Singaporeans shun overseas property deals on back of escalating forex fears

Overseas home purchases dropped to $0.4b in H1.

Singaporean buyers have become less keen on splurging cash on overseas properties, according to the latest Financial Stability Report by the Monetary Authority of Singapore (MAS).

In the first half of 2015, Singapore households injected $0.4 billion into overseas home deals. This marks a significant decline from $1.1 billion in the same period last year.

“This suggests that Singaporeans are adopting a more cautious attitude towards such investments,” the MAS said.

Overseas property transactions peaked in the first half of 2013, when deal value hit about $1.7 billion. It has been on a steady decline since then.

“While the weakening of some regional currencies vis-à-vis the Singapore dollar may lower the cost of investing in overseas properties, households should be mindful of the additional risks associated with investing in overseas property markets,” the MAS warned.

“In particular, currency fluctuations could affect the value of their debt obligations and their rental returns. Potential oversupply problems in overseas property markets could exacerbate the risk of significant price falls and capital losses to investors. Households should continue to carry out due diligence before making any property investments, including for overseas properties,” the MAS added.