Numerous opportunities are available in case you wish to invest in properties in Singapore. As a foreign investor however, caution has to be taken before you part with your money. In other words, you need to be equipped with how to buy the said property. It is recommended that you make use of a property agent in Singapore, which agent will guide you through the buying process.
Tips for foreign investors:
- Foreigners in Singapore are able to buy non landed properties such as condominiums and apartments minus having to obtain prior approval from the government. Nonetheless, regardless of this rule, permission from the Singapore Land Authority needs to be sought in case you wish to buy landed properties such as semi-detached houses, bungalows, and vacant plots.
- Foreigners are also restricted from buying an HDB shop house, a resale HDB flat that is permitted by the HDB, a condominium that is bought under the Executive Condominium Housing Scheme of 1996, and an HDB house directly from the HDB.
- In case you are a permanent resident then you are legible to buy HDB flats directly from the HDB, as long as you are part of a family nucleus with a Singapore citizen. In addition to the direct buy, as a permanent resident, you are also eligible to buy an HDB flat from the resale market as long as you make it a point to enlist at least one inhabitant as a Singaporean citizen or permanent resident.
- Permanent residents are legible under the Executive Condominium Scheme, buy property in projects that are in their sixth to tenth year of the Temporary Occupation Permit or TOP. On the other hand however, foreigners and corporate bodies can only buy Executive Condominium property following the eleventh year of the Temporary Occupation Permit.
What you should consider before buying a property in Singapore:
- Why you are buying the property. In case the property to be bought is for investment, then you need to put into consideration the capital gain. Property that is bought for owner-occupation on the other hand need not necessarily look into capital gain. For the case of owner-occupation, factors that need to be considered include the projected size of the household in the future.
- Housing Type. There are numerous housing types available which makes it rather difficult to focus on buying just the one. As a buyer, you need to look at the type of house and whether or not it suits your purchase needs.
- Potential investment of HDB flats. Although technically, HDB flats are intended for living purposes as opposed to speculation, investment potential is often looked into. This is irrespective of the fact that they are subjected to a Minimum Occupation Period (MOP) of 5 years whether for a resale or direct purchase from HDB in a bid to put a stop to house flipping. When the MOP elapses, owners of larger HDB flats tend to make a profit by downgrading to a smaller unit. This means that most people with HDB flats tend to profit from renting them out. With the exception of overseas owners however, current regulations call for the owners of subsidized or non-subsidized HDB flats to meet the5-year MOP requirement before they can be allowed to rent out their flats.
- Potential investment of private housing. Private properties carry less stringent rental rules than HBD flats. A number of Singaporeans tend to rent out their private properties while they live in HBD flats once the MOP period is over. This is because it is possible to own both private properties and HDB flats at the same time. This however doesn’t make it easy to flip property.