Holiday house hunting

The pandemic is seeing demand for resort homes in the mountains and by the coast.

12/11/2021

IT is no secret that Singaporeans love to travel, and no doubt the pandemic over the 18 months has put a damper on that. Unable to spend on flights, hotels and other overseas experiences, the well-heeled are compensating for their wanderlust by snapping up holiday homes instead.

According to several overseas property developers, Singaporeans are putting their money into vacation homes, especially the resort variety - never mind that they have been unable to visit these locations.

When Andermatt Swiss Alps launched Koya, a collection of 34 Japanese-inspired mezzanine-style apartments in March, 95 per cent of the units were reserved 2 weeks into the launch of its waiting list. Singaporeans made up 8 per cent of the buyers.

Maureen Yeo, Andermatt Swiss Alps' regional director for Asia, says the pandemic has had a positive impact on its property sales: "We sold more properties in 2020 than we did the year before. One of the key reasons is the market volatility that prompted investments into brick and mortar, coupled with low interest rates."

But just why would someone want to buy a holiday home, especially when the pandemic has shown that lockdowns and travel restrictions can happen any time?

Yeo says Andermatt's buyers tend to be high-net-worth individuals who are either looking for a home or an investment property in Europe. They also tend to be well-travelled, outdoor adventure enthusiasts who are commonly avid skiers and are looking to visit Andermatt numerous times a year, both in summer and winter. "Therefore, they are looking for a more permanent base - somewhere that they can call home and enjoy time with friends and family, an escape from the metropolis and stresses of daily life. Our properties are also freehold, which is hugely important to our Asian investors as it will be kept in the family for everyone to enjoy," says Yeo.

Lee Sze Teck, senior director for research at Huttons Asia cites other reasons such as "the holiday home is an asset they own which they benefit from capital appreciation and the ability to sell without restrictions."

He adds, "Buyers may have made plans to retire in that country and the home they buy now will serve them in the future."

Buoyed by the positive response, Andermatt Swiss Alps announced in October the launch of its latest property, Silva, a collection of 6 luxurious apartments with a rooftop spa and an outdoor jacuzzi. These apartments were launched exclusively to investors across Asia-Pacific. Yeo says: "Over the last 2 years, we've had increasing interest from Singaporean real estate investors and travellers as individuals are becoming more discerning."

Located in the heart of Switzerland, Andermatt is a 90-minute drive from Zurich.The year-round destination offers plenty of ski runs, an award-winning 18-hole golf course, and 500 km of marked hiking trails. There are also Michelin-starred restaurants, hotels, a concert hall, and international retailers.

Yeo, who lives in Switzerland, but returned to Singapore in October to meet with potential Silva buyers, says: "The response from Singaporeans has been great and we're working closely with new and pre-existing clients to ensure they are able to finalise the buying process. We hosted a successful sales event where, despite heightened restrictions, we had over 20 interested investors."

There's no doubt that the openness, being close to nature - in this case the Swiss forests - while still being close to modern amenities is part of the locale's appeal. After being cooped up in the city and within four walls, a home up in the mountains or by the sea is set to be the desired accommodation type. Chua Shir Yee, JLL Singapore's head of international residential sales, says: "We have seen a growing trend of resort homes being purchased in the last one year. We have sold a couple of ski resort homes in Switzerland, and we are seeing interest in Japan ski resort homes too."

One Japanese ski resort property that has been popular with Singaporeans is Yu Kiroro in Hokkaido, which was completed in 2019.

In February, it reported that over 80 per cent of the 108 units were sold to buyers from Asia. Sanranyu Adhyanasakul, chief business officer at Kiroro Resort Holdings, says 15 per cent of the buyers are Singaporeans - and that number is likely to increase.

"Ski-in, ski-out properties especially in places with powder snow are limited in supply and they have been popular among the Singapore market. We received a number of inquiries during the past 6 months and some deals went through," says Adhyanasakul.

Citing buyers' privacy, Adhyanasakul could only share that "these buyers are business owners and snow lovers who would like to enjoy the powder snow with their family and friends, but still expect the gains from their investment."

Beach resorts just as hot

Closer to home, beach properties have also garnered growing interest from Singaporeans. In July, luxury resort developer Selo Group launched the Samaja Selo Private Residences on Tioman Island, which comprises beach-front and hilltop private residential villas with private air transfers from Singapore.

Its founder Andrew Corkery says: "We are currently generating a lot of interest from Singaporeans wanting to invest in a second home with easy accessibility, yet still offering the high level of experience and amenities demanded in the post-pandemic era."

He adds: "As the travel corridors continue to open, Singapore will contribute significantly to Selo's growth plans - not just for Tioman Island, but across the total group."

In the coming months, it will have a dedicated Singapore-based sales team to cater to this growing market.

Besides Tioman Island, Selo Group also has properties in Lombok. Its Selong Selo Resort & Residences opened in South Lombok in 2016 and has over 50 luxury villas with 1 to 7 bedrooms, a full-service spa, and beach club access. Adjacent to the resort, Selo is currently constructing another 20 villas which are now available for sale.

"Lombok has been an alternative to the populated beaches of Bali for decades, but its remote location and underdevelopment affected the appeal for mainstream tourism," says Corkery. "That is all set to change with a new focus on development, along with the recent surge of telecommuting and a rise in luxury surf tourism."

While Selo Group says now is the time to invest in Lombok, Finns Bali, Indonesia's leading lifestyle and real estate developer, just launched Finns Lifestyle Village (FLV), a collection of 206 luxury apartments in Berawa, Canggu with wellness, fitness, sports, recreation and retail facilities.

Since it was launched for presales in October, it has received interest from markets as far away as Russia and the US. "Closer markets such as Singapore, Hong Kong and Australia have been exceptionally strong with enquiries," says Nadia Hussey, its Singapore sales executive."We believe FLV will be very well received by Singaporeans, as Bali has always been a popular holiday destination for both locals and expats."

She adds that buyers in the Investment Occupy category as opposed to Owner Occupy can stay in their FLV apartments for up to 60 nights per year, above the standard 14 to 21 nights offered.

"This is an enormous benefit to buyers who live in geographically close locations such as Singapore, as they can use it for their own extended holiday (working from our co-working centre), or allow friends and family to stay, or do a home swap," says Hussey.

Changes due to Covid

Adhyanasakul says those who move in to Yu Kiroro now will be able to enjoy new benefits such as online grocery shopping and room service, which were only made available when the pandemic started.

Yeo has also noticed a change in what buyers want since the pandemic started. Before, Yeo says "buyers were looking more at pure numbers, such as yields and returns".

She adds: "Since the pandemic started, we have seen real estate investors and tourists becoming more discerning and people are looking for a second home or holiday locations that have a full calendar of outdoor activities that can fill up room occupancy, thereby resulting in strong tourism receipts and returns to owners."

Yeo also believes post-pandemic, people will be looking for destinations where they can connect with each other as well as with nature. "Accelerated by the pandemic, we know that buyers, especially from Asia, have adopted a fresh perspective on alpine living as the perfect second home - both for pleasure and investment purposes - based on the adventures available, proximity to nature, and focus on health and wellbeing."

Other needs that developers have noted include the importance of outdoor space, lower-density living, home offices, property management and security.

"A main concern for these buyers is access to more secluded areas without sacrificing modern amenities such as high-speed Internet, quality food and beverage, and transportation," says Selo's Corkery.

Micah Tamthai, chief operating officer of Minor Lifestyle which has Anantara Desaru Coast Residences and Avadina Hills by Anantara in its portfolio, says: "The pandemic has spurred the need for social distancing and the rise of remote working, which have in turn fed the trend towards purchasing second homes, especially in holiday destinations."

He adds that the pandemic has also underscored the importance of nature and space, wellness and well-being, and quality time spent with loved ones. "Within the luxury segment in Southeast Asia, we see a trend towards multi-generational property purchases - with pooled investment being made in residences that can be used by grandparents, parents and children, as well as preference for landed and single-family homes - where outdoor space abounds, privacy is a given and living spaces are customisable to fit the needs of a large or growing family," says Tamthai.

City locations remain popular

But while resort homes may now be more popular, traditional city homes are still deemed desirable.

Huttons Asia's Lee says, "Generally, the places favoured by buyers for holiday homes are Bangkok, Bali, Kuala Lumpur and Johor Baru. Buyers buy for a variety of reasons, including a low cash outlay, and no additional buyer stamp duty nor total debt servicing ratio.

Govinda Singh, executive director, valuation and advisory services for Colliers in Asia, says: "London, Melbourne, and Sydney are in demand, as their locations make holiday homes in these countries a store of value. Favourable housing taxation policies, such as the easing of stamp duties in London, have also made it attractive to own a holiday home in select countries, despite the rising prices."

Singh adds that holiday homes in remote or secluded destinations with large areas of land to manage can be challenging, especially if the owners do not live in their property all year round or lack good knowledge of the local area. "Therefore, most Singaporeans still prefer to own a holiday home located in well-established destinations," he says.

He also notes: "While the more adventurous Singaporean buyers may consider purchasing a holiday home in emerging destinations, travel restrictions would probably mean that they will continue to choose destinations that are closer to home, and into known markets instead of overly speculative ones."