Government measures to deter foreign buyers from purchasing residential properties are by no means the preserve of Asian economies. In February 2024, Canada extended a nationwide ban on most foreign buyers until 2027 in an effort to curb speculation and improve affordability. In the US, a growing number of states, including Texas and Florida, have passed laws barring nationals from several countries, notably China and Russia, from acquiring land and property.
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Yet in the most liveable cities in Asia, with the strongest investment appeal, the political noose is tightening on overseas homebuyers. In April 2023, Singapore – which had previously taken a judicious approach to cooling its housing market by targeting sources of speculative demand regardless of their origin – raised extra stamp duties for foreigners buying any home to a staggering 60 per cent, the highest rate in the world.
While various factors contributed to the draconian measure, the government had mainland Chinese buyers – the dominant group of non-resident purchasers – squarely in its sights. It feared the reopening of China’s economy would accelerate the influx of Chinese money pouring into the city state because of its safe haven appeal.
Australia, another country popular among Chinese homebuyers, has banned foreign purchases of second-hand properties for the next two years, with limited exceptions for permanent residents and investments that increase housing supply. Although the share of foreign buyers of established and new homes fell sharply in the past decade, mainland China remains the single largest source of foreign capital.
However, the clampdown on foreign buyers of Asian residential properties has been a jigsaw with pieces missing. The most important ones are Japan and South Korea, the two other major developed markets where, until recently, there were no restrictions on foreign purchases of property.
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In South Korea, the permissive stance has come to an end. On August 21, the government announced that foreign buyers must secure local government approval before purchasing a property in Seoul, long a hotbed of speculative demand.
