Property cooling measures in HK unlikely to affect S’pore: experts

The recent property cooling measures introduced in Hong Kong will not have an impact on Singapore property prices. Experts said foreign property investors are unlikely to switch their portfolio from Hong Kong to Singapore.

Besides being leading international financial centres, both Singapore and Hong Kong hold some of the world’s most expensive homes.

Hong Kong tops the list, according to research from real estate agency Savills, while Singapore — the fourth most expensive in the world — continue to see private home prices soaring to new highs.

Both cities have introduced a series of cooling measures to dampen prices.

Hong Kong introduced its third set of measures in two months last Friday, requiring foreign buyers to pay 15 per cent tax. This is more than Singapore’s Additional Buyer’s Stamp Duty of 10 per cent – introduced in December 2011.

Analysts said the move will unlikely cause foreign investors to move to Singapore and boost its property prices higher.

To cool its property market, Singapore has capped the home loan tenure, the sixth cooling measure in recent years. However, with high liquidity in the global market, analysts said new measures would be more frequent, with one to two measures a year being the norm in the years to come.

Singapore has also beefed up the supply of private homes — an assurance that should help investors make measured decisions.

Colin Tan, head of research at Chesterton Suntec International, said: “At the moment, the perception is that HK is trying to fight fire… At the same time, they are trying to fight the free market status. We have committed to supply as much as demand, whereas they have not yet said so.”

Still, market watchers forecast home prices to remain hot in Singapore.

Alan Cheong, head of research at Savills Singapore, said: “Developers will ultimately have to pass the land cost to the buyers. You have a case where land cost has risen by 15 to 30 plus per cent over the past six months.

“Come next year, with land being about 60 per cent of development cost, developers will probably have to raise prices by 10 to 15 per cent for certain areas, particularly in the suburbs.”

While Hong Kong and Singapore are considered safe havens for property investing, some analysts said investors may look to second-tier Asian markets which have less government intervention.

Source : Channel NewsAsia – 30 Oct 2012