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A glut of new condo apartments in Singapore is adding to the property downturn as real estate investors adopt a wait and see attitude rather than jump into the market, it is claimed.
Jakarta’s condo market in particular is facing problems in the middle range property market while luxury units are still in demand because of a shortage of supply, according to a report from property consultants DTZ.
Their figures show that total cumulative supply of condominiums in Jakarta rose by 20.7% from 15,000 units in 2007 to 18,100 units in 2008.
Notable new completions included the 1,700-unit Thamrin Residences in June 2008.
According to DTZ, only 7,000 high-end condominium units are in the pipeline up to 2011. Despite the economic slowdown, the overall absorption rate of high-end condominium projects remained high at 88.3% for the fourth quarter of 2008.
DTZ said this was due to their limited supply and relatively strong purchasing power of the well-to-do communities in Jakarta as most purchases are financed by equity.
DTZ also said that some developers have already postponed their launches in response to the economic slowdown.
Meanwhile a new survey reveals that Singapore is amongst the top ten most expensive locations in Asia despite its weakened currency.
According to the latest Cost of Living Survey by ECA International this is because price rises have not slowed down as much in Singapore as in other parts of Asia.
While the prices of goods and services in China and Malaysia have increased at half last year’s pace, Singapore´s rate is down by just 25%.
In addition, currencies of locations previously more expensive than Singapore, like London, Stockholm and Istanbul, have depreciated at an even faster rate than the Singapore dollar.
These factors have contributed to Singapore becoming more expensive for visitors than many of the other locations in the survey.
Topping the list of the most expensive city in Asia is Tokyo followed by Nagoya, Yokohama and Kobe. Chinese cities like Beijing, Shanghai, Shenzhen and Guangzhou also featured strongly in the top ten list.