have died due to water-related illnesses. We sat down as a community to look for lasting solutions. It was until we were advised that the Moringa oleifera plant would solve our problems,’ said Solomon Ochieng, a Rafiki Trust pioneer. ‘We availed the seeds and encouraged our people to plant the [plant] in their farms. Three years later we started harvesting [Moringa seeds] to treat drinking water. Since then our water has remained pure and safe for drinking,’ he added. Ali Rhana, an Asian herbalist who introduced the plant in this village, believes that the plant that has been used for ages would help reduce child mortality in rural villages. ‘Moringa has scientifically been proven to be a good and reliable water purifier. In India, for instance, other than water purification, we use it as an immune booster. This would be ideal for this community where majority have compromised immune systems due to HIV/AIDS,’ he said. In rural sub-Saharan Africa, testing water for pathogens is rarely done because of the unavailability of resources to perform such methods. The country, however, has adopted techniques of eliminating pathogens by straining water through a piece of cloth. This technique, coupled with reliance on rain harvesting from rooftops, is substantially reducing waterrelated illnesses. ‘Straining water through a piece of cloth has been proven effective in eliminating pathogens, including the bacterium that causes cholera. The process is not widely used and perceived as interim solution,’ said Samwel Okeyo, a laboratory specialist.

STILL AT RISK A four-year study by the Millennium Cities Initiative (MCI), a project of the Earth Institute at Columbia University, has found that maternal and infant mortality rates in Kisumu (within Asembo) are still high.

DRY LANDS Kenya’s northern areas are characterised by arid climate and low precipitation, making freshwater hard to come by.

‘Many health facilities have piped water connections, but the infrastructure is dilapidated, and frequent water shortages have forced several facilities to rely on water vendors, boreholes and rainwater collection to meet basic patient needs,’ said the report. Currently, Kenya’s maternal mortality is 64.72 per 1,000 live births, according to the United Nations, while its infant mortality is 52 per 1000 live births. According to WHO, diarrhoeal diseases in developing countries are most commonly attributed to dirty water. Such diseases result in the deaths of 1.4 million children annually (mostly in Africa) – a figure that is more than HIV/AIDS, malaria and measles combined.

Kenya, with its limited renewable water supply, is classified as water-scarce country and faces challenges in water provision partly due to erratic weather patterns exacerbated by global warming and rapid population explosion. ‘Rural–urban migration is a major challenge in developing countries and overwhelms [their] already strained amenities. [Uncontrolled] population growth significantly provides thriving ground for slum development and thus poor living conditions,’ added Asweto. The country’s urban population growth rate of 7% is presenting utilities with a challenge to meet the demand for water services. Analysts believe that such growth, coupled with the government’s poor planning on waste management, is largely to blame. Kenya is a land of contradiction. Affluent people in its cities enjoy clean water from the tap in their houses, while in the slums, people endure long lines just to get enough for their families’ daily needs. In the country’s arid northern region, millions of residents have never seen piped water. For them, lack of water for domestic and livestock use is an all-toofamiliar phenomenon that they have to endure every season.

73


Australia The Sydney Opera House, one of Australia’s most famous landmarks.

Darwin

COUNTRY INFORMATION OFFICIAL NAME

Commonwealth of Australia

CAPITAL CITY

Canberra

CURRENCY

Australian dollar (A$1 = US$1.04)

LANGUAGE

English (de facto official)

TOTAL AREA

7,692,024 sq km (6th largest in the world)

POPULATION

22,015,576 (July 2012 est.)

REGION

Australasia

TIME ZONES

UTC +8, +9:30 and +10

DIALLING CODE

+61

GDP (Nominal; 2012 IMF estimate)

US$1.542 trillion (12th largest in the world)

GDP PER CAPITA (Nominal; 2010–2011 IMF estimate)

US$66,371 (5th highest in the world)

HUMAN DEVELOPMENT INDEX

0.938 (Very high)

PROPERTY BASICS AVERAGE PRICE

US$8,717 psm (usually a 120-sqm apartment)

RENTAL YIELD

4.94%

RENT PER MONTH

US$3,592 (usually a 120-sqm apartment)

CAPITAL GAINS TAX

45%

SOURCE GLOBAL PROPERTY GUIDE

WHERE TO BUY Australia’s property market is as varied as its colourful landscape. However, before making any purchase, buyers should decide the reason for the purchase, as it will help them decide which area (city centres, residential suburbs, or touristy sites) and what type of properties (apartments, terraced houses, villas, bungalows, etc.) to buy. INVESTMENT Residential suburbs, especially those within 10 kilometres of cities’ CBD and have good transport network, are the places to go. According to Matthew Bell of Australian Property Monitors, the suburbs of Hawthorn (Brisbane), Mentone (Melbourne), Mona Vale (Sydney), Halls Head (Perth) and Thebarton (Adelaide) offer buyers good investment potential because of their proximity to city centres and plenty of commuting options. SECOND HOME Those planning to send their kids to Australia’s universities can opt for places close to these institutions, such as Central Canberra (Australian National University), Camperdown, Newtown and Darlington (University of Sydney), Parkville and Carlton (University of Melbourne), and St Lucia and Indooroopilly (University of Queensland). VACATION HOME Those who plan to purchase purely for vacation purposes will be delighted to know the wide range of properties available. The cities of Gold Coast, Townsville and Sunshine Coast are top choices in Queensland; the Sydney suburbs of Manly and Mosman; and suburbs within picturesque Mornington Peninsula south of Melbourne. For a wine connoisseur, there’s Barossa Valley north-east of Adelaide and Swan Valley north-east of Perth.

74

BUYING PROCESS ORGANISE A TEAM OF PROFESSIONALS The buyer must find a solicitor (licensed to deal within the state where the property is located); a good mortgage broker with experience in helping nonresidents; and, though not necessary, an accountant to help structure the financials and save on tax.

AUSTRALIA Perth

Adelaide

APPLY FOR A LOAN Mortgage must be pre-approved before looking for a property, so the buyer will know if he or she is eligible for a loan and how much can be borrowed. SEEK FIRB APPROVAL All applications from foreign citizens are put before the Foreign Investment Review Board (FIRB), which takes 30 days. An approval can only be granted on a specifically nominated property. Contracts therefore with foreign citizens must contain a clause that going ahead with the purchase is conditional upon getting FIRB approval.

FIND A PROPERTY Now is the time to visit Australia and search for a property. The other option is to use a buyer’s agent. NEGOTIATE THE PURCHASE PRICE General rule: Australian properties usually sell for up to 10% less than their list price. If the buyer is using a buyer’s agent, then he or she will help negotiate the price. OBTAIN FORMAL MORTGAGE APPROVAL When a property has been chosen, the contract of sale is then forwarded to the mortgage broker or bank to proceed with the formal approval. EXCHANGE CONTRACTS AND PAY DEPOSIT The contract can be exchanged after the loan has been formally approved and the solicitor gives a go ahead. A deposit of 10% is needed, although the amount is negotiable. Make sure the contract has the clause ‘subject to FIRB approval’ and 30 days must be allowed for an FIRB decision. SETTLE This occurs when the property actually changes hands and the loan is advanced. This will be handled by the solicitor in conjunction with the bank and mortgage broker.

Brisbane

Sydney

CANBERRA Melbourne Hobart

GETTING IN VISA REQUIREMENTS Citizens of Brunei, Canada, Hong Kong, Japan, Malaysia, Singapore, South Korea, Taiwan and the USA are eligible to enter Australia by applying for an Electronic Travel Authority (ETA; subclasses 976, 977 and 956). This can be applied for over the Internet, through travel agents and through airlines. Passport holders of the 27 member-states of the EU, the European Free Trade Association states, and the four European microstates are eligible for the eVisitor visa, which is free of charge. Citizens of Argentina, Bahrain, Brazil, Chile, Croatia, Kuwait, Maldives, Oman, Qatar, Saudi Arabia, Turkey and the United Arab Emirates can apply for an Electronic Tourist Visa (e676). Citizens of countries not mentioned above can apply for tourist visa (subclass 676), which will allow them to visit Australia for holiday or recreation or to visit family and friends. For more information on visa application, visit www.immi.gov.au/visitors/. AIRPORTS AND AIRLINES Air travel is virtually the only way of getting into Australia. Its flag carrier Qantas (www.qantas.com.au) flies from Sydney, Melbourne, Brisbane, Adelaide and Perth to 21 cities around the world, with the most flights to Hong Kong, Singapore, Bangkok, Kuala Lumpur, Jakarta, Manila, Tokyo and Osaka. Melbourne

For more information on flights to Australia’s major cities, visit the following sites: SYDNEY www.sydneyairport.com MELBOURNE melbourneairport.com.au BRISBANE www.bne.com.au PERTH www.perthairport.com.au ADELAIDE www.adelaideairport.com.au GOLD COAST goldcoastairport.com.au CAIRNS www.cairnsairport.com South Australia’s Barossa Valley

For more detailed guides, visit www.propertylife.asia/countryguides


Brazil The statue of Christ the Redeemer overlooking Rio de Janeiro.

Venezuela

COUNTRY INFORMATION

Colombia Ecuador

OFFICIAL NAME

Federative Republic of Brazil

CAPITAL CITY

Brasília

CURRENCY

Real (R$1 = US$0.50)

LANGUAGE

Portuguese

TOTAL AREA

8,515,767 sq km (5th largest in the world)

POPULATION

193,946,886 (July 2012 est.)

REGION

South America

TIME ZONES

UTC -2 TO -4

DIALLING CODE

+55

GDP

US$2.425 trillion

GDP PER CAPITA

(Nominal; 2010–2011 IMF estimate)

US$12,789

HUMAN DEVELOPMENT INDEX

0.730 (high)

(Nominal; 2012 IMF estimate)

Guyana French Guiana Suriname

BRAZIL

Peru

Bolivia

BRASÍLIA Paraguay

Chile

Rio de Janeiro São Paulo

Uruguay

(7th largest in the world)

Argentina

tax registration number will enable you to open a bank account and apply for utilities. GET HELP Although straightforward, especially after obtaining a CPF number, it is crucial to seek the advice of a good lawyer, especially if buying a resale home, and a translator. OPEN A BANK ACCOUNT After obtaining a CPF number, open a bank account, as the purchase funds must be visibly traceable from the buyer’s bank account into the vendor’s. In addition, all monetary transactions will need to be registered as a foreign investment with a bank of Brazil. SETTLE A deposit of around 10% is required after your offer is accepted (although this figure can range from 5% to 20%). The balance is paid on completion, and the entire process is overseen by a notary.

FINANCING Most foreign buyers pay in cash as it is quite difficult to get financing in Brazil. But the domestic mortgage market in Brazil is undergoing reform.

PROPERTY BASICS

SOURCE BUYASSOCIATION.CO.UK

AVERAGE PRICE

US$3,836 psm (usually a 120-sqm apartment)

RENTAL YIELD

5.71%

RENT PER MONTH

US$2,191

CAPITAL GAINS TAX

15%

GETTING IN

(usually a 120-sqm apartment in premier city centres)

SOURCE GLOBAL PROPERTY GUIDE

WHERE TO BUY Although not spared from the effects of the global downturn, Brazil’s property market performed remarkably well since 2009. Many observers say that Brazil’s housing market is extraordinarily robust and is an attractive buyers’ market. Prices are also expected to continually rise in anticipation with the next year’s FIFA World Cup, the Rio Games in 2016, not to mention the growing tourism and petroleum industries. In addition, infrastructure across the country is being improved.

beauty that made rival Rio de Janeiro famous, it boasts interesting cultural and architectural attractions. RIO DE JANEIRO Cidade maravilhosa (marvelous city) is as exhilarating as its annual Rio Carnival. But this does not mean that Rio is all about the party. Brazil’s former capital has the second largest GDP among its cities, second only to São Paulo, which roughly US$201 billion in 2008, and it is also the country’s second largest industrial hub. Rio de Janeiro’s government is embarking on a wide-scale revitalisation to reduce its chronic inequalities and re-energise its tourism industry, and in the process regain its commercial standing. Its historical downtown area is undergoing a wide-scale waterfront revitalisation project called Porto Maravilha, and the city’s iconic Maracaña Stadium is being renovated for the World Cup and the Olympic Games.

São Paulo

Rio de Janeiro’s Carnival

BUYING PROCESS SÃO PAULO Brazil’s largest metropolis is also the largest in the Southern Hemisphere and the second largest in the Americas, and exerts strong regional influence in country’s commerce, finance, arts and entertainment scene. Although it lacks the natural

Brazil is one of the few emerging markets that allow foreign buyers to own both land and property in their own names on a 100% freehold basis. However, before one can do so, a CPF (Cadastro das Pessoas Físicas) number must be obtained, which can be acquired via Brazilian embassies across the world. Once issued, this

VISA REQUIREMENTS Citizens of Argentina, Bolivia, Chile, Colombia, Ecuador, Paraguay, Peru, Uruguay and Venezuela do not need a passport when visiting Brazil for tourism or business (the trip does not exceed 90 days). An identity document is accepted. In addition, citizens of 53 other countries are not required to secure an entry visa when visiting Brazil for tourism or business (e.g., most EU member-countries, Thailand, the Philippines, and Hong Kong). For a complete list of these countries, go to brazil.visahq.com. Foreigners who wish to live and work in Brazil are required to apply for a temporary residence or employment visa, which can be secured if one has received a job offer from a Brazilian company or a foreign company operating in the country. The company is required to apply to the Immigration Division of the Ministry of Labor on the worker’s behalf. Further, a resident investor status may be granted to foreign nationals wishing to invest a minimum of US$50,000 in a Brazilian business. A good working knowledge of Portuguese is required. Also, retirees aged over 50 can apply for a permanent visa if they will be transferring at least US$2,000 to Brazil every month. This can be extended to up to two dependents, for an additional of US$1,000 per dependent per month. AIRPORTS AND AIRLINES Most international flights to Brazil go to Guarulhos International Airport in São Paulo or Galeão International Airport in Rio De Janeiro. Belo Horizonte is the main international airport outside these two cities. Several other international flights also go to Brasília, Recife, Natal and Fortaleza. TAM Airlines is Brazil’s largest, which flies to over 60 destinations in Brazil, the rest of South America, Mexico, the USA, Milan, Frankfurt, London, and Paris. It also maintains code-share agreements for international destinations with Star Alliance partners, Aeroméxico, and LAN Airlines. For more detailed guides, visit www.propertylife.asia/countryguides

75


Temples at the banks of the Chao Phraya River in Bangkok.

Thailand

AND CHECK A final check at the property is required before the seller and buyer meet up to sign all the documentation. This is usually done at the real estate office or at a lawyer’s office. If the purchaser is obtaining a mortgage, then there will also be a requirement to provide documentation from the bank as the land title will be put in the bank’s name.

Pattaya

COUNTRY INFORMATION OFFICIAL NAME

Kingdom of Thailand

CAPITAL CITY

Bangkok

CURRENCY

Baht (US$1 = THB29.36)

LANGUAGE

Thai

TOTAL AREA

513,120 sq km

POPULATION

67,091,089 (July 2012 est.)

REGION

South-East Asia

TIME ZONES

UTC +7

DIALLING CODE

+66

GDP

US$376.9 billion

GDP PER CAPITA

US$5,395

(Nominal; 2012 IMF estimate) (Nominal; 2010–2011 IMF estimate)

GETTING IN

HUMAN DEVELOPMENT INDEX 0.682 (medium)

Chiang Mai

BUYING PROCESS

LAOS

Chiang Mai

THAILAND BANGKOK VIETNAM

Pattaya

CAMBODIA

MALAYSIA

PROPERTY BASICS AVERAGE PRICE

US$ 3,300 psm

RENTAL YIELD

5.55–10.15%

RENT PER MONTH

US$2,413

CAPITAL GAINS TAX

37%

(usually a 120-sqm apartment in premier city centres)

(usually a 120-sqm apartment in premier city centres)

SOURCE GLOBAL PROPERTY GUIDE

WHERE TO BUY Foreigners looking to get a piece of Thai property tend to choose either the bustling capital of Bangkok, the island-resorts in the south (Phuket and Ko Samui), resort cities along the coast (Pattaya and Hua Hin), or the idyllic Chiang Mai in the north.

76

Thai laws do not allow land to be sold to foreign buyers as freehold, although the property sitting on it can be. As the land will only be sold to foreign investors as leasehold property, developers will usually lease the land to the owner of the property for 30 years, which can be extended for a further 30-year period. Contracts to this effect will usually also state that if the current Thai laws regarding foreign investors changes, then the option will be there to buy the lease. Many expats and other foreign investors buy condominiums in Thailand as the process to do so is very simple. Thai law allows foreign investors to own the property completely (freehold) although most buildings are only allowed to have 49% of its condos owned by non-Thai citizens. SEEK HELP Negotiations in property purchase are usually handled by an estate agent. He or she will look into all the items included in the sale and any issues relating to leaseholds. The buyer should also hire a law firm to carry out a comprehensive title search and land survey. This is to ensure that the person selling has the title to both the property and the land on which it sits. If you are purchasing a condo, then the title report should tell you if there are any outstanding fees on the property. INSPECT An engineer’s inspection is recommended to ensure that the property is structurally sound and that the electrical and plumbing systems are in good working order. This inspection can help with the negotiations as if there are problems the seller can be asked to correct them before the sale is completed. DO THE PAPERWORK The contract when you are purchasing a property will be drawn up either by the agent or the seller or even the purchaser, and this is signed by all parties once an agreement to purchase has been reached. The deposit is then paid. There is no law that states that the documentation needs to be notarised, but any copies of the documentation need to be signed to show that they are true copies of the original. Anyone who is named on the documentation needs to sign it and it should show everything that is included with the sale.

VISA REQUIREMENTS Thailand grants visa on arrival for citizens of 49 countries, including ASEAN members, Australia, the USA, the UK, and Canada, among others, for stay of up to 30 days. In addition, citizens of China, India, Saudi Arabia, and Taiwan, among others, are granted visa on arrival for stay of 15 days for THB1,000. For a complete list of countries, visit thailand.visahq. com/. All travellers will need a passport valid for at least 90 days and that has adequate unused visa pages. AIRPORTS AND AIRLINES Thailand’s main point of entry is Bangkok’s Suvarnabhumi Airport (www. suvarnabhumiairport.com). Handling 47.9 million passengers in 2011, the airport is the sixth busiest in Asia. It is the hub of the country’s flag carrier Thai Airways International, where it has regular scheduled flights to 75 destinations in 35 countries. Other carriers that operate from the airport are Bangkok Airways and Orient Thai Airlines. Numerous airlines fly from their respective hubs to the airport, including Aeroflot (Moscow), Air China (Beijing), Air France (Paris), British Airways (London), Cathay Pacific (Hong Kong), China Airlines (Taipei), Emirates (Dubai), Garuda Indonesia (Jakarta), and KLM (Amsterdam), among others. Bangkok’s older airport, Don Mueang International, was reopened in 2007 after a major facelift. The airport now serves a number of low-cost carriers, including AirAsia and its subsidiaries Thai AirAsia and Indonesia AirAsia, which have regular scheduled flights to Kuala Lumpur, Jakarta, Denpasar (Bali), Bangalore, Chennai, Ho Chi Minh, Hong Kong, and Macau, among others. Thailand’s second busiest airport is Phuket International, which serves the tourist island of Phuket. Numerous airlines have regular scheduled flights from their respective hubs, including Aeroflot (Moscow), Air China (Beijing), China Airlines (Taipei), China Eastern (Shanghai), China Southern (Guangzhou), Dragonair (Hong Kong, and SilkAir (Singapore), among others. Bangkok Suvarnabhumi Airport

For more detailed guides, visit www.propertylife.asia/countryguides


United Kingdom The City of London, the UK's financial centre

WHERE TO BUY

COUNTRY INFORMATION OFFICIAL NAME

United Kingdom of Great Britain and Northern Ireland

CAPITAL CITY

London

CURRENCY

Pound sterling (£1 = US$1.51)

LANGUAGE

English (official)

TOTAL AREA

243,610 sq km

POPULATION

64,047,162

REGION

Western Europe

TIME ZONES

UTC +0

DIALLING CODE

+44

GDP

US$2.434 trillion (6th largest in the world)

GDP PER CAPITA (Nominal; 2010–2011 IMF estimate)

US$38,811 (22nd highest in the world)

HUMAN DEVELOPMENT INDEX

0.875 (very high)

(Nominal; 2012 IMF estimate)

There are several cities in the UK that serve as financial hubs and business centres, and often include the best options for property investors, especially those with an aim to letting out the property for an income. The most obvious is London, although Edinburgh is also an excellent market, as are Bristol and Cambridge. Some cities are not for the faint of heart when it comes to investment, such as Liverpool, Newcastle and Glasgow, although deals are to be found for an investor who can afford to park their money and wait for returns. Countryside options are also popular investments in the UK, with ideal locations found all over the south and southwest, including Wales, as well as the Midlands, Yorkshire, and islands such as the Isle of Wight.

Glasgow’s Clyde Arc

Oxford Edinburgh Northern Ireland

UNITED KINGDOM

LONDON

PROPERTY BASICS AVERAGE PRICE

US$25,445 psm

RENTAL YIELD

3.43%

AVERAGE RENT PER MONTH

US$8,737

CAPITAL GAINS TAX

28%

(usually a 120-sqm apartment in premier city centre)

(usually a 120-sqm apartment in premier city centre)

SOURCE GLOBAL PROPERTY GUIDE

AVERAGE PROPERTY PRICE SOURCE RIGHTMOVE.CO.UK

US$305,645

BUYING PROCESS Long considered a safe haven for prime-property investment, the UK’s real estate market is open to foreign investors. GET APPROVAL First, secure approval from a lending institution for financing (if paying cash, this is not necessary, but it will still be necessary to arrange for proof of ability to pay).

ORGANISE A TEAM OF PROFESSIONALS After finding an estate agent and searching for the property, hire a solicitor (attorney/lawyer) to draw up the paperwork for making an offer to the seller. During or after the negotiations, hire a chartered surveyor/ valuer to assess the property. SIGN AND SETTLE The valuation and survey documents will be required to finalise the mortgage, if used, and for the final contracts and negotiations. Your solicitor will draw up the final contracts and once signed, it’s time to move in.

GETTING IN VISA REQUIREMENTS For those who require a visa to visit the UK, there are tourist, family, study, sports, entertainer and business visas available, as well as transit visas. Citizens of the EU and Switzerland will find visiting and applying for residency easier than other nationalities (but official permission may still be required). Additional information for specific countries and reasons for visiting can be found at: ukba.homeoffice. gov.uk AIRPORTS AND AIRLINES All forms of transportation in the UK are excellent, ranging from paved roads, car hire companies, taxi services, bus and rail terminals, air travel and ferry service to most of the thousands of surrounding islands. Air travel especially is convenient in the UK with the many smaller, independent airports operating through the country and the islands. There are 471 airports and airfields scattered across the entire UK, 334 of which have paved runways. The country’s busiest – London Heathrow Airport (www. heathrowairport.com) – is also world’s busiest in terms of traffic volume of international passengers (more than 64.6 million in 2011). London’s second major airport is Gatwick, which served more than 34 million passengers in 2012. Manchester Airport, meanwhile, is the UK’s third busiest, serving more than 18 million passengers every year. Other major airports include London Stansted in Essex, Birmingham, Cardiff, Edinburgh, and Belfast. The UK’s largest airline, British Airways (www. britishairways.com), has a fleet size of 256 aircrafts and flies to 169 destinations worldwide. Other important airlines include Virgin Atlantic, BMI, easyJet, Jet2, and Thomson Airways, among others. LAND The UK’s radial road network is composed of 46,904 km of main roads, 3,497 km of motorways, and 344,000 km of paved roads. The National Rail network of 16,116 km route in Great Britain and 303 route km in Northern Ireland carries over 18,000 passengers and 1,000 freight trains daily. There are also urban or metro rail networks in London, Manchester, Birmingham, Edinburgh, Glasgow, Cardiff, Belfast, Leeds, and Liverpool. For more detailed guides, visit www.propertylife.asia/countryguides

77


United States of America New York City’s Brooklyn Bridge

COUNTRY INFORMATION

Alaska

OFFICIAL NAME

United States of America

CAPITAL CITY

Washington, DC

CURRENCY

US dollar

LANGUAGE

English

TOTAL AREA

New York WASHINGTON DC

(3rd or 4th largest in the world)

313,847,465 (July 2012 est.)

REGION

North America

TIME ZONES

UTC –5 to –10

DIALLING CODE

+1

GDP

US$15.6097 trillion (world’s largest)

GDP PER CAPITA (Nominal; 2010–2011 IMF estimate)

US$48,328 (14th highest in the world)

HUMAN DEVELOPMENT INDEX

0.937 (very high)

Hawaii

PROPERTY BASICS AVERAGE PRICE

US$13,377 psm in premier city centres

RENTAL YIELD

4.7%

RENT PER MONTH

US$6,286

CAPITAL GAINS TAX

5%

BUYING PROCESS America represents one of the safest and most transparent property markets in the world. All properties for sale are listed, by law, in a common database (MLS) that anyone, including all real estate agents and the public at large, can access at any time. ARRANGE FINANCING The first step is to either get pre-approval for a mortgage or loan, or to assemble any paperwork that shows you have the purchasing power to invest in property. No real estate agent or property seller will give an investor the time of day without proof that they have to means to go through with a purchase.

US$180,800

SOURCE YCHARTS NYC

WHERE TO BUY The most popular destinations for foreigners buying property in America are New York (Manhattan and the Hamptons on Long Island), Miami and California, especially Los Angeles and San Francisco. However, Washington D.C. is another popular location, as is Arizona (for the desert climate) and Colorado (for the skiing). Additionally, the cities of Chicago and Atlanta have stable property markets with strong rental yields. The location of course depends entirely on what you want from your investment and whether you intend on renting it out or living in it yourself. There are many fantastic deals to be found in the ‘heartland’ of America, from Ohio to Wyoming, for every lifestyle imaginable.

OFFER Make an offer that is contingent upon the results of an inspection and/or formal survey, and then hire a licensed professional to carry out the inspection or survey. If there is anything wrong with the property, you can either withdraw the offer or renegotiate the terms. SEARCH At this point, a title search is performed to ensure that the property is truly free and clear to be sold. Contact your mortgage lender if applicable, as they will require copies or originals of the survey/inspection reports and title search be put in the bank’s name. CLOSE Your real estate agent will arrange a meeting called the closing which will include the sellers, a bank representative, a public notary, you the buyer and your attorney if desired. All contracts are signed, deposit money is paid to the seller, and the remainder of the balance owed is also paid.

San Francisco

GETTING IN VISA REQUIREMENTS The need for a visa depends on your citizenship and reason for your visit to the USA. There are visitor, study, work and immigration visa available. In some cases, no visa is required for short-term visits for holidays or pleasure. In other cases, a visa application is a simple form to send to the US Consular and a reply will be received within a week or two. However, there are some cases in which a visa application may take several months to approve and may even require an interview.

78

It is best to consult the nearest US Embassy or visit travel.state.gov for further information specific to your needs. For more information on visa application, visit www. immi.gov.au/visitors/. AIRPORTS AND AIRLINES Deregulated since 1978, the US civil airline industry is entirely privately owned, though most major airports are publicly owned. The world’s four largest airlines in terms of passengers carried are US-based: Delta Airlines, United Airlines, Southwest Airlines and American Airlines. Chicago

GET A LAWYER After selecting a property, contact a real estate attorney. Although this is not required, and real estate agents in America are certified and able to provide legal contracts, it is nevertheless always recommended that you have an attorney at least review all contracts you sign.

SOURCE GLOBAL PROPERTY GUIDE

AVERAGE PROPERTY PRICE

Chicago

Los Angeles

9,826,675 sq km

POPULATION

(Nominal; 2012 IMF estimate)

UNITED STATES OF AMERICA

In addition, of the world’s 30 busiest passenger airports, 16 are in the USA, including the busiest, HartsfieldJackson Atlanta International Airport. Each major city and several mid-to-large cities for each state in America will have either an international or national airport. The following are the USA’s major international gateways: JFK-NEW YORK www.panynj.gov/airports/jfk.html MIAMI INTERNATIONAL AIRPORT www.iflymia.com LOS ANGELES INTERNATIONAL AIRPORT www.lawa.org NEWARK LIBERTY INTERNATIONAL AIRPORT (NEW YORK)

www.panynj.gov/airports/newark-liberty

O’HAre InternAtIOnAl AIrpOrt (CHICAgO) www. flychicago.com/ohare/en/home/Pages/default.aspx LAND The USA is the world’s second largest automobile market and has the highest rate of percapita vehicle ownership in the world (765 vehicles per 1,000 Americans). It has 13 million roads, including the world’s longest highway systems. While its railway system is extensive, mass transit accounts for only 9% of total US work trips. However, ridership on Amtrak, the national intercity passenger rail system, grew by almost 37% between 2000 and 2010.

For more detailed guides, visit www.propertylife.asia/countryguides


Singapore Downtown Singapore’s Marina Bay

COUNTRY INFORMATION Republic of Singapore

OFFICIAL NAME CAPITAL CITY CURRENCY

Singapore dollar (S$1 = US$0.80)

LANGUAGES

English, Malay, Mandarin and Tamil

TOTAL AREA

710 sq km

POPULATION

5,353,494 (July 2012 est.)

REGION

South-East Asia

TIME ZONES

UTC +8

DIALLING CODE

+65

GDP

US$267.9 billion

GDP PER CAPITA (Nominal; 2010–2011 IMF estimate)

US$49,271 (12th highest in the world)

HUMAN DEVELOPMENT INDEX

0.895 (very high)

(Nominal; 2012 IMF estimate)

SINGAPORE

PROPERTY BASICS AVERAGE PRICE

US$16,350 psm

RENTAL YIELD

2.95%

RENT PER MONTH

US$4,817

CAPITAL GAINS TAX

N/A

(usually a 120-sqm apartment in premier city centres)

BUYING PROCESS There are two types of properties foreigners can purchase in Singapore: non-restricted and restricted. Restricted properties are those that require approval from the government, which may include land, landed properties and Housing Development Board flats (HDB). The Residential Property Act, however, regulates all foreign ownership in Singapore. It allows foreigners to purchase apartments in non-condominium developments without the need of government approval. To obtain approval to purchase land or landed properties, a form is available for download at the Singapore Land Authority website (www.sla.gov.sg). The following are the usual steps in buying properties in Singapore. 1 In order to protect your interests, engage the services of a professional estate agent or specialty attorney. 2 Option to purchase agreement requires 1% of the purchase price and is usually prepared by the seller’s agent or attorney. This agreement allows 14 days consideration before proceeding with the purchase. 3 Offer to purchase agreement is prepared by the buyer’s agent or attorney and is an alternative to the option to purchase agreement. 4 Inspections are stated in the option to purchase agreement, which allows the buyer to have a professional inspection of the property before completing the sale. 5 Close of sale is under the jurisdiction of the attorneys and usually takes 8–10 weeks to complete.

GETTING IN VISA REQUIREMENTS All travelers need a passport valid for at least 6 months before entering Singapore. Passports must have blank visa pages. It is also advisable to confirm whether a transit visa is required for any connections. Nationals of countries belonging to either Assessment Level I or II categories specified by the Singapore government will require a visa. These countries include Afghanistan, Algeria, Bangladesh, Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan, Egypt, Georgia, India, Iran, Iraq, Jordan, Lebanon, Libya, Morocco, Myanmar, Nigeria, People’s Republic of China, Pakistan, Saudi Arabia, Somalia, Sudan, Syria, Tunisia, Yemen and Palestine. Visit www.mfa.org.sg for more details. AIRPORTS AND AIRLINES Singapore Changi Airport (www.changiairport.com), widely regarded as one the world’s best, is Singapore’s main international gateway. It serves more than 100 airlines, over 6,000 flights a week to more than 220 destinations. The airport has won 390 awards since 1981, including 23 ‘Best’ awards in 2011. The city-state’s flag carrier is government-owned Singapore Airlines, which has a strong presence in South-East Asia, East Asia, South Asia and the ‘Kangaroo Route’ markets and flies to about 62 destinations around the world. In 2012, the airline carried around 18 million passengers. Terminal 3 of Singapore Changi Airport

Marina Bay Sands

(usually a 120-sqm apartment in premier city centres)

SOURCE GLOBAL PROPERTY GUIDE

WHERE TO BUY Driven by an efficient legal system, impeccable infrastructure and strong and stable economy, Singapore’s property market is among the world’s priciest. According to Knight Frank, the value of real estate in Singapore surged 50.5% from the last quarter of 2006 to the same period in 2011. Quite expectedly, the city-state’s Central Region, which includes the urban planning areas of Downtown Core, Marina East, Marina South, Newton, Orchard, Outram, River Valley, Rochor, and Singapore River, has some of the island’s priciest real estate. These areas, however, are at the very centre (or very close to) of Singapore’s cultural, economic, and political activities. Singapore’s other regions (and their largest towns): East (Bedok), North (Woodlands), North-east (Hougang) and West (Jurong West). It is the Urban Redevelopment Authority’s policy to create partially self-sufficient towns within each of these regions to reduce congestion and traffic strain in the Central Area. As a result, these regions have their own commercial areas that offer facilities and amenities (such as hospitals, schools and shopping areas) comparable to those in the Central Area.

LAND Transportation in Singapore is extremely easy. The roads are modern, paved and well posted. Buses and taxis abound and take you anywhere on the island. The city-state’s highly efficient Mass Rapid Transit (MRT) System has a network of 102 stations with almost 150 kilometres of line on standard gauge.

Merlion Park

MRT

For more detailed guides, visit www.propertylife.asia/countryguides

79


Indonesia Borobudur Temple in Central Java

BRUNEI

MALAYSIA

COUNTRY INFORMATION

MALAYSIA

SINGAPORE

OFFICIAL NAME

Republic of Indonesia

CAPITAL CITY

Jakarta

CURRENCY

Rupiah (US$1 = IDR9,712)

LANGUAGE

Bahasa Indonesia

TOTAL AREA

1,904,569 sq km

POPULATION

248,645,008 (July 2012 est.)

REGION

South-East Asia

TIME ZONES

UTC +8 to +9

DIALLING CODE

+62

GDP

US$894.854 billion

GDP PER CAPITA (Nominal; 2010–2011 IMF estimate)

US$3,512

HUMAN DEVELOPMENT INDEX

0.617 (medium)

(Nominal; 2012 IMF estimate)

INDONESIA

PAPUA NEW GUINEA

JAKARTA

Bali

PROPERTY BASICS AVERAGE PRICE

US$2,099 psm

RENTAL YIELD

9.31%

RENT PER MONTH

US$1,955

CAPITAL GAINS TAX

20%

(usually a 120-sqm apartment in premier city centres)

Bali

(usually a 120-sqm apartment in premier city centres)

SOURCE GLOBAL PROPERTY GUIDE

BUYING PROCESS

WHERE TO BUY In Knight Frank’s The Wealth Report 2013, Indonesia’s prime residential markets were the biggest performers in 2012, with Jakarta leading the pack with values surging 38%, followed by Bali at 20%. According to Knight Frank, Jakarta and Bali benefited from the continued strong GDP growth (6%). It added that increased access for non-resident buyers could help sustain the trend though 2013. Jakarta

80

Can foreigners buy property in Indonesia? The answer to this is ‘it depends on the title of the land on which the property sits’. There are two fundamental rulings foreign property ownership in Indonesia: the Basic Agrarian Law of 1960 (UU Pokok Agraria Tahun 1960) and Government Decree #41 of 1996. The Basic Agrarian Law is Indonesia’s main law concerning land ownership and includes a section about ownership by foreign individuals and institutions. It says that a foreigner who resides in Indonesia is allowed to own a residential property built on land with a ‘Hak Pakai’ (right of use) title. Further, Government Decree #41 of 1996 stipulates that the maximum period for ‘Hak Pakai’ ownership is 25 years, which can be extended for another 20 years. On this basis, a foreign individual is legally allowed to buy, for example, a house that is built on a single parcel of land, but they must convert the title of the property to a ‘Hak Pakai’ title to comply with the laws. Another option for foreigners is to use a local name-holder for the property, with whom the foreign buyer enters into contracts. If using a local nominee, the following documents should be signed with your nominee prior to the purchase: 1 Mortgage Agreement. Cost: 1% mortgage value for Notary; 1% of total mortgage value for BPN land affairs office 2 Power of Attorney. This grants exclusive rights to mortgager to release the mortgage 3 Financial Loan Agreement 4 Power of Attorney (for all rights to the land)

5 Statement Letter 6 Statement of Indemnity (for nominee). 7 Power of Attorney for IMB 8 Statement Letter 9 Lease Agreement All transactions of land rights must be via deeds executed before a land deed official at the local office of the Pejabat Pembuat Akta Tanah (PPAT), where the land is located, and must be registered in the regional office of the National Land Agency. Although there is no regulation regarding language, it is recommended having contracts and agreements drawn up and executed in Bahasa Indonesia (or two languages) to prevent potential arguments that the local partner did not fully understand the content.

GETTING IN VISA REQUIREMENTS No visa is required for shortterm business or holiday visits for citizens of Brunei Darussalam, Chile, Hong Kong SAR, Macau SAR, Malaysia, Morocco, the Philippines, Peru, Singapore, Thailand and Vietnam. Indonesia also offers Visa on Arrival (VOA) with a maximum stay of 30 days (although this can be extended for an additional 30 days). Requirements for the VOA include a valid passport with at least 6 months validity, round-trip airplane ticket and fees of US$25. Visit the website of the Indonesian visa authority for a complete list of countries eligile for VOA (www. embassyofindonesia.org/consular/visitvisa.htm). AIRPORTS AND AIRLINES Air transportation in Indonesia serves as a critical means of connecting the thousands of islands throughout the archipelago. Jakarta’s Soekarno–Hatta International Airport (jakartaairportonline.com) serves as the country’s main international gateway. Flag carrier Garuda Indonesia (www.garuda-indonesia.com) has regular scheduled flights from Jakarta to numerous cities across the country and around the world, including Amsterdam, Bangkok, Beijing, Guangzhou, Hong Kong, Jeddah, Kuala Lumpur, Melbourne, Perth, Seoul, ShanghaiPudong, Singapore, Sydney, Taipei, and Tokyo-Narita. Indonesia’s second busiest airport is Bali’s Ngurah Rai International in Denpasar. There are also regional airports in Surabaya, Yogyakarta, Bandung, Banda Aceh, and Manado. For more detailed guides, visit www.propertylife.asia/countryguides


Malaysia Petronas Towers in Kuala Lumpur

The programme’s basic rule is that foreigners are not allowed to buy properties costing less than MYR500,000 (US$160,102). This is to prevent inflationary pressures in the lower end of the property market. Visit www.mm2h. gov.my for more details. Areas popular to foreign buyers are Kuala Lumpur, Johor Bahru and Penang. Other cities, such as Ipoh and Kota Kinabalu, and resort islands, such as Langkawi, are increasingly attractive as well.

COUNTRY INFORMATION OFFICIAL NAME

Federation of Malaysia

CAPITAL CITY

Kuala Lumpur

CURRENCY

Ringgit (US$1 = MYR3.12)

LANGUAGES

Bahasa Malaysia

TOTAL AREA

329,847 sq km

POPULATION

29,179,952 (July 2012 est.)

REGION

South-East Asia

TIME ZONES

UTC +8

DIALLING CODE

+60

GDP (Nominal; 2012 IMF estimate)

US$307.18 billion

GDP PER CAPITA (Nominal; 2010–2011 IMF estimate)

US$10,085

HUMAN DEVELOPMENT INDEX

0.769 ( high)

Mount Kinabalu

GETTING IN VISA REQUIREMENTS Malaysia currently offers visa on arrival to citizens of 66 countries for stay of up to 90 days. In addition, citizens of ASEAN member countries (Cambodia, Indonesia, the Philippines, Singapore, Thailand, and Vietnam) plus 83 others can enter the country visa-free for stays of up to 30 days. For a complete list of these countries, visit www.kln.gov.my/ web/guest/requirement-for-foreigner. AIRLINES AND AIRPORTS Kuala Lumpur International Airport is Malaysia’s major point of entry. Currently handling 35 million passengers a year, the airport is the world’s 14th busiest in terms of international passenger traffic and Asia’s fifth busiest international airport. It is the hub of flag carrier Malaysia Airlines, which has regular scheduled flights to 87 destinations around the world, as well as the popular low-cost carrier AirAsia.

PROPERTY BASICS AVERAGE PRICE

US$2,182 psm

RENTAL YIELD

7– 8.7%

RENT PER MONTH

US$1,356

CAPITAL GAINS TAX

N/A

(usually a 120-sqm apartment in premier city centres)

(usually a 120-sqm apartment in premier city centres)

SOURCE GLOBAL PROPERTY GUIDE

MALAYSIA

BRUNEI

Kuala Lumpur

MALAYSIA

SINGAPORE

Kuala Lumpur International Airport

INDONESIA

WHERE TO BUY Outside Singapore, Malaysia is South-East Asia’s most transparent real estate market according to Jones Lang LaSalle. As a result, buying a property here is straightforward and legally sound. Foreigners are allowed to purchase leasehold and freehold properties. However, it still pays to understand how the country’s market works and what is needed. Foreigners are also only allowed to buy two houses at a cost no less than MYR150,000 (US$48,030). In some parts of the country, it is only possible for local people and other indigenous groups to buy and sell land or property. Therefore, if one us considering buying a plot of land upon which to build, it is vital you check this ahead of signing any contracts. Many foreigners who come to Malaysia buy property under the Malaysia My Second Home (MM2H) programme, whose intention is to encourage foreigners to move to or spend a long time in Malaysia. The programme offers a number of incentives: a ten-year residence permit, tax-free car purchase, and tax-free income from outside Malaysia.

Penang

BUYING PROCESS The following is a very high-level overview of the process of buying property: 1 After identifying the property to purchase, hire a local lawyer to negotiate the price and draft an offer letter to the seller. 2 Upon signing the offer letter, pay 2% of purchase price. 3 Pay the additional 8% after the Sales and Purchase agreement is drafted and signed. 4 Apply for State Authority Consent. 5 The remainder of the purchase price is paid (cash or mortgage). 6 The Sales and Purchase agreement is sent to the land registry and the title deeds are transferred to the buyer’s name, subject to approval of the State Authority.

Numerous Asian airlines also fly from their respective hubs to the airport, most notable of which are Cathay Pacific (Hong Kong), China Airlines (Taipei), China Eastern (Shanghai), China Southern (Guangzhou), Emirates (Dubai), Etihad (Abu Dhabi), Garuda Indonesia (Jakarta), Japan Airlines (Tokyo), Korean Air (Seoul), Qatar Airways (Doha), Singapore Airlines (Singapore), Thai Airways International (Bangkok) and Vietnam Airlines (Hanoi and Ho Chi Minh City). For more information, visit klia.info/airlines.htm. The main point of entry in the eastern states of Sabah and Sarawak is Kota Kinabalu International Airport. Asiana Airlines and Korean Air have scheduled flights from Seoul to the city, Dragonair from Hong Kong, and SilkAir from Singapore. For more detailed guides, visit www.propertylife.asia/countryguides

81


Philippines Manila skyline

COUNTRY INFORMATION

GETTING IN

OFFICIAL NAME

Republic of the Philippines

CAPITAL CITY

Manila

CURRENCY

Philippine peso (US$1 = PHP40.69)

LANGUAGE

Filipino, English

TOTAL AREA

300,000 sq km

POPULATION

103,775,002 (July 2012 est.)

REGION

South-East Asia

TIME ZONES

UTC +8

DIALLING CODE

+63

GDP

US$240.66 billion

GDP PER CAPITA (Nominal; 2010–2011 IMF estimate)

US$2,345

HUMAN DEVELOPMENT INDEX

0.644 (medium)

(Nominal; 2012 IMF estimate)

MANILA

Cebu

PROPERTY BASICS AVERAGE PRICE

US$3,204 psm

RENTAL YIELD

8.62%

RENT PER MONTH

US$2,761

CAPITAL GAINS TAX

32%

(usually a 120-sqm apartment in premier city centres)

(usually a 120-sqm apartment in premier city centres)

SOURCE GLOBAL PROPERTY GUIDE

BUYING PROCESS WHERE TO BUY According to Jones Lang LaSalle, approximately 154,000 condominium units are expected to be completed between 2012 and 2016. This is in stark contrast to the 7,000 completed by the turn of the millennium. The country’s property boom is being filled by genuine demand from end-users, which is a result of improved economic outlook, rapid growth in foreign investment and reforms pushed by Benigno Aquino’s administration. According to Colliers, prime residential properties in the capital Manila are also likely to increase by 9% in 2013. Much of these are located in scores of central business districts and new developments mushrooming across the city, such the Rockwell Center, the old CBD and Century City in Makati, The Fort in Taguig, Ortigas Center, and Eastwood in Quezon City. Outside the capital are both landed and non-landed dwellings available for purchase of foreign nationals, such as Ayala Land’s Kasa Luntian in the picturesque Tagaytay 50 kilometres south-east of Manila, and Greenfield Estates, a residential and golf development located on the slopes of Mount Makiling in Laguna Province.

Coron, Palawan

82

Foreigners cannot own land in the Philippines (unless married to a Filipino). However, they can purchase condominium units or apartments. Businessmen and other investors can enter into a contract with Filipino colleagues for part ownership and divide the property. FORMING A CORPORATION As an entity recognised by Philippine laws to act as an individual, corporations are allowed to borrow, lease and purchase property. In the case of a foreigner buying property with a corporation, the corporation must have at least five people and must be at least 60% owned by a Filipino citizen (or citizens). NON-LANDED PROPERTIES Foreigners are allowed to buy condominium units as long as foreign ownership within a condo development will not exceed 40%. LEASEHOLD Finally foreign buyers can enter into a long-term leasehold contract for a plot of land. The lease can have an initial 50-year contract, which can be renewed for another 25 years. Any property built on that land is legally owned by the foreign buyers.

Laoag, Ilocos Norte

VISA REQUIREMENTS Nationals of ASEAN and EU member-countries, Japan, Australia, New Zealand, and the USA, among others, who are travelling to the Philippines for business or tourism are allowed to enter the country without visas for stay not exceeding 21 days. They, however, should hold valid return tickets for their return journey and their passports must be valid for a period of at least 6 months. For a complete list of these countries, go to www.dfa.gov.ph. In addition, nationals of Brazil and Israel are allowed to enter the Philippines without a visa for a stay not exceeding 59 days, while holders of Hong SAR, Macau SAR, British National Overseas, and Portuguese passports (only those issued in Macau) can enter the Philippines without a visa for stays not exceeding 7 days. AIRPORTS AND AIRLINES Air transportation is the primary way to enter the Philippines. The country’s main international gateway is Manila’s Ninoy Aquino International Airport (www.manila-airport.net) and, to a lesser extent, Clark International Airport (www.dmia.ph) located in a former US military base in Pampanga. Flag carrier Philippine Airlines (www1.philippineairlines. com) flies regularly from Manila to many regional airports across the archipelago, including Cebu, Davao and Kalibo, in addition to regular scheduled flights to cities across Asia, Oceania, and North America (Hong Kong, Singapore, Bangkok, Kuala Lumpur, Beijing, Jakarta, Bali, Tokyo, Osaka, Seoul, Melbourne, Sydney, San Francisco, Los Angeles, Toronto and Vancouver).

Boracay Island

Other regional airports that also have international flights include Mactan International in Cebu and Francisco Bangoy International in Davao City. Regional airports also serve Laoag City, Kalibo (near the island resort of Boracay), Bacolod, Iloilo, and Cagayan de Oro city, among others. LAND About one-third of roads in the Philippines are paved. Car rental is available, which is best organised with a reputable agency or through your hotel. Driver licences issued abroad can be used for up to 90 days. Three metro lines serve the Metro Manila area. The first line called LRT 1 has 20 stations from Pasay City in the south to Quezon City in the north and runs 20 kilometres over fully elevated track along Taft and Rizal Avenues in Manila towards EDSA in Quezon City. The second line has 11 stations and runs from Recto Avenue in downtown Manila to Pasig City in the eastern fringes of the metropolis. The third line has 13 stations that runs over EDSA, Metro Manila’s main thoroughfare. For more detailed guides, visit www.propertylife.asia/countryguides


JAMES E. HARRISON Harrison is the Commercial & Finance Officer at Panashco Media, publisher’s of Property Life magazine.

Fair Value and Market Value (and the dreaded white elephant in the room: Below Market Value)

S

o the start of my last article began with an intro about how my wife claims she writes my articles – but I claim she merely edits them! It’s a shame she edits this stuff out as I would like to start with a story about my wife again… The RICS invited us to a fantastic seminar entitled ‘RICS Business Valuation Breakfast Seminar 2013’. You can imagine how excited I was! [Editor's note: Sad but true.] I arrived at the pre-ordained starting time as my wife was just finishing her pre-seminar tea and sticky buns. With the RICS press-pack under arm, she walked out the door! Fair enough. That’s probably most people’s reaction to a seminar on valuation. Anyway, I missed the sticky buns but did listen to some great speakers. There were many different valuation methodologies discussed: u Market Approach:

Comparing recent transactions

u Income Approach:

Based on the aggregation of expected income generation

u Cost Approach:

The cost to create or replace

u Asset-based Approach:

Valuing the sum of individual assets

Now of course these are relating to business, not a ‘simple’ residential property. But all valuation comes down to a basis of Market Value, which, according to the RICS, goes something like this: ‘The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and willing seller in an arm’s length transaction after proper marketing where the parties had each acted knowledgeably, prudently and without compulsion.’ The IFRS (International Financial Reporting Standards) tell us that Fair Value, on the other hand, is ‘the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date’. Okay, well, hmm. None of these definitions use inordinately long or byzantine phrases… While they both agree that the date carries true for assets and liabilities, I think we can agree that a willing buyer and seller, acting knowledgeably, etc., can be equated with an orderly transaction between market participants. Interestingly, the RICS uses the word estimated and specify proper marketing, although I think that truly proper marketing

could be seen as covered by the orderly transaction of the IFRS. To me, the estimate is quite important, though. If the ‘price’ was not an estimation, then surely there would never be super profits on property deals or market crashes. YOUR NEXT PROPERTY PURCHASE So when you are looking into your next property purchase, be it for your own habitation or as an investment (or looking to renovate/refurbish your pad), how can you check that you are paying the right price? 1 Remove all of your emotion from the analysis. ‘But I like it!’ doesn’t have a box on the valuation/survey form. 2 Know your market. Look at comparable property prices, not just at the sales prices, to try and find out the actual market value. 3 Have a think about the market in which you are operating. Are both sides of the transaction willing, or is the economy putting pressure on one side or the other? 4 What happens in the future if you are not a willing seller? Will you still be able to get a ‘fair’ price? Well that’s not so complicated, was it? Check the prices of comparable property sales, check the market and expected market conditions, and try to stay rational. Of course, rationale may go out of the window when a certain someone starts gushing over the curtains (which the owner is taking anyway). [Editor’s note: In my own defense they were beautiful, silk curtains.] And speaking of the foibles of our loved ones when looking for a nest, as an aside I just have to say that the cost of repainting a whole house as a percentage of the cost of buying a house can often be negligible. And truthfully, I would rather walk into a house smelling of fresh paint than whatever the last owner had for their goodbye dinner. I’m not certain how my valuation lecturer for three years at Cirencester, or all the qualified and certified valuation experts worldwide, will feel about this glib look at valuation. But the truth of the matter is, that with enough truly comparable data, you should be able to get a fair estimation of market value. One last caveat, and a very important one – that dreaded acronym used by property marketers, BMV (Below Market Value) – if we take the price/value as being willing and educated participants, then why are these selling at BMV? Does that mean that either their estimate of market value is not realistic or that they are actually not a willing seller? And if they are not a willing seller, should you buy what they are selling? Are you sure you want to buy into a possible white elephant that has already charged down at least one developer? That’s more questions than I am willing to answer in this space, so until next time.

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Exclusively yours

Romance Aboard

The White Sails Yacht

T

he day could not have been more perfect. Or so Megan thought. With nothing but the sound of the sea blithely lapping by as they sailed towards the horizon, Megan was enjoying every pleasurable minute aboard the yacht which her boyfriend, Troy, chartered for the night. It was a privileged experience – just the two of them, engulfed in each other’s arms, lost in the beauty and madness of the vast oceans. At dusk, the sky cast orangey glows while Singapore’s cityscape started

to light up in the distance. They’ve seen these buildings many times before, but approaching them from the sea was an experience unlike any. Then, a sudden burst of dazzling fireworks joined the star-lit sky. Megan was overwhelmed – how she loved fireworks – her eyes were taking in the celestial wonder above. When the fireworks ceased and she finally lowered her gaze, there before her was a twinkling diamond ring and Troy’s twinkling gaze into her soul. ‘Megan Ericksen, marry me!’ he goes.

Take leisure to the highest level!

This kind of a proposal made in heaven could be every girl’s wish, and every boyfriend’s fancy. After all, momentous occasions such as proposals, wedding, anniversaries, birthdays and other important gatherings will do well if these etch upon people’s memory forever. The usual gatherings – organised in the usual venues and offering the usual activities – may become glossed-over through time that no amount of preparation and money can make them special.

Whatever the celebration, take it to the To get to us, call +65 8180 8008 highest level with White Sails Yacht today. or email enquiry@whitesails.com.sg to book your trip. We look forward to sailing with you! We welcome you aboard.


Fancy A Yacht? Just like Megan and Troy, you too can have an exclusive journey into Singapore’s high seas and even to offshore island destinations aboard a chartered yacht. Away from the crowd and the usual watering holes, you have the vast ocean to yourself and your loved ones, whatever the celebration. This is why chartering a yacht has been the experience shared only by the elite and the affluent. Well, that is before White Sails Yacht set sail. Now, you can charter a yacht and have a sweet taste of luxury without the bitter after-taste of exorbitant expense. White Sails Yacht brings the ultimate pleasure of yachting to more and more people who share the same predilection for one-of-a-kind, exclusive leisure experience without necessarily tearing a hole into one’s pocket.

5 good reasons to charter White Sails Yacht today

1

Let’s face it, organising events is a lot of work! Charter a yacht and no further preparation is needed. The ocean is your very own portico to a spectacular experience, no need for entertainers or other party gimmicks.

2

Even if you had money to burn on a big party, there’s nothing like yacht sailing to give you and your guests a thrill of a lifetime. Whether you prefer to make the Singapore seas your playground for the day, or charter the yacht to take you to offshore islands with their unspoilt beauty and secluded coves, you’re in for a treat.

4

Aboard our immaculate clipper, Heritage, with its amiable captain and crew deck, entertaining guests is effortless. Hosting a party can be taxing most of the time. Aboard our yacht, all you have to do is to relax and have a drink, barbecue with your guests, and dance the night away. Leave the pampering to us!

5

Finally, end your own curiosity! Chartering a yacht is the ultimate leisure trip. Now, you can make it happen. And while you are exploring, bring your loved ones or friends along. They will thank you forever for this first-time With White Sails yacht, you can experience! can luxuriate without luxuriate without getting broke the getting broke the next day! Our next day! Our package tours can beat package tours can beat your budget your budget on the usual parties, and on the usual parties, and you can you can even feel free to conjure up even feel free to conjure up your your own itinerary. We can design own itinerary. We can design bespoke packages just for you. bespoke packages just for you.

3

About White Sails Yacht Pte Ltd

2012 Top 500 SME Nominee for Business Excellence and premier yacht charter, White Sails Yacht Pte Ltd was founded in 2011 by businessman Dave White. Dave’s inspiration was to bring the experience of yacht chartering from the limited reach of the rich, glamorous and the elite, to more and more people who share the same predilection for exclusive, one-of-a-kind and high-end luxury experience at affordable price. For more information, visit www.whitesails.com.sg.


Property Life magazine - Issue 5  

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