It will now be tougher for permanent residents (PRs) to purchase landed homes, with the government making the criteria for non-Singaporeans looking to buy such properties more stringent.
(Authorities expect foreign ownership of landed property to be kept at 4% with the tightened criteria.)
Because of this, Law and Foreign Minister K Shanmugam expects the number of approved applications by PRs to drastically fall. Speaking to reporters, he said, “We have always taken a very strict approach as to whom we will allow... This year we tightened [the restrictions] even further. I think probably fewer than half of those who have previously qualified under the already strict criteria probably now qualify. I'll be surprised if approvals are more than 50 per year.”
Mr Shanmugam did not let on the specific changes made to the criteria.
The issue of foreign ownership of property has been a hot topic of late, with reports showing a significant percentage of private housing being taken up by PRs.
Currently, PRs seeking out landed property have to apply to the Singapore Land Authority’s Land Dealings (Approval) Unit, where they will be assessed based on factors such as professional qualifications, work experience and investment in Singapore. The minister emphasised that approval depends on economic and social contributions, as well as the applicant’s commitment to Singapore. According to Mr Shanmugam, it is quite unlikely for an application to be approved “unless you make a very, very significant economic contribution or your family is rooted in Singapore and, say, your children are doing national service”.
PRs are not allowed to buy landed housing with more than 15,000 sq ft, meaning they are effectively restricted from purchasing a Good Class Bungalow. Non-PRs can only purchase landed homes at Sentosa Cove.
Figures provided by the Ministry of Law say about 230 applications for landed property purchase come from PRs each year, around 140 (or 60%) of which receive the go-ahead. Said Mr Shanmugam, “We have kept foreign ownership of landed property in Singapore to under 5%... It's actually closer to 3.5%.” According to a spokesperson from the Law Ministry, this percentage has not significantly changed in the past three years.
Mr Shanmugam explained, “We’ve made the criteria very strict because our belief is that landed property has to be primarily for Singaporeans and the exceptions must be very rare. For the foreseeable future, what I’ve said in Parliament is that we'll keep it to 4% or so.”
Offering his two cents is managing director of RealStar Premier Group William Wong, who told The Straits Times that PRs comprise some 20% of the landed property seekers his agency sees per month. He said, “Over the last few years, more and more PRs have been trying to buy landed property: They believe that it preserves more of its value due to the limited supply, and it's a more stable and reliable investment option.” His agency sells 10 to 20 such properties monthly.
On a related note, Mr Shanmugam pointed out that restricting foreigners from buying landed property does not equal restricting the prices of such homes. “How the developers price it, that’s not within our control.”
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Related Categories: Legal Matters, Private Residential
Tags: K Shanmugam, Ministry of Law, permanent residents, private property trends in Singapore, PRs, regulations for buying property, Singapore Land Authority, Singapore landed property, Singapore private property, SLA
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