New property tax for foreign property buyers in Johor? – 9 Oct 2013
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Latest news about property purchase in Johor where Iskandar is located. A new fee, expected to be 4 to 5 % of the property (new/resale) price might be implemented by year-end or early next year and will apply to all properties (commercial/industrial/residential).
This new fee if implemented (applicable only to foreign buyers) will not deter Singaporeans from snapping up properties in Iskandar as most Singaporeans only use Singapore higher property prices as a reference point in buying “cheaper” properties across the Causeway.
The risk in buying such properties is very real due to the opaque property transaction information in Johor.
Nevertheless if you do invest in properties in Johor, do ensure that the project is a unique one and not a usual run of the mill kind, otherwise when it comes to disposal, you will not have a easy time. Do not use Singapore’s usual buoyant resale market as a reference point. You are just looking through the wrong end of your binoculars.
Our Best, Always!
Residential property – A 20% price correction? – 9 Oct 2013
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In a report issued on 5th October (Fri), Barclay warned that general residential property prices could be headed for 10 to 20% correction from the peak of 1H 2013.
Their report revealed nothing new that we have not shared with our participants and members. Large oversupply coming on board in the next few years and higher interest rates is expected to drive selling pressure. Also, the 4 years seller stamp duty on residential properties would have reached its tail end by then, giving investors more motivation to offload.
Of course, the 20% drop if it happens will not occur overnight but over the next few years. Barclay forecasted that prices will stabilized/remain flat in 2013 (Yes, we are already seeing this with developers reducing/holding prices), before falling 5% in 2014 (reasonable assumption) and another 5 to 15% in 2015.
Our independent research shows that residential property prices in general over the past 2 to 3 years have advanced well over 20%. Hence a correction of 10 to 20% over the next 2 to 3 years will not be surprising. It’s just bringing us back to saner acceptable levels.
Our Best, Always!