18-07-2013, 09:31 AM
Rapid rise in home prices prompting governments to curb purchases
Published on Jul 18, 2013
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By Cheryl Ong
FOREIGN property buyers are not just feeling the heat in Singapore but face restrictions across the region, according to a Knight Frank Research report yesterday.
Governments have been imposing curbs on fears that overseas buyers have been taking advantage of low interest rates to dive into Asian real estate, pushing up prices in the process.
Hong Kong has adopted policies similar to those in Singapore, ruling that foreigners must pay a stamp duty of 15 per cent on the purchase price.
Rising property prices in Iskandar in Malaysia have led Johor Baru's state government to announce higher taxes on foreigners owning properties. These are expected to be implemented by the end of this year.
Foreigners are also restricted from buying properties for less than RM500,000 (S$196,000).
In Vietnam, foreigners can buy apartments or condominiums with a 50-year lease but are not allowed to own land.
In many regional countries, foreigners cannot acquire property if they are not already residents, noted Knight Frank. In China, foreigners who have worked or studied there for at least a year can own a home for their own occupation. Foreigners in India can also buy a home if they live there.
Indonesian permanent or temporary residents can buy 25-year lease property that may be renewed twice for 20 and 25 years.
Restrictions are less severe in Thailand, where foreign buyers can acquire freehold apartments in up to 49 per cent of a development. Landed real estate can also be acquired for a lease of 30 years, with the option to renew for two subsequent 30-year periods.
Foreigners face fewer restrictions in Australia. Non-resident foreigners can buy uncompleted property or even land earmarked for development. Temporary residents may acquire one completed home for their own use.
Singapore has extensive policies in this area. Foreigners can buy private condominium units but must pay an additional buyer's stamp duty of 15 per cent.
And only permanent residents making a contribution to the country might be granted permission to buy landed property.
But foreign investors will continue to favour property in Singapore because of its well-structured legal environment and clear investment process, said Knight Frank Singapore associate director and research head Alice Tan.
Although there are still opportunities for foreign buyers in Asia Pacific, land is still seen as sacred in some countries, and the governments' protectionist policies will continue to keep prices in check, noted Knight Frank's Asia Pacific head of research Nicholas Holt.
"The politically sensitive nature of foreign ownership is unlikely to mitigate the chances of any wholesale changes (in prices) in the near future," he noted.
ocheryl@sph.com.sg
Published on Jul 18, 2013
[attachment=532]
By Cheryl Ong
FOREIGN property buyers are not just feeling the heat in Singapore but face restrictions across the region, according to a Knight Frank Research report yesterday.
Governments have been imposing curbs on fears that overseas buyers have been taking advantage of low interest rates to dive into Asian real estate, pushing up prices in the process.
Hong Kong has adopted policies similar to those in Singapore, ruling that foreigners must pay a stamp duty of 15 per cent on the purchase price.
Rising property prices in Iskandar in Malaysia have led Johor Baru's state government to announce higher taxes on foreigners owning properties. These are expected to be implemented by the end of this year.
Foreigners are also restricted from buying properties for less than RM500,000 (S$196,000).
In Vietnam, foreigners can buy apartments or condominiums with a 50-year lease but are not allowed to own land.
In many regional countries, foreigners cannot acquire property if they are not already residents, noted Knight Frank. In China, foreigners who have worked or studied there for at least a year can own a home for their own occupation. Foreigners in India can also buy a home if they live there.
Indonesian permanent or temporary residents can buy 25-year lease property that may be renewed twice for 20 and 25 years.
Restrictions are less severe in Thailand, where foreign buyers can acquire freehold apartments in up to 49 per cent of a development. Landed real estate can also be acquired for a lease of 30 years, with the option to renew for two subsequent 30-year periods.
Foreigners face fewer restrictions in Australia. Non-resident foreigners can buy uncompleted property or even land earmarked for development. Temporary residents may acquire one completed home for their own use.
Singapore has extensive policies in this area. Foreigners can buy private condominium units but must pay an additional buyer's stamp duty of 15 per cent.
And only permanent residents making a contribution to the country might be granted permission to buy landed property.
But foreign investors will continue to favour property in Singapore because of its well-structured legal environment and clear investment process, said Knight Frank Singapore associate director and research head Alice Tan.
Although there are still opportunities for foreign buyers in Asia Pacific, land is still seen as sacred in some countries, and the governments' protectionist policies will continue to keep prices in check, noted Knight Frank's Asia Pacific head of research Nicholas Holt.
"The politically sensitive nature of foreign ownership is unlikely to mitigate the chances of any wholesale changes (in prices) in the near future," he noted.
ocheryl@sph.com.sg