Australia is planning to introduce fees for foreigners who buy residential properties there. But some property watchers say the impact on Singaporean buyers is unlikely to be significant.
Buying properties Down Under may soon cost you more if proposals to charge extra fees on foreign buyers are approved.
Among the suggestions are: For properties below A$1 million, foreign buyers will be charged A$5,000 (about S$5,300), and for properties over A$1 million, buyers will incur A$10,000 for every additional million in the purchase price.
Even if these proposals get the go-ahead, one firm here said the impact on Singaporean buyers is unlikely to be significant. The company specialises in Australian residential properties and has marketed several developments in Melbourne.
Peter Thng, executive director at Reapfield Property Consultants, said: “From our experiences, most clients are purchasing properties priced between A$400,000 to A$800,000 – so that would fall under the A$5,000 fee category. As a result, I don’t think that will be impactful on purchases in Singapore. It represents approximately 1 per cent of the purchase price.”
Mr Thng added that if needed, some developers might absorb part of the fees to boost sales.
Advertisements for overseas properties, especially those in Australia, the UK and Malaysia, are a common sight here. Singapore was also one of the top sources of foreign investment in Australian properties.
From May 2012 to June 2013, Australia’s Foreign Investment Review Board approved about A$2 billion worth of real estate investment from Singaporeans in Australia – behind China, Canada and the United States.
China took the top spot, with total real estate investment from the region coming in at almost A$6 billion.
In the year before, Singapore was the second-biggest source of foreign investment in Australian properties, with about A$5.7 billion spent.
And investment funds from Singapore are still expected to flow into Australia, according to Australian-based company K4 Developments, which gave the main reasons as the stamp duties and loan curbs buyers face in the Singapore market.
Edward Tat, director at K4 Developments, said: “The other reason as well is the weakening Australian dollar … due in part to the Reserve Bank of Australia’s interest rate cuts, and there’s expectation of further cuts.”
The company has just launched its first project in Singapore – a development in Perth.
However, those looking to pick up properties in Sydney will most likely have to pay a premium, as a two-bedroom unit in a project in downtown Sydney – Sydney by Crown – recently transacted for about A$1.6 million.
Source : Channel NewsAsia – 1 Mar 2015