Property developers in Hong Kong and Singapore are venturing overseas following the introduction of some of the most-restrictive property curbs by their respective governments last year, according to media reports.
Given the stifled demand at their home turf, these developers are shifting their focus to China, the US and the UK.
Singapore developer OUE acquired the tallest building in California last year while Oxley Holdings plans to build 3,400 homes in London after it acquired the 40-acre Royal Wharf from Ballymore Properties Holdings Ltd for £200 million (S$417). Meanwhile, Hong Kong builder Wharf Holdings is expanding in 14 mainland Chinese cities.
The most expensive cities to purchase a luxury home in Asia, Hong Kong and Singapore rolled out tighter lending restrictions in 2013 which could lead to higher mortgage rates.
In Singapore, 2013 saw the introduction of some of the most stringent measures which include higher stamp duties on home purchases, a cap on an individual’s debt at 60 percent of his income and higher real estate taxes. Notably, the city-state started introducing curbs four years ago.
Over in Hong Kong, the minimum mortgage down payment was raised six times since 2010. Taxes were also imposed, which include doubling the stamp duty for transactions above HK$2 million (S$326,115) in February and an additional 15 percent levy for non-resident buyers.
“The property measures in Singapore and Hong Kong have repressed market sentiment,” noted Sigrid Zialcita, head of Asia research at Cushman & Wakefield.
Joseph Tsang, Hong Kong-based managing director at Jones Lang LaSalle said that with the measures, “everyone is now more cautious about the impact of rising interest rates and also the possibility of more government curbs.”
“In 2014, we’ll likely see transactions stay low and also more pressure on home prices,” he added.
Nikki De Guzman, Junior Journalist at PropertyGuru, wrote this story. To contact her about this or other stories email nikki@propertyguru.com.sg
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