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MAY 2012 |

YOUR SHOUT You may have to splash out more

for that Malaysian property Best of the Blogs


viewed as yet another measure to curb Singapore’s red-hot property market. Under the scheme, foreigners who wish to apply for permanent resident status can choose to invest up to S$2 million in properties in Singapore, out of a total investment of at least S$10 million in Singapore assets such as bonds or equities for at least fi ve years. Mohamed Ismail, chief executive offi cer of PropNex, says “the FIS... was actually never intended to target foreigners to come in to buy the S$2 million property. It was for PR. What we have realised here is that foreigners are interested in investing in Singapore property for its fundamentals, regardless whether they get PR or not.” But agents admit Singapore could lose some of its attractiveness for foreign investors who are solely interested in seeking permanent residency status. According to Tan Kok Keong, director for Research and Consultancy at OrangeTee, “there are still a lot of wealthy people who believe in the growth of Asia and the growth of Asia’s economy, so in that light, I think Singapore will play a very important part of their asset allocation, which means that over the medium and long term, we still think that all these rich people will still fi nd residence properties worth investing in to ride on the growth of Asia.”

Australian home loans hit by a

drop in confi dence Best of the Blogs

By Pauline Ng on Malaysia is mulling a two-fold increase to the fl oor price of residential properties purchased by foreigners in a bid to prevent prices from spiralling too rapidly. The possibility of a revision to existing guidelines to raise the minimum price to RM1 million (S$417,000) from RM500,000 was fl agged by The Star newspaper this month. The daily cited unnamed sources as saying that the measure was ‘in the pipeline’, with a forthcoming announcement to be made by Nor Mohamed Yakcop, minister in the Prime Minister’s department heading the Economic Planning Unit. It did not say when it would be implemented. One of the sources told The Star that selected growth corridors such as Iskandar Malaysia might be less aff ected by the proposal, in that a lesser minimum threshold might be applied - RM800,000 for example - to assist with their development success. The government has continued to come under pressure over aff ordability issues despite recent measures to cool the property market. Pushing the fl oor price up for foreign buyers - especially in landed properties - could be a welcome move in the eyes of young middle-class Malaysians frustrated with soaring real estate prices when starting salaries have advanced little in two decades. Many believe that foreigners have little diffi culty stumping out RM500,000 for homes because their currencies tend to be much stronger. Property consultants say they were aware of the possibility of the new rules, but believe that the move is still at the proposal stage. ‘It’s a fl yer to check public response. Not all states will agree,’ Malaysia Property Inc chief executive Kumar Tharmalingam told BT. Foreign buyers of Malaysian property come mainly from China, Singapore, Japan and South Korea, the newspaper said. Even so, foreigners only account for an estimated 2 per cent of the residential market which saw robust growth last year.

Singapore agents consider the

impact of scrapping FIS Best of the Blogs

By Thomas Cho on Plans by the Monetary Authority of Singapore to scrap its Financial Investor Scheme (FIS) are unlikely to dampen foreign investors’ appetite for Singapore residential properties. Why? Because investors contribute less than one per cent of overall residential property transactions in Singapore. The scrapping of the FIS may be

By Michael Heath on Australian home-loan approvals have fallen for a second successive month on the fastest exodus of first-home buyers in a decade, increasing pressure on the central bank to cut interest rates as consumer confidence weakens. The number of loans granted to build or buy houses and apartments fell 2.5 percent in February from a month earlier, the biggest drop since March 2011, says the statistics bureau in Sydney. A private survey showed consumer confidence declined to an eight-month low last month as concerns mount among mortgage holders paying the highest borrowing costs across major developed nations. Reserve Bank of Australia Governor Glenn Stevens signaled last week he may end a three-month pause in rate cuts as soon as next month if weaker-than-forecast growth slows inflation. The central bank lowered borrowing costs in November and December, to 4.25 percent, to buttress the housing market, support jobs and boost confidence among consumers who are saving more. The data “underscores a pretty soft underbelly in terms of the Australian household sector: they’re cautious, they’re not feeling so great, they’re not borrowing,” says Su-Lin Ong, head of Australian economic and fixed- income strategy at RBC Capital Markets in Sydney. “At the margins, it adds to the case to further easing by the RBA.” First-home buyers accounted for 17.2 percent of dwellings that were financed in February, down from 20.3 percent in January and higher than 16 percent a year earlier, the report showed. That was the steepest fall since February 2002, according to data compiled by Bloomberg.

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