12-12-2011, 08:25 AM
The Straits Times
Dec 12, 2011
S'pore property may lose shine among foreigners
Investors considering other options like HK: Analysts
By Cheryl Lim & Esther Teo
THE heavier stamp duties announced last week may have already dented Singapore's standing as a major property investment destination while giving rivals such as Hong Kong a boost, said analysts.
Britain-based consultancy Black Brick Property Solutions said it has received inquiries from Asian and overseas investors who had been thinking of investing in Singapore property, but who have been deterred by the new tax rules.
Other property agencies said they expect more clients to ask about their investment options after the festive period.
The new measures unveiled last week include an extra stamp duty of 10 per cent on a home bought by a foreigner - a move expected to dampen foreign demand while increasing interest in markets such as Britain and Hong Kong that do not have restrictions on foreign buyers.
Ms Camilla Dell, managing director of Black Brick Property Solutions, said: 'Stamp duty can be significantly reduced in Britain if the property is owned in a company name. Buyers pay very little or no tax on the acquisition.'
She added that the tax system is more favourable, particularly for overseas investors who pay no seller's or capital gains tax if they are not British residents. This gives them a tax break of 28 per cent when they sell their properties.
Mr Julian Sedgewick, director of international residential sales at Savills, said: 'London, in particular, could stand out because of the good currency exchange rate between the pound and the dollar'. The exchange rate is £1 to about S$2.
Hong Kong is looking attractive too, because of the government's adoption of a non-intervention policy, meaning no restrictions are placed on foreign property investments.
Its government also recently said it may reverse some of the property cooling curbs if the economic situation worsens.
Another spin-off from the stamp duty move could be that foreign developers and agencies might get more aggressive marketing their properties here as investors in Singapore look elsewhere, said Dr Chua Yang Liang, head of research at Jones Lang LaSalle (JLL).
Although local and foreign investors with a short-term outlook will have more of an appetite for properties outside of Singapore now, many analysts predict that the pool of foreign buyers in Singapore will not dry up.
These include buyers from Indonesia, Malaysia, India and China.
'Businesses are still investing in Singapore and the country is still considered an attractive place to work, live and visit,' said JLL's Dr Chua.
'Foreign investors looking to Singapore will just factor in the additional amount into their total sums. I don't think they will disappear completely.'
Other experts agreed, saying that Singapore's property market remains open and transparent compared with those in regional neighbours like Australia, which has rules restricting foreign buyers to only first-hand property.
While some foreign buyers will be hit hard by the new rules, those from the United States, Switzerland, Liechtenstein, Norway and Iceland are exempt due to certain clauses in their free-trade deals with Singapore. However, as with all non-Singaporeans, they are not allowed to purchase landed property without approval.
Buyers from these countries, excluding permanent residents, comprised only 1.7 per cent of all foreigner purchases of non-landed homes this year, a check of URA data showed.
Cushman & Wakefield Singapore vice-chairman Donald Han said of those who are exempted: 'While their proportion might increase due to other foreign buyers retreating from the market, their absolute numbers are expected to fall if the markets remain the way they are, whether the new measures were introduced or not.'
cherlim@sph.com.sg
esthert@sph.com.sg
Dec 12, 2011
S'pore property may lose shine among foreigners
Investors considering other options like HK: Analysts
By Cheryl Lim & Esther Teo
THE heavier stamp duties announced last week may have already dented Singapore's standing as a major property investment destination while giving rivals such as Hong Kong a boost, said analysts.
Britain-based consultancy Black Brick Property Solutions said it has received inquiries from Asian and overseas investors who had been thinking of investing in Singapore property, but who have been deterred by the new tax rules.
Other property agencies said they expect more clients to ask about their investment options after the festive period.
The new measures unveiled last week include an extra stamp duty of 10 per cent on a home bought by a foreigner - a move expected to dampen foreign demand while increasing interest in markets such as Britain and Hong Kong that do not have restrictions on foreign buyers.
Ms Camilla Dell, managing director of Black Brick Property Solutions, said: 'Stamp duty can be significantly reduced in Britain if the property is owned in a company name. Buyers pay very little or no tax on the acquisition.'
She added that the tax system is more favourable, particularly for overseas investors who pay no seller's or capital gains tax if they are not British residents. This gives them a tax break of 28 per cent when they sell their properties.
Mr Julian Sedgewick, director of international residential sales at Savills, said: 'London, in particular, could stand out because of the good currency exchange rate between the pound and the dollar'. The exchange rate is £1 to about S$2.
Hong Kong is looking attractive too, because of the government's adoption of a non-intervention policy, meaning no restrictions are placed on foreign property investments.
Its government also recently said it may reverse some of the property cooling curbs if the economic situation worsens.
Another spin-off from the stamp duty move could be that foreign developers and agencies might get more aggressive marketing their properties here as investors in Singapore look elsewhere, said Dr Chua Yang Liang, head of research at Jones Lang LaSalle (JLL).
Although local and foreign investors with a short-term outlook will have more of an appetite for properties outside of Singapore now, many analysts predict that the pool of foreign buyers in Singapore will not dry up.
These include buyers from Indonesia, Malaysia, India and China.
'Businesses are still investing in Singapore and the country is still considered an attractive place to work, live and visit,' said JLL's Dr Chua.
'Foreign investors looking to Singapore will just factor in the additional amount into their total sums. I don't think they will disappear completely.'
Other experts agreed, saying that Singapore's property market remains open and transparent compared with those in regional neighbours like Australia, which has rules restricting foreign buyers to only first-hand property.
While some foreign buyers will be hit hard by the new rules, those from the United States, Switzerland, Liechtenstein, Norway and Iceland are exempt due to certain clauses in their free-trade deals with Singapore. However, as with all non-Singaporeans, they are not allowed to purchase landed property without approval.
Buyers from these countries, excluding permanent residents, comprised only 1.7 per cent of all foreigner purchases of non-landed homes this year, a check of URA data showed.
Cushman & Wakefield Singapore vice-chairman Donald Han said of those who are exempted: 'While their proportion might increase due to other foreign buyers retreating from the market, their absolute numbers are expected to fall if the markets remain the way they are, whether the new measures were introduced or not.'
cherlim@sph.com.sg
esthert@sph.com.sg