Singapore deconstructed

Singapore


A friend’s e-mail the other day was hugely depressing. Your former neighbourhood is changing, he wrote. The condominium next to the one I lived in Singapore was up for sale — for Singapore $ 1.5 billion, the largest collective sale on record. The one behind had just been sold, and another across the road had come crashing down some months ago.

My mind went back to the futile hours I spent trying to convince my wife to buy an apartment in Singapore. She consistently rubbished my pleas: why would we buy a place in Singapore when we could get one back home in India?

Well, for one, we could have made a lot of money, is what I tell her now. However, we never bought a place even when mortgage rates were rock bottom and banks were trying to outdo each other to offer loans. We put the money in India.

Singapore believes in continuous reinvention to remain relevant in a changing world. The city keeps its shine by periodically razing large condominiums and building new glass-faced architectural wonders. In our country, buildings stand for centuries or until they are felled by natural disasters or crumble due to poor construction quality.

When we moved there in 2001, the entire region was emerging from the Asian economic crisis that left the rich poorer and the poor paupers. Economic growth had fallen in all Asian tigers and the Singapore real estate market was apprehensive. Rents plummeted as highly paid expatriates returned home after companies began cutting costs — in some areas by as much as 60 per cent from the mid-1990s.

We rented our apartment for $ 2,000 per month. When we left some months ago, we were paying far less as the sentiment continued to be poor. In India, the real estate market never turns sour. However, the tide has turned in Singapore and if we were still there we would have to increase the rent or look for another place. If we had bought the same apartment in 2001, it would have cost us $ 750,000; now it’s up for sale for $ 1.8 million.

Housing in Singapore is a big emotional charge — for Singaporeans and for foreigners, Indians included. There are government housing estates and private condominiums; both run on a separate set of rules. In the housing estates tenants can hang their clothes to dry on bamboo poles sticking several feet out of their windows; in private apartments that is actively discouraged. Housing estates also don’t have swimming pools. But when thousands of apartments in dozens of Singapore’s private condominiums are razed, the market shrinks and the number of people seeking homes rises dramatically, prompting owners to jack up rents.

Friends I left behind tell me they consider themselves lucky if the landlord wants to raise the rent by 50 per cent. Singapore might be a good place to seek real estate, but only if you are willing to get out before the current shortages are addressed in the next three to four years.

India, on the other hand, is a huge country with a massive pent-up demand for residences that will sustain in the long term. Looking back, maybe I did the right thing by not buying an apartment in Singapore and instead investing the money in India. At least I can now go live in it.