No plans to relax rules on foreign purchase of landed property: MinLaw
By Daryl Loo, Channel NewsAsia | Posted: 27 June 2007 2201 hrs
SINGAPORE: The government has no plans to relax the restrictions on foreigners buying landed properties here.
In reply to queries from Channel NewsAsia, the Ministry of Law says such properties have to be treated as a special category in land-scarce Singapore.
Earlier this week, US investment bank Goldman Sachs had called for the restrictions to be lifted, arguing that the move will help boost the property market.
There are strict rules on the sale of landed homes here, which include bungalows and terraced houses.
Foreigners, including permanent residents, are prohibited from buying such property without prior approval from the government.
Golden Sachs is arguing that relaxing the rules can help Singapore's efforts to attract foreign talent, and spur greater foreign interest in the residential property market.
Says Leslie Yee, Executive Director, Asia-Pac Investment Research, Goldman Sachs, "Landed residential property offers significant upside potential. We actually highlighted that in terms of…the luxury end of the market, a bungalow on the ground can cost you some 35 per cent less than a bungalow in the sky, which are these apartments.
"And so whether or not the government does relax anything on foreigners, buying landed property in Singapore - it's obviously a matter of speculation and of debate. But [where] value play is concerned, this is certainly one sector that we think is interesting to look at."
In response, the Ministry of Law says there are no plans to liberalise the system, and that landed properties are seen as a special category.
Some observers say it is not just a matter of dollar and cents, but that there is some national pride involved as well.
Says Colin Tan, Head of Research, Chesterton International, "For a high-rise apartment, you are basically buying the right to the air space. For landed property, you're actually buying both the land as well as the building. For most countries, land is sacred, so it's not just in Singapore. You don't want to get up one morning, and then find that the whole country is in foreign hands."
Under the rules, foreigners have to become PRs to get permission to buy landed homes in Singapore, with the sole exception of Sentosa Cove.
Also, they can only own one landed home here, and must occupy it rather than rent it out.
"If you say that the foreigners prefer to stay in landed properties, well they can always opt to rent them. They don't have to buy them. But if they really like Singapore so much, they can always become citizens and so be eligible to buy these properties as well," says Tan.
Foreigners accounted for a quarter of all private home purchases in the first three months of this year. - CNA/yy