The latest property cooling measures in Hong Kong may prompt more mainland Chinese buyers to turn to Singapore as a destination for property investments.
Market experts said this may in turn cause property prices here to escalate higher and it could even spur another round of cooling measures.
Colin Tan, who is Head of Research & Consultancy at Chesterton Suntec International, said: “Every time cooling measures are applied in China and in Hong Kong, we can expect Chinese property investors to redouble their efforts in their search for alternative places to invest, and Singapore continues to climb up higher on their list.”
Experts said Chinese buyers formed about 16.4 per cent of foreigners that bought Singapore properties this year, with a total value of around S$1.4 billion.
Meanwhile, Executive Director of Residential Services at Credo Real Estate, Liang Thow Ming, said that Hong Kong’s tightening efforts could also have a psychological impact on buying sentiments in Singapore.
This may be in the form of heightened fears of additional cooling measures introduced in Singapore’s property market.
Still, most analysts believe that the overall impact of the measures will be limited as not many Singaporeans invest in the Hong Kong property market.
Donald Han, who is managing director at Cushman and Wakefield, said that “Hong Kong is not a hot-bed for Singaporean investors”.
Mr Han added that traditional Singaporean investors tend to go for property markets such as Australia and the United Kingdom, where property cycle movements are less drastic.
Measures outlined by Hong Kong Chief Executive Donald Tsang on Wednesday include a halt to automatic residency for wealthy Chinese buyers, effectively preventing investors from gaining residency in Hong Kong through property purchases.
This will be effective from Thursday.
Mr Tsang was responding to public concerns in Hong Kong about a housing shortage and property prices spiralling out of control.
Average home prices in Hong Kong have climbed by 15 per cent so far this year.
Source : Channel NewsAsia – 13 Oct 2010