Money Laundering Scandal Leads to Decline in Singapore’s Luxury Bungalow Sales
October 31, 2023
The luxury property market in Singapore is seeing a decline in sales activity amidst a major money laundering scandal.
There has also been an increase in taxes for people from other countries buying property and the cost to borrow money is going up. Even affluent individuals are cutting back on renting fancy mansions in Singapore, where rents could go as high as $150,000 a month.
As per Knight Frank data, a mere eight high-value homes were purchased by the end of September in contrast to the 20 sold in the previous year.
Realstar Premier Group, a firm specializing in premium landed properties, reported a significant fall in its usual sales, moving less than half of its expected monthly quota in September alone.
After the money laundering scandal, Mr. Julian Yip, managing director at Realstar said, “It’s not easy to find anyone to spend over $100,000 a month” The Strait times, reported.
Sellers, landlords, and agents are turning cautious and employing more rigorous background checks and in some cases have actively turned down deals from prospective clients.
During Singapore’s money laundering scandal investigation, ten individuals were charged and five of them occupied high-end bungalows.
Strait Times has further reported on how high-value real estate onwers have become cautious of renting out their properties. The report mentions how owner of a good class bungalow (GCB) turned down someone from Fujian, China, seeking to lease the expensive house for $100,000 a month and was willing to pay all five years’ rent in advance. This decision was made privately, and the person sharing this information preferred to withhold his real identity. Reportedly, the police have also caught many people from Fujian involved in a case of illegal money handling.
Vang Shuiming, one of the charged individuals, resided in a luxurious villa featuring a spacious rooftop pool and a fitness center, nestled within the lush Bishopsgate area, close to Singapore’s top shopping district. According to government-issued rental information, in November 2020, he set a new high by paying at least $150,000 monthly to occupy this lavish home.
The Council for Estate Agencies (CEA) in Singapore has issued guidelines cautioning real estate agents against the use of discriminatory or stereotypical advertising targeting any particular race or community. While there are no statutory penalties for landlords who deny tenancies on these bases, the CEA has made it clear that real estate professionals who do not adhere to these standards may face disciplinary measures.
What is this Singapore Money Laundering Scandal?
Increased customer due diligence in financial as well as non-financial sector is an aftermath of one of the largest money laundering scandals in Singapore. On August 22, the court charged 10 foreign nationals from Turkey, China, and Cambodia for their involvement in forgery, and money laundering, and seized assets worth $1.76 billion, followed by further investigations.
Authorities in Singapore also introduced some robust measures for customer due diligence not only in banking sector but also in other sectors related to luxury goods such as jewelery and precious metals. Some of the prominent financial institutions like Credit Suisse are also under scrutiny of Monetary Authority Singapore for any possibility of their customers being linked to money laundering scandal.
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