The Monetary Authority of Singapore (MAS) has warned about the potential risks of property oversupply overseas.
Minister for Culture, Community and Youth Lawrence Wong said this in Parliament on Monday (May 11) in response to a question by MP Lee Bee Wah on how many Singaporeans are individual owners of properties in Iskandar Malaysia.
Mr Wong was speaking on behalf of Deputy Prime Minister Mr Tharman Shanmugaratnam, who is also the Chairman of MAS.
Mr Wong said if there is an oversupply of properties, investments can lose their value, and it will be difficult to find tenants. He spoke about reports in Iskandar and Johor which highlighted aggressive land banking by developers.
“There is indeed a real concern about future oversupply in the property market there and hence the potential decline in value of homes,” Mr Wong said. “Based on data from Malaysia’s national property information centre, there are around 336,000 new private residential units in the pipeline – more than the total number of private homes in Singapore. So everything that is coming through in the pipeline is already more than the total number of private homes in Singapore.”
Given these indications, Mr Wong said buyers are being more cautious.
Nonetheless, he said not all Singapore buyers have recognised the risks involved in overseas property purchases, so MAS and the Council for Estate Agents (CEA) will continue to step up efforts to raise awareness on this.
For example, the CEA has issued guidelines on what investors in overseas property should look out for.
This includes finding out about rules or restrictions in foreign property purchases, ownership, the taxes payable and dispute resolution avenues available in the foreign market.
Source : Channel NewsAsia – 11 May 2015