The nearly 336,000 private residential properties in the pipeline in Johor state are more than all the private homes currently standing in Singapore.
Monetary Authority of Singapore (MAS) board member Lawrence Wong gave this perspective in Parliament yesterday when he warned that a glut of private residences in Johor could cause a fall in property values.
Most of these residences are in the Iskandar development zone of southern Johor where many Singaporeans have invested in such properties.
In contrast, latest official figures show Singapore has 327,811 private homes. There are another 83,642 in the pipeline, including executive condominiums.
But some Singaporeans are becoming more cautious, said Mr Wong, who is also Minister for Culture, Community and Youth.
The number of Malaysian properties bought through real estate agencies in Singapore fell from 2,609 in 2013 to 838 last year.
But not everyone recognises the risks of buying property abroad, said Mr Wong, who was speaking on behalf of Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam, the minister in charge of MAS.
Mr Wong said MAS and the Council for Estate Agencies (CEA) will step up efforts to help investors better understand risks in investing in overseas propertyand how to do due diligence.
For example, CEA has issued guidelines on what these investors should look out for. These include rules or restrictions on purchases and ownership of foreign property, and dispute-resolution avenues available.
Prompted by the recent flurry of advertisements on foreign property, the Advertising Standards Authority of Singapore said last week that it would implement new guidelines for property investment ads by the year end.
On the same day, the Consumers Association of Singapore warned local buyers of the risk in buying foreign properties.
In Parliament yesterday, Ms Lee Bee Wah (Nee Soon GRC) asked about the number of Singaporeans who invested in Iskandar properties and the ways that Singapore's banks safeguard themselves against major defaults in property loans by these buyers.
Mr Wong replied that Singa- pore's banking system does not have a large exposure to such property loans. Overseas property loans form only 2 per cent of the housing loan portfolios of key mortgage lenders in Singapore.
Under the tighter loan rules known as the Total Debt Servicing Ratio framework, lenders must also assess customers' ability to repay their debts when they apply for new property loans.
This applies whether the property is in Singapore or overseas. The assessment must take into account all existing debt, including that for the overseas property.
Mr Wong said: "MAS' stress tests on banks' housing loan portfolios indicate the banks will remain sound even under stressed conditions."
Ms Lee asked if the additional buyer's stamp duty on property purchases in Singapore would be lifted, adding that it has led Singaporeans to put money in overseas properties.
Mr Wong said Singapore's property cooling measures should be looked at separately.
They were introduced to prevent a property bubble emerging amid global conditions such as low interest rates and high liquidity.
This article was first published on May 12, 2015.
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