Wednesday, September 28, 2011

Developers go all out to woo Chinese home buyers

BEIJING: Ever since Mr Jacky Zhang visited a few Singapore booths at an international property fair two weeks ago, his iPhone has been ringing with invitations to join special property-viewing group tours in the city-state.
By Grace Ng, China Correspondent

'These (Chinese) agents made it sound like a first-class holiday: My wife and I would stay at a five-star serviced residence in Singapore, be chauffeured around in a BMW to view condos and then shop to our hearts' content,' said Mr Zhang, 34, who works in the finance sector.

Although his original intention at the fair was to check out Australian home prices, he quickly got distracted by the enthusiastic sales pitches of companies such as Far East Organization, United Overseas Bank, Credo Real Estate and Chinese consultancy Shuangcheng, which claims to represent small Singapore developers.

'They offered me advice and attractive rates on everything from Singapore's rental yield to mortgages,' he said.

Mainland Chinese have become the top foreign buyers of Singapore property, which is seen as a good investment even amid fears of another global recession.

'A strong, stable Singapore dollar appeals to these Chinese buyers as they seek to diversify their funds. The absence of capital gains tax... and plentiful property information available also appeals to them,' said Knight Frank Knight Frank research head Png Poh Soon.

Other factors include Singapore's economic stability, its proximity to China - a six-hour flight from Beijing - and an excellent bilingual education system, added Ms Sara Zhang, who heads Far East Organization's Beijing office.

The number of private property deals sealed by foreigners and permanent residents in the second quarter made up 30 per cent of all private home sales in Singapore, according to a report by DTZ Research.

Chinese nationals accounted for just over a quarter - 26 per cent - of such purchases. Other foreigners include Indonesians and Malaysians.

And despite tougher Singapore immigration procedures and climbing property prices this year, Chinese buyer interest remains strong, say agents and developers.

No wonder then that many agents and developers from Singapore are rushing to China to woo well-heeled investors.

They face a huge market - China has more than a million millionaires - but also stiff competition from other popular investment destinations like the United States and Australia.

So Singapore players are coming up with ways to make their potential customers feel special.

For one thing, they are spicing up the traditional property talks in dingy conference rooms with monthly 'Wealth Enhancement Seminars' at fancy five-star hotels.

Here, snazzy power-point presentations are sometimes accompanied by a buffet spread, which may even include durian puffs, to whet investors' appetites for apartments selling for as much as $2,500 per sq ft.

To attract attendees to these events, agents send out mass text messages.

One reads: '15 per cent discounts on Singapore property; first three people to sign up for seminar will get free round-trip airfare to Singapore!'

Another way to pamper Chinese investors is through property-viewing tours. Major developers like Far East and CapitaLand organise such three-day trips once or twice a month.

Tour groups, which depart from major metropolises like Beijing and Shanghai but often include rich families from smaller cities, typically have 10 to 15 people.

'We intentionally keep the group small to ensure more personalised service,' said a CapitaLand spokesman, adding that these tours will cover four or five properties that best fit the prospective buyers' needs.

Popular CapitaLand projects include D'Leedon - located near Nanyang Primary School - and Latitude and Urban Resort, which are close to mainlanders' favourite brand-name goods boutiques in Orchard Road.

Tour participants have to pay for their own airfare and hotel, sometimes at discounted group rates. But developers could pick up the tab for those who put a down payment on a property, said Mr Eric Chau of Colliers International in Beijing.

This incentive - along with lavish seafood dinners - is said to have helped clinch a good number of purchases, although developers are coy about revealing the numbers.

'Take-up (of properties) has been positive' was all a Far East spokesman would say.

To get even more up close and personal with potential buyers, more Singapore players are setting up their own offices or expanding in China.

CapitaLand Residential will open a showroom in China early next year. Far East's Beijing office has moved to larger premises in the business district.

Meanwhile, consultancy OrangeTee is in the process of setting up a Shanghai office and has also partnered China's largest online property portal Soufun to handle its queries on Singapore property purchases.

'This is a good time to set up our own office in China. We see an opportunity to serve Chinese customers who are looking overseas now that they are restricted from buying more than two properties in China, due to government rules introduced this year to cool the property market,' said OrangeTee executive director Steven Tan.

The company has helped a number of Chinese buyers with their purchases, including one man who bought 19 units, each priced between $2.2 million and $6.3 million, at one go near Orchard Road.

After hearing so much about Singapore's hot property scene, Mr Zhang is considering taking up tour offers to the Garden City.

'I'd like to be treated like a VIP too.'

Additional reporting by Carol Feng