Singapore’s doubling of Foreigner Stamp Duty Will benefit other property markets

Hong Kong investors have been active in global real estate markets for many years, with a particular focus on cities such as London, New York, Sydney, Vancouver, and Singapore. These cities have attracted Hong Kong investors because of their strong property markets, stable political environments, and well-developed legal systems. In recent years, Hong Kong investors have also been looking to invest in real estate in other parts of Asia, particularly in markets such as Japan, Vietnam, and Thailand. These markets offer attractive investment opportunities due to their growing economies, increasing tourist arrivals, and favourable investment conditions.

Home ownership by foreigners and non-residents are driving up housing prices in Canada. As a result, lawmakers are imposing a foreign home ownership ban from January 1st, to address its current housing crisis. If you’re not a Canadian citizen or permanent resident, buying a home in Canada may be off the table for the next couple of years.

Singapore’s housing market has remained relatively resilient amid a slowing market elsewhere, partly due to an influx of wealth into the city-state post-covid. In a move to cool its housing market, the Singapore government has doubled the stamp duty tax rate for foreigners purchasing any home from 30% to 60% with effect from April 27^th. For the government, the latest moves are a further fight against inflation and a bid to trim income inequality, which is a big concern in the wealthy city-state.

A key consideration when investing in properties overseas is the cost associated with buying, holding, and selling properties in these cities. Savills compares these costs for a US$2 million property across the top cities favored by Hong Kong investors. Among the mature property markets, both London and New York show extremely good value to invest and remain as a global safe heaven.

Savills predicts that the regional hubs of Dubai and Singapore are forecast to lead global prime residential price growth in 2023. Both cities will continue to benefit from sustained inflows of high-net-worth individuals but are not immune to higher interest rates and wider economic headwinds. Dubai forecast a prime price growth of between 6% and 7.9% in 2023, where Singapore’s predicted prime capital value growth of between 6% and 7.9%, driven by a lack of supply at the top end of the market. However, due to the Singapore government’s recent move to double stamp duty on foreign home ownership, the forecast for Singapore should change.

Amongst the rising markets, Dubai is undoubtedly a city to consider due to its low entry cost and tax-free market, stable economy, strategic location, and commitment to development and innovation making it an attractive destination for investors looking to diversify their portfolios.