Be careful when buying properties overseas: CASE

SINGAPORE — The consumer watchdog is warning Singaporeans to be careful when buying property overseas, in light of complaints received from investors who have had their fingers burned.

In line with these concerns, the Advertising Standards Authority of Singapore (ASAS) also announced today it is working with the Monetary Authority of Singapore and the Council for Estate Agencies to enhance the current Advertising Code on advertisements on investments in financial instruments and properties.

This would include raising the standards of disclosure, and strengthening measures to deal with advertisers who repeatedly place misleading advertisements.

“This will give members of the public a better understanding of the risks of the investment and greater protection against recalcitrant advertisers. Details will be developed in consultation with the industry and the new guidelines will be implemented by the end of this year,” the ASAS said.

In 2013 and 2014, the Consumers Association of Singapore (CASE) received 13 complaints regarding purchases of foreign properties, with most of the complaints involving consumers who had invested in foreign properties but were unable to get back their promised returns or pay-outs.

“Many of them were lured into making the foreign property purchase by promises of high rental yields or high capital growth. However, after making the investment, many of the consumers were unable to obtain any update on their investment and in some cases, have lost contact the property investment company,” said CASE in a media release today (May 4). “Some of the cases involved a loss of large sums of money of more than S$100,000 by the consumer.”

CASE noted that more Singaporeans are buying properties overseas and many foreign properties are being advertised and marketed in Singapore. However, investing in an unfamiliar foreign market holds high risks, such as foreign currency fluctuations, property market trends, sovereign risks and interest rate risks.

“Some of these deals have turned sour when prices declined sharply resulting in investors losing a large sum of their money,” said CASE. “There are also reported cases where the developer of foreign properties became insolvent and was unable to continue with the development resulting in a total loss of the investment by the consumers.”

CASE president Lim Blow Chuan is also urging authorities to review existing legislation to ensure that developers who sell their foreign properties locally abide by the same standards in information disclosure as local developers.

He also said: “Investors should remain cautious about these high risk investments and keep in mind their financial needs and commitments as well as the risks involved.”