The number of applications by foreigners (including permanent residents) seeking approval from the government to buy landed properties in Singapore

The number of applications by foreigners (including permanent residents) seeking approval from the government to buy landed properties in Singapore rose 30 per cent in 2006 against the preceding year, according to Singapore Land Authority.

‘This was possibly due to the strong economy, a favourable property market and interest in Sentosa Cove,’ an SLA spokeswoman said.

Foreigners including PRs face restrictions in buying landed properties in Singapore and need prior approval from the authorities before they can purchase such properties. Foreigners have to be PRs before they can receive permission to buy landed homes on mainland Singapore; Sentosa Cove is the only location where foreigners who are not PRs are allowed to purchase landed property.

Apart from an applicant’s PR status, sanction to buy landed property depends on his qualifications and economic contributions to Singapore, SLA’s spokeswoman stressed.

SLA declined to say how many applications were made by foreigners/PRs to buy landed property, and how many were approved.

However, based on DTZ Debenham Tie Leung’s analysis of caveats captured by the Urban Redevelopment Authority’s Realis database, foreigners including PRs bought 93 landed homes or 8.4 per cent of the total 1,108 landed homes transacted in Q1 2007, covering both primary and secondary markets, as well as completed and uncompleted properties.

These figures are higher than those for Q1 2006, when foreigners including PRs bought 43 landed homes, or 6.1 per cent of the total 706 landed homes that were transacted. During Q2 1996, at the height of the 1990s property bull run, PRs/foreigners purchased 31 landed homes, or 2.6 per cent of the total 1,188 landed homes that changed hands during the period.

DTZ’s analysis showed that for Q1 this year, PRs bought 86 landed homes while non-PR foreigners purchased seven such homes. The most popular landed homes among foreigners as a whole were terrace houses (45 units), followed by semi-detached (26 units) and detached houses (22 units).

Private apartments/condos - a class of properties where there are no restrictions on purchases by foreigners/PRs (unless they want to buy up an entire development) - made up the majority of private homes bought by foreigners in Q1 this year. In all, foreigners/PRs bought 2,008 non-landed private homes, accounting for 30.3 per cent of the total condos/apartments bought in the period.

In Q1 this year, foreigners/PRs bought 27.2 per cent of the overall 7,731 private homes (comprising both landed and non-landed homes) that changed hands. This share is almost double their 14.1 per cent share back in Q2 1996, when foreigners/PRs purchased 975 of the total 6,932 private residential properties transacted.

DTZ executive director Ong Choon Fah said the growing foreign buying of landed homes in Singapore reflects that many foreigners/PRs are raising their families here.

‘They may find that condos are too small. Very often they buy landed homes in locations close to the foreign/international schools that their children attend, for instance, in Lorong Chuan, where the Australian International School is located, and in the West Coast near the Japanese School,’ she added.

‘Many of these foreigners and PRs say Singapore is a very ‘liveable’ place. If they believe in the future of Asia, they’d want to raise their families in Asia, and Singapore is a good location, from which they can get exposure to China and India because of our connectivity,’ she added.

Since 1973, foreigners (including PRs) have been prohibited from buying landed property without prior government approval. All would-be buyers must seek permission from the Land Dealings (Approval) Unit under the SLA. Typically, it takes about four weeks for approval to be granted, but in the upscale waterfront locale of Sentosa Cove, the time has been fast-tracked to less than 48 hours.

Whether on mainland Singapore or Sentosa Cove, foreigners including PRs can at any one time own only one landed home in Singapore and must occupy it themselves rather than rent it out.

However, being a PR does not automatically mean one’s application to buy landed property will be approved. For instance, if the PR does not have the recognised qualifications or expertise/working experience required by Singapore or has not made any investment in the type of industry/service sector being promoted in Singapore, the application may be turned down. Even PRs who have set up businesses promoted by Singapore may find their applications rejected if their company’s paid-up capital and turnover do not meet certain requirements.

Source: The Business Times, 14 July 2007