Singapore’s property market is seeing a surge of interest from wealthy Indonesians, even as developers brace for an impending slump.
These buyers have their eye on luxury homes, valued at $5 million or more, according to latest Urban Redevelopment Authority data.
From January to mid-August this year, Indonesians purchased 30 of these properties. They bought just eight luxury homes in 2015.
“We’re seeing a big increase in Indonesians buying the most expensive property,” said Mr Ang Kok Leong, a senior estate agent at SLP Realty.
“Indonesians see Singapore as a politically stable safe haven,” explained JPMorgan Chase & Co’s Jasslyn Yeo, a global market strategist. “This is an important factor, especially at this time when you see so much instability in the region,” she said.
Indonesians have been snapping up more property overall. They bought 189 homes here in the first six months of the year, data from Cushman & Wakefield showed. This is 23 percent rise from the first half of 2015.
The surge in home purchases comes after the passing of a tax amnesty plan. Starting from June, Indonesians have to pay a four percent tax on offshore wealth, that can take the form of property or any funds.
The tax is expected to increase to 10 percent by next March. Not declaring offshore wealth comes with a hefty penalty – they will have to pay 200 percent of what they owe, Bloomberg reported.
This amnesty is targeted at rich Indonesians, who are set to repatriate or pay taxes on about $300 billion in offshore wealth, left in Singapore during times of unrest.
“This global shift into increased transparency will no doubt result in subtle yet important changes in the portfolio allocation of a typical high-net- worth individual,” said Mr Evrard Bordier, managing partner of Swiss bank Bordier & Cie.
Read Bloomberg for the full report.
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