Restrictions for international property buyers and investors who want to buy property in the Asia-Pacific region are unlikely to be lifted in the near future, according to Knight Frank’s latest review of property markets in the region.
Although the number of cross-border residential property transactions has increased over the last few years, the rapid rise in residential house prices has resulted in policymakers in the region taking more protectionist stances as domestic affordability becomes an issue.
The additional buyers stamp duties in Hong Kong and Singapore are good examples, as are the proposed additional taxes for foreign buyers in the Johor state of Malaysia. Mainstream property prices in Hong Kong, China and Malaysia have increased by 28 percent, 23.8 percent and 6 percent respectively over the last year ending Q1 2013.
Knight Frank noted that while certain countries have not been open to foreign ownership of property, overseas buyers in Japan, South Korea and New Zealand should face no significant barriers to home ownership.
The issue of land ownership is seen as being especially sacred in many countries, and not something that can be given over to foreign hands, the agency reported.
“Other countries try to strike a balance between giving domestic citizens an affordable stake in their country, while offering the possibility of property ownership to attract foreign talent who make an economic contribution to the country,” said Nicholas Holt, Knight Frank’s Asia Pacific Research Director.
“Indeed, many countries allow foreign residents permission to buy property that would not be accorded them if they lived overseas. This is the case in the two giants of the region, China and India whose respective ownership regulations allow resident foreign purchasers the possibility to buy property.”
In Singapore, foreign purchasers are permitted to access to the private non-landed market freely, although this accounts for only around 17 percent of the total existing housing stock. Landed property however is more difficult to access for foreign buyers, with a number of hurdles having to be faced before a purchaser could even be considered.
Elsewhere, Australia’s policy of allowing foreign purchasers into the new build or land market, so as not to crowd out domestic purchasers in the resale market has limited the numbers of foreign purchasers, although it has provided developers with an incentive to target offshore interest.
Source – PropertyGuru – 18 2013
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