Hong Kong’s loss in overseas buyers may be Singapore’s gain
Hong Kong’s loss in overseas buyers may be Singapore’s gain
The rival financial hubs will slug it out for overseas buyers
Hong Kong’s decision to impose a stamp duty on foreign home buyers could push away those investors into the sagging, cheaper property market in Singapore, according to analysts at Cushman & Wakefield Inc.
“The fallout from the stamp duty could be beneficial for Singapore,” Sigrid Zialcita, managing director for Asia Pacific research at Cushman & Wakefield, told Bloomberg. “Singapore is always seen as a place where you can preserve capital and we are expecting interest from foreign nationals to come back.”
Both cities have levied stamp duty hikes on foreign buyers. Hong Kong increased its stamp duty to 30 percent for foreigners, 15 percent for all non-first-time buyers in November. In Singapore, where residential property values have diminished by 11 percent since 2013, the additional buyer’s stamp duty (ABSD) stands at 18 percent.
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Analysts believe overseas buyers will be crucial in mitigating the decline in Singapore home prices. Capital flight continues to leak from mainland China and into Hong Kong as Chinese investors flee the depreciating yuan.
Should Singapore attract enough overseas buyers, the city-state could limit the decline in its property values to about 1.5 percent this year, according to a Bloomberg survey.
The Singapore home market could even be approaching its trough, with prices expected to soften by as much as 2 percent, according to Desmond Sim, CBRE’s head of research for Singapore and Southeast Asia.
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Source: Property Report