SINGAPORE May 21 Singapore's central bank has
issued a warning to investors about the risks posed by buying
property overseas, as high house prices at home prompt a growing
number of its residents to invest in real estate abroad.
A strong Singapore dollar and curbs on mortgage lending at
home have encouraged more Singaporeans to buy property in the
likes of Britain and Australia, with the Monetary Authority of
Singapore (MAS) reporting a 43 percent rise in the value of
overseas property transactions handled by local real estate
agencies in 2013 compared with 2012.
MAS said in a statement that it is monitoring developments
closely to ensure financial stability and that investors do not
"Risks are more difficult to assess or manage when investors
are unfamiliar with conditions in overseas markets, such as the
prospects for oversupply of properties, or of a deterioration in
economic conditions," MAS said.
It also flagged the foreign exchange risk of borrowing in
one currency but collecting rent in another.
MAS said the value of overseas properties dealt with by
Singapore real estate agencies was S$2 billion ($1.6 billion) in
2013, up from S$1.4 billion in 2012.
A recent research report by estate agent Knight Frank found
that buyers from Singapore accounted for 23 percent of all
purchases of newly built central London property in 2013, second
only to British buyers who accounted for 27 percent.
($1 = 1.2522 Singapore Dollars)
(Reporting by Rachel Armstrong; Editing by Chris Gallagher)