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Thread: MAS sounds warning on foreign property risks

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    Default MAS sounds warning on foreign property risks

    http://www.straitstimes.com/archive/...risks-20140521

    MAS sounds warning on foreign property risks

    S'poreans poured $2b into foreign property last year, a rise of 43%

    Published on May 21, 2014 1:18 AM

    By Melissa Tan


    THE increasing number of Singaporeans buying property overseas has prompted a warning from the central bank about the risks.

    The Monetary Authority of Singapore (MAS) said yesterday that its reminder is aimed at ensuring financial stability and prudence among Singaporeans.

    It noted that Singaporeans poured $2 billion into foreign property last year based on deals done by real estate agencies here - 43 per cent up on the $1.4 billion invested in 2012.

    MAS warned investors to take note of the risks before taking the plunge, including the challenges of dealing with an unfamiliar foreign market, particularly market conditions that can affect supply and demand. "Those who over-extend themselves will face increased vulnerability should prices decline sharply," it said.

    It also cautioned that laws and regulations governing property purchases and loans in other countries can differ significantly from Singapore. While property developers here must maintain project accounts and adhere to strict progress payment rules, "there may not be similar safeguards in other countries", MAS noted, in response to media queries.

    It also pointed to foreign exchange and interest rate risks.

    Local banks said yesterday that they take steps to ensure borrowers remain financially prudent, while realtors said they make sure buyers are aware of the risks.

    "In assessing customers' applications for overseas property loans, we take into consideration both the onshore and offshore loans that customers have in accordance to the TDSR framework," said Mr Joseph Wong, head of consumer credit risk management at OCBC Bank.

    TDSR, or total debt servicing ratio, was imposed in June last year and caps the amount of debt a borrower can take on.

    However, MAS acknowledged that the TDSR rules "cannot prevent those who take loans from lenders outside Singapore or use their own savings to finance overseas property purchases from over-extending themselves".

    Malaysia and Australia are the most popular markets for local buyers, said consultants yesterday, although others such as London and Japan are gaining ground. "Malaysia was one of the hottest due to its proximity, and also because the culture there is not too different from here," said Chris International director Chris Koh.

    ECG Holdings chief executive Eric Cheng said interest in real estate in Japan has grown, partly owing to Tokyo's successful bid to host the 2020 Olympic Games.

    He added that he warns prospective buyers not to overstretch themselves and to do their homework before signing on the dotted line for an overseas property.

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    Default More foreign developers setting up Singapore offices

    https://sg.news.yahoo.com/more-forei...2--sector.html

    A growing trend is seeing established foreign developers opening sales offices in Singapore as high property prices and prohibitive cooling measures in the city-state are continuing to drive local investors to look overseas for better investment opportunities.

    In the space of only a few days, UMLand from Malaysia and Australia's Crown Group have announced their newest offices in Singapore. Other foreign players that have set up offices here in recent years include UEM Sunrise, E&O Berhad and UK property giant Berkeley Group.

    Strategically located at Anson Road, the 2,000 sq ft UMLand Property Galleria officially opened last Friday and showcases all of the developer's projects in Kuala Lumpur and Iskandar Malaysia. One of its latest projects being launched to Singapore investors is Star Residences, a luxury mixed-use development consisting of high-end condominiums and retail units, situated in KLCC.

    Charlie Chia, UMLand Group CEO, said: "Singapore has established itself well as an international hub therefore we have recognised the importance for us to have a strategic presence in this market place, where we can better service our existing and potential customers from the local community, as well as customers from regional markets such as Hong Kong, Indonesia, China and Australia."

    Meanwhile, Crown Group which is active in property development and investment in Sydney yesterday revealed it is opening an office at Suntec Tower Two – the company's second in Asia after Indonesia.

    The new Singapore office will serve to expand upon Crown Group's growing presence in the region. The developer has a A$3 billion portfolio of projects under development and in the pipeline and is currently developing and selling four major projects.

    "In a market showing high demand for Australian property – as an investment or for children studying overseas – the office will provide access to potential Singaporean buyers and local brokers. It will also enable Crown Group to establish valuable partnerships with relevant companies on a local level," the group said in a statement.

    Iwan Sunito, CEO of Crown Group, noted: "The demand of buyers in the Asian market has grown significantly in the last six months.

    "Furthermore, the Australian government is dedicated to engaging with overseas investors – primarily in Asia – a key component in our decision to expand into this chosen market. For Singapore-based investors, Australia is geographically, politically, educationally and culturally attractive."

    Research from HSBC published in February 2014 shows that more than one third of affluent Asians have overseas property investments, with Australia ranked as the most sought-after destination regionally. For Singaporeans, it was Malaysia that emerged as the top location overseas for buyers and investors.

    Romesh Navaratnarajah, Senior Editor at PropertyGuru, wrote this story.

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    teddybear is offline Global recession is coming....
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    MAS should set new law to say anybody who buy 2nd property in Singapore, for overseas properties, or obtain finance in Singapore to buy overseas properties, will need to pay 15% ABSD!

    Quote Originally Posted by Arcachon View Post
    https://sg.news.yahoo.com/more-forei...2--sector.html

    A growing trend is seeing established foreign developers opening sales offices in Singapore as high property prices and prohibitive cooling measures in the city-state are continuing to drive local investors to look overseas for better investment opportunities.

    In the space of only a few days, UMLand from Malaysia and Australia's Crown Group have announced their newest offices in Singapore. Other foreign players that have set up offices here in recent years include UEM Sunrise, E&O Berhad and UK property giant Berkeley Group.

    Strategically located at Anson Road, the 2,000 sq ft UMLand Property Galleria officially opened last Friday and showcases all of the developer's projects in Kuala Lumpur and Iskandar Malaysia. One of its latest projects being launched to Singapore investors is Star Residences, a luxury mixed-use development consisting of high-end condominiums and retail units, situated in KLCC.

    Charlie Chia, UMLand Group CEO, said: "Singapore has established itself well as an international hub therefore we have recognised the importance for us to have a strategic presence in this market place, where we can better service our existing and potential customers from the local community, as well as customers from regional markets such as Hong Kong, Indonesia, China and Australia."

    Meanwhile, Crown Group which is active in property development and investment in Sydney yesterday revealed it is opening an office at Suntec Tower Two – the company's second in Asia after Indonesia.

    The new Singapore office will serve to expand upon Crown Group's growing presence in the region. The developer has a A$3 billion portfolio of projects under development and in the pipeline and is currently developing and selling four major projects.

    "In a market showing high demand for Australian property – as an investment or for children studying overseas – the office will provide access to potential Singaporean buyers and local brokers. It will also enable Crown Group to establish valuable partnerships with relevant companies on a local level," the group said in a statement.

    Iwan Sunito, CEO of Crown Group, noted: "The demand of buyers in the Asian market has grown significantly in the last six months.

    "Furthermore, the Australian government is dedicated to engaging with overseas investors – primarily in Asia – a key component in our decision to expand into this chosen market. For Singapore-based investors, Australia is geographically, politically, educationally and culturally attractive."

    Research from HSBC published in February 2014 shows that more than one third of affluent Asians have overseas property investments, with Australia ranked as the most sought-after destination regionally. For Singaporeans, it was Malaysia that emerged as the top location overseas for buyers and investors.

    Romesh Navaratnarajah, Senior Editor at PropertyGuru, wrote this story.

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