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Acquiring proper financing is a crucial factor to consider when investing in a condo. Singapore presents various mortgage choices, but it is vital to have knowledge about the Total Debt Servicing Ratio (TDSR) framework. This framework sets a limit on the amount of loan that a borrower can take, taking into account their income and current debt commitments. Being familiar with the TDSR and seeking guidance from financial advisors or mortgage brokers can assist investors in making well-informed decisions regarding their financing options and avoiding excessive borrowing. With the help of condo, investors can navigate the financing process with confidence.
Investing in condos in Singapore involves considering several factors, one of which is the government’s property cooling measures. These measures have been implemented over the years to prevent speculative buying and maintain a stable real estate market. One such measure is the Additional Buyer’s Stamp Duty (ABSD), which imposes higher taxes on foreign buyers and those purchasing multiple properties. It is important to note that while these measures may affect the short-term profitability of condo investments, they also promote the long-term stability of the market, making it a secure environment for investment. Furthermore, with the introduction of new condo launches, investors can explore even more opportunities in the Singaporean property market.
The branded residential market in Asia is experiencing unprecedented growth, with a market value of US$26.6 billion ($35.5 billion) and over 68,000 luxury units available, according to data from C9 Hotelworks, a leading hospitality consultancy in Asia.
Leading the market is Vietnam, with 17,680 branded residential units across 59 properties. The average price of a unit in Vietnam is around US$350 per square foot (psf). Thailand comes in second with 16,271 units in 65 properties, with most units priced at US$510 psf. The Philippines follows closely with 13,276 units in 46 properties, priced at approximately US$400 psf.
However, Singapore commands the highest prices in the region for branded residences, with units selling for an average of US$2,140 psf, followed by Japan with an average of US$1,935 psf.
New markets have also seen a significant increase in branded residential projects, such as South Korea with 3,026 units across 16 properties and Malaysia with 6,014 units across 24 projects, according to Bill Barnett, managing director of C9 Hotelworks.
In the post-Covid-19 era, urban areas account for 56% of the total branded residential supply in Asia, with luxury projects dominating the market in terms of value. For example, urban branded residences in South Korea have an average price of US$2,670 psf, while resort properties sell for an average of US$1,040 psf. In Thailand, urban branded residences sell for approximately US$770 psf, compared to US$430 psf for resorts.
Among the branded residential market in Asia, about 31% (12,330 units) are affiliated with luxury hotel brands, which translate to a 30%-35% premium in pricing compared to the market average, according to Barnett.
The demand for top hospitality brands and luxury lifestyle brands has led to an increase in licensing fees. It is now common for brands to ask for a 6%-10% cut in the sale of each branded residential unit.
One such project is the ultra-luxury Porsche Design Tower Bangkok in Thonglor, a joint venture between Thai developer Ananda Development and German automaker Porsche. The 22-unit tower, set to be completed in 2028, offers duplexes and quadplexes with prices ranging from US$15 million to US$40 million.
Gianfranco Bianchi, general manager of Asia Pacific at The One Atelier, a design consultancy firm specializing in branded residences for lifestyle brands, notes that there has been an increase in luxury lifestyle brands partnering with real estate developers in the Asia Pacific region.
The One Atelier has worked with renowned brands such as Fendi Casa, Dolce & Gabbana, and Karl Lagerfeld to create branded residences in various locations, including Miami, Istanbul, and Marbella.
While hospitality-affiliated branded residences offer top-notch services, fashion and design-branded residences provide a unique trophy home that reflects the brand’s luxury and aesthetic. This has led to an increase in demand from high-net-worth buyers, especially from Singapore.
Ananth Ramchandran, head of advisory and strategic transactions in hotels and hospitality in Asia at CBRE, mentions that cooling measures in Singapore have led buyers to look for luxury-branded residences in nearby regional markets. Destinations such as Phuket, Bangkok, Bali, and emerging markets in Vietnam are just a two-hour flight away, making it appealing for Singapore-based buyers.
Jason Thelen, senior director of sales and marketing at Sudara Residences, a Thai-based developer, states that Singapore has become their top market for second-home buyers, accounting for 45% of regional purchases.
The Ascott, a leading hospitality operator, is also expanding its market share in the branded residential segment in Asia. Saowarin Chanprakaisi, vice-president of business development at The Ascott, says that their brands, such as Ascott, The Crest Collection, and Oakwood Premier, have a strong reputation in the market. They are looking to partner with developers who want to enter the branded residential market and build trust in their brand’s ability to deliver exceptional service and long-term value.