Since in the early 1970s, the Singaporean government had a hand in the property market. They gradually imposing a series of thresholds and restrictions on foreigners buying property in Singapore since their country has a limited supply –given the limited land space. This is to ensure the property market is segmented and favours Singaporean citizens over non-Singaporean. They wanted to ensure that the property is at an affordable rate for the Singaporeans to give them a stake in their own country. Nonetheless, foreign talents who wanted to economically invest and financially contribute to purchasing property in Singapore are mostly welcome.
If you’re still dwindling on your option in buying property in Singapore, here is some focal kit that could help dealing with your dilemma:
First of all, you might want to flip the Residential Property Act (Chapter 274) of the Singapore Law for all the need-to-know regulation of sale and purchase agreement especially if you’re a foreigner and new to Singapore. It is an art of challenge –to read the Act- therefore, you might want to scroll down a little bit more for a touch-n-go version of it.
The Pricing of Singapore Property
For starters, the total price of the property divided by the land area is $/psf (per square foot) in square feet. The basic entry price is determined by the basic cost of purchasing a residence with an average of SG$15,251 per square metre, with a 2.83% as a rental yield (how much you’re making on annual basis versus your initial investment). Currently, the metrics place the average investment price change at -3.67% in a single year. However, in the mid-term future, let’s say 5 years from your purchase, the value would increase by 1.72% and it might even leap up to as much as 67.57% in another 5 years times! It is truly a perfect opportunity for a sale in the future.
Prices differ from different type of properties and depend on the landlord or owner conditions. For example the rental for the grade A office could be from SG$9 – SG$11 psf with a 3.5% – 4.5% net yielded. On the other hand, a luxury residential could afford from SG$5 – SG$7 psf with 2.5% – 3% net yielded. The most expensive property sales is usually in Bukit Panjang however, if you take the rental costs into account, properties in Bukit Panjang are no match compared to the properties in Bedok especially; following with Choa Chu Kang, Sengkang, Tampines and Jurong West which are known as exclusively expensive rental region in Singapore.
Foreign Ownership of Property in Singapore
Basically, there are two types of property in Singapore: residential and non-residential area. The residential area can be labelled as restricted or non-restricted depends on the use, type and location of the categories. Foreigners are allowed to purchase the property categorised as “non-residential” and “non-restricted residential” without the approval from the government just like any other Singaporean citizen. The idea of the “restricted residential property” is designed to bar foreigners from this segment of the market. Nonetheless, the Singaporean government made an exception of possibility of owning this property for foreigners who are either PR (Permanent Resident) or make “an adequate economic contribution” to the Singapore state and society. Therefore, if foreigners wish to buy a property categorised in the “restricted residential property”, they need to seek the prior approval from the Minister of Law first with a certain conditions bounded, of course. The conditions are:
- A foreigner is allowed to own “restricted residential property” in Sentosa Cove with the approval from the Singapore Land Dealing Unit and the unit must be use for owner-occupation only.
- A foreigner is not allowed to own ALL the apartments within a building, condominium or executive condominium without the prior approval of the Minister of Law.
- Successful applicants for the mentioned property are only allowed to acquire one “restricted residential property” at any time.
Property a foreigner can purchase ‘with government approval’
Property a foreigner can purchase ‘without government approval’