Indonesians have a taste for luxury in the Singapore property market.

In 2006 one third of all new houses and apartments sold in Singapore went to Indonesian citizens, according to Colliers International of Singapore, with 3000 units of property being bought up by cash-rich Indonesians. Panangian Simanungkalit, a property consultant, estimates the value of these sales at 10 trillion rupiah. kompas

Panangian guesses that there are about 100,000 apartments and townhouses in Singapore owned by Indonesians, used for business travel purposes or for the housing of children who school on the island state.

A senior executive of the Chyau Fwu Group in Singapore, Eddie Chow, says in recent times Singaporean property developers have put some effort into approaching wealthy Indonesians. Luxurious apartments under construction such as those at the Parkview Eclat on Grange Road, due to open in 2010, ranging in price from 50 billion rupiah (300 m2) to 162 billion (1,000 m2), were likely to be much in demand by Indonesians, said Eddie. He says:

Indonesians are pre-occupied with location and luxury. It’s common knowledge that Indonesians go for the 9-11 district in Singapore, above all near Orchard Road.

Singaporean property rules allow foreigners to buy housing that is “non-landed”, ie elevated, with 99 year freehold ownership.

According to Panangian Simanungkalit investing in the Indonesian property sector is a better investment with returns of up to 15% per annum possible, and demand high. Panangian says those Indonesians who buy in Singapore may be doing so for prestige purposes.

In order to develop a more dynamic property market at home, similar to Singapore’s, Panangian recommends the development of exclusive housing estates on Bali and other small islands but adds that reforms to land ownership rules to allow foreigners to buy homes will be needed first (Apartment Buying).

We have to imitate Singapore. They are able to provide investors with confidence.