Asia pacific’s foreign buyer restrictions to remain

The firm’s latest review of the Asia Pacific markets suggest that while residential property purchases have increased in recent years, the rapid increase in house prices is still a concern for officials seeking to protect affordability for local buyer.

Indeed, Singapore and Hong Kong have been involved in stamp duty hikes for foreign buyers in an attempt to cool speculative investment following a 28 per cent and 23.8 per cent rise respectively in the first quarter of 2013.

Knight Frank notes, though, that Japan, South Korea and New Zealand have no significant barriers in place for home ownership.

“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,” according to 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% of the total existing housing stock, explains Knight Frank’s blog. 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 (or secondary) market has limited the numbers of foreign purchasers, although it has provided developers with an incentive to target offshore interest.

For more information, the full Knight Frank report can be read here.