Asia reining in foreign property buyers Rapid rise in home prices prompting governments to curb purchases Source: Straits Times | Money 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 New 2-room flats to offer flexible design Source: Straits Times By Daryl Chin Property Correspondent LIVING room too small? Knock down a wall and combine it with the bedroom. This is one of the design elements the Housing Board plans to include in its newest two-room flats. This will give buyers, such as eligible singles and low-income households, flexibility in the use of its 36 sq m of space. This was revealed in its response to The Straits Times' queries regarding last month's tender calling for contractors to build a mock-up for a new flat type at its research centre in Woodlands. "In designing new two-room flats, we aim to achieve a layout that will not only improve the ease of construction, but also provide flat owners with greater flexibility in the use of internal space," a spokesman said. "For example, designing the bedroom and living room to be contiguous so that if required, the two spaces can be combined." The size of the new flats, however, has raised concerns. National Development Minister Khaw Boon Wan noted that these smaller flats would allow singles, who can also opt for the typical two-roomer - which is 45 sq m and cost about $100,000 - more choices to fit their needs and budget. But SLP International's head of research Nicholas Mak, who estimates that new units will start from $80,000, believes singles might be turned off by the lack of space. He pointed out that they are smaller than private shoebox units, which are less than 50 sq m. "Singles who entertain frequently, or have many material possessions will probably stay their hand. From an investment perspective, it probably won't be popular with families on the resale market," he added. For the first time later this month, singles above 35 and earning less than $5,000 a month will be able to bid for Build-To-Order two-roomers in non-mature estates. Previously, they could only buy from the resale market. "At this size, there's probably enough space just for a bed, a book case and a wardrobe," said single civil servant Fiona Tan, 42, who had been eagerly awaiting more details of the new flats. "A home should be a refuge, not a pigeon hole." Based on plans of the new flat, the cut in space seems to have come largely from the kitchen area, which has been shaved off to make it flush with the air-conditioner ledge outside the bathroom next to it. "Most single friends I know go for larger three-room resale flats. But if space needs to be cut, the kitchen will probably be the first to go," said marketing executive Michael Chan, 36, explaining that many of his single friends prefer not to cook. The HDB spokesman made it clear that the tender was part of its research into flat design and part of a "regular review to address the evolving lifestyle needs and preferences of flat buyers". More details for the new two-roomers will be announced when ready, she added. darylc@sph.com.sg |