FOREIGN BUYERS OF PRIVATE RESIDENTIAL PROPERTIES IN SINGAPORE

Abstract

Foreign investment has played a major role in the economic development of Singapore. However, in the private residential sector, foreign investment has often been overlooked; perhaps due to lack of statistics as such information are not published because it is considered confidential by the authorities. The number of foreign buyers in the private residential market is on the rise. The general profile of these buyers was looked into to see their motivation for purchasing the local properties. The more pertinent reasons for the trend include the political and economic stability of Singapore, capital appreciation of property, high rental income, no capital gains tax, low interest rates, strength and stability of Singapore dollar and also for education reasons. Generally, these foreigners purchase mainly apartments or condominium units partly because of restrictions imposed on them by the Residential Property Act 1976.

The majority of the foreign buyers are the Hongkongers, followed by the Malaysians, Indonesians, Japanese and Taiwanese. These buyers normally purchase apartment and condominium units in the central area where the prime residential areas in districts 9, 10 & 11 are favourites among them. In view of the likely further increase of foreign buyers in the near future, developers will have to compete more aggressively among themselves for potential foreign buyers. To remain competitive, it is important for developers to understand the various factors that influence foreign buyers when choosing their dwelling units. It embodies three main aspects: locational, physical and cost selection criteria.