Time to invest in mass market properties in Asia

Dec 23, 2009 - PropertyGuru.com.sg

Despite the recent rise in property prices in Hong Kong and Singapore, Managing Director Tim Murphy of IP Global Ltd is still optimistic on the sector, particularly in mass market property.

“If you want to make real money in real estate, you should be buying stuff which is at the mass market level, that's where the demand is in the region,” Mr. Murphy said on Asia Squawk Box of CNBC.

According to Mr. Murphy, the yields were better in smaller flats compared to homes that are worth a million dollars, fuelled by demands from new families.

“I'll be looking at areas with great transport links in actually the cheaper end of the market, not the stuff that makes the news,” he added.

“If you look at Hong Kong and Singapore, they've had an incredible run of maybe 3-6 months. Particularly at the high end, property markets have gone off the scales 20-30%," Murphy remarked. "But that's sort of media news."

He also noted that people are getting fixated on high-end numbers, especially in Singapore, where people have bought into the entire casino concept of Marina Bay.

“If you look at the mass market in both Singapore and Hong Kong, they've performed fairly steadily of about 10-15% these last 3-6 months. That's not even recouping some of the losses that we saw in 2007-2008, particularly in Singapore. So I think the fundamentals of these markets are still extremely strong.”