Hike in Hong Kong stamp duty drives Chinese investor interest towards Singapore and UK property

Hike in Hong Kong stamp duty drives Chinese investor interest towards Singapore and UK property

With Hong Kong stamp duty now at 15%, return-seeking investors are keen to secure property in Singapore and UK.

Summary

  • An increasing number of Chinese buyers are becoming attracted to other overseas property markets after an increase in Hong Kong stamp duty
  • Despite increased interest in Singapore property, price growth remains slow
  • For the best return on investment, overseas buyers are better looking to UK property where the cost of acquisition remains low, post-Brexit

 

An increasing number of Chinese investors are looking to overseas investment opportunities, in a bid to protect themselves from any further weakening of the yuan.

While historically, Hong Kong property was favoured among Chinese investors, a recent increase to Hong Kong stamp duty has seen more investors look to Singapore property where stamp duty is significantly lower. As a result 2017 could see a period of relief for the Singapore property market after a three-year decline in house prices.

Stuart Crow, JLL’s Head of Asia Pacific Capital Markets, commented: “Investing overseas is a strategic move for most mainland investors and we expect few long-term structural changes.”

While the increase to Hong Kong stamp duty and resulting shift in interest towards Singapore property will help limit the decline of Singapore property values, predicted growth for property remains slow, with Savills Plc forecasting prices to rise 1% on average this year.

Desmond Sim, Head of Research for Singapore and Southeast Asia at CBRE Ltd, commented: “Singapore house prices are approaching their trough, with a forecast price move of flat to minus 2%.”

For a higher return on investment, overseas investors are better looking to the UK where the cost of acquisition remains much lower as a result of the Brexit vote, which saw the sterling exchange rate plummet and render UK property investments less expensive.

With stable cash-flow returns, an increasing number of overseas investors are viewing the UK as a safe haven for property investment. 2017 should see an increase in the number of acquisitions from foreign investors.

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