Foreign buying extends to landed homes in prime areas

An increasing number of landed homes in Singapore are going to foreign buyers, especially in the prime districts.
Foreigners (including permanent residents) picked up 105 landed homes in Districts 9, 10 and 11 last year, which was 66.7 per cent higher than 2005 and the highest figure since 1995, the earliest date included in the Urban Redevelopment Authority’s Realis caveats database, an analysis by DTZ Debenham Tie Leung shows.
UK nationals were the biggest buyers of prime district landed homes last year, with 18 purchases. Other major buyers were Australians, Americans, Malaysians and Indians.
DTZ highlighted that buyers from India have increased their share of landed home purchases in prime districts from three or fewer transactions a year in the past to 11 in 2006. Similarly, Australians increased their purchases from four transactions in 2005 to 13 last year.
These various nationalities bought prime district landed homes predominantly in District 10.
Foreigners have to be PRs before they can receive permission to buy landed homes on mainland Singapore, and Sentosa Cove is the only location where foreigners who are not PRs are allowed to purchase landed property.
Even then, foreign would-be buyers must seek permission from the Land Dealings (Approval) Unit under Singapore Land Authority. Foreigners, including PRs, can at any one time own only one landed home in Singapore and must occupy it themselves rather than renting it out.
Among the criteria that the Minister for Law will consider when asked to approve foreigners/PRs buying a landed home in Singapore are the applicant’s qualifications and whether the applicant has made or will be able to make adequate economic contribution to Singapore.
Typically, it takes about four weeks for approval to be granted, but on Sentosa Cove, the time has been cut to under 48 hours under a special fast-track approval scheme.
The landed properties that foreigners and PRs may be permitted to buy must have a land area of no more than 15,000 sq ft, although exceptions have been made, with some PRs buying Good Class Bungalows, which have a plot size of at least 1,400 square metres (about 15,070 sq ft).
Foreign buyers may acquire an unlimited number of non-landed private homes - condominiums and apartments.
The only foreigners who may buy HDB flats on the resale market are PRs.
‘So there are regulations in place to guard against foreigners speculating in landed homes or buying landed homes excessively in Singapore as landed properties are a relatively scarce commodity in Singapore,’ observes DTZ executive director Ong Choon Fah.
But the trend of foreign buying of landed homes is set to continue, she predicts. ‘We have to accept it, if we want to be a global city, and if we want to open our doors to attract talent to our shores,’ she said.
The 105 landed properties that foreigners bought in the prime districts last year gave them a 15.8 per cent share of total landed home purchases in these locations in 2006, up from a 12.1 per cent share in 2005.
Islandwide, foreigners bought 249 landed homes last year, up 65 per cent from 2005. The 2006 figure represented 7.2 per cent of the total landed homes that changed hands in Singapore in that year.
Foreigners’ share of landed home purchases last year, whether in the prime districts or elsewhere, is significantly lower than the 23 per cent of overall private home buying they carried out last year.
Source: The Business Times, 30 March 2007