Can Foreigners Invest in Singapore Real Estate?

Yes, foreigners can invest in Singapore real estate but to protect its supply and control demand, there are some restrictions and regulations in place. The scarcity of land, combined with Singapore’s strategic position as a financial hub, stable economy, and high demand for housing and commercial spaces, results in strong capital appreciation over time. 

With the volatility in global markets and economic uncertainties, Singapore’s property market serves as a “safe haven” asset. Investors from countries with less stable economies, currencies, or regulatory frameworks find Singapore an appealing place to park their capital.

Types of Singapore Real Estate Available to Foreigners

Foreigners are not allowed to buy subsidised public housing, also known as the Housing Board of Development (HDB) flats unless they are Singapore Permanent Residents (PRs), and even then, they must fulfil certain conditions.

1. Condos and Apartments: Foreigners can freely purchase private condos and apartments without restriction. As the most affordable option with the least restriction, this is the most common real estate investment for foreigners in Singapore.
2. Landed Property: Foreigners need to apply for approval from the Land Dealings Approval Unit (LDAU) to buy landed properties (such as bungalows or semi-detached houses). Approval is typically only granted for properties in areas designated for foreign ownership.
3. Commercial Property: Foreigners face no restrictions on purchasing commercial properties, such as offices, shops, and industrial properties. This can be a lucrative area for investment.

2 Things To Take Note Of For Foreign Real Estate Investors

1. Additional Buyer’s Stamp Duty (ABSD): Foreigners are required to pay a higher ABSD rate when purchasing property. The ABSD for foreigners is currently 60% for residential properties, on top of the regular buyer’s stamp duty and other fees.
2. Loan Limits: Foreigners may face tighter loan-to-value limits when borrowing from Singaporean banks to finance property purchases.

Why is Singapore Still Attractive for Real Estate Investors?

Despite these restrictions, many foreigners invest in Singapore real estate due to its stable market and strong rental demand. This is particularly true in prime areas such as Marina Bay, Orchard, and the Central Business District or expat enclaves such as Holland Village, Telok Blangah, and Harbourfront. 

Upcoming development for heartland areas like Punggol to be a Smart Town, where tech power players such as educational institutions and businesses are being integrated, real estate value is expected to become more attractive in the suburbs as well. 

With a large expatriate community, international companies setting up regional headquarters, and the country being a key business hub in Asia, there is a steady influx of foreign professionals and workers who need rental housing. Therefore, a stable rental yield can also be expected. 

Factors like government policies, infrastructure development such as MRT expansions, schools, and malls within proximity, and foreign investment also play a significant role in driving up property values.

On the overall, despite the high initial cost of investment, investors can still profit from Singapore’s real estate.

6 Benefits of Investing in Singapore’s Real Estate

Investing in Singapore real estate as a foreigner offers several distinct advantages when compared to other markets:

1. Thriving Economy and Growth Potential

• Global Financial Hub: As one of the world’s leading financial centres, Singapore has a resilient economy with strong growth prospects, making real estate investments here attractive.
• Strong Rental Market: There is significant demand for residential rental properties due to the large expatriate population and business hub status. Singapore’s robust business landscape and retail and ecommerce markets also ensure commercial properties are in steady high demand.
• Low Unemployment and High Income: A thriving job market and relatively high salaries make Singapore an attractive destination for global talent, maintaining demand for housing.

2. Currency Stability

• Strong Currency: The Singapore Dollar (SGD) is one of the strongest and most stable currencies in Asia, providing additional security for foreign investors concerned about currency volatility in other countries.
• Lack of Exchange Controls: Singapore imposes no restrictions on repatriation of capital or profits, allowing foreign investors to move funds in and out of the country freely.

3. World-Class Infrastructure and Development

• Top-Notch Infrastructure: Singapore’s world-class infrastructure, including efficient transportation, healthcare, and education systems, enhances property values and increases the quality of life.
• Smart City Development: The government actively promotes sustainable urban planning and smart city initiatives, driving demand for high-quality residential and commercial properties.

4. Real Estate Market Resilience

• Minimal Oversupply: The Singapore government maintains tight control over land supply and property development, preventing oversupply that can hurt property values, a common issue in other countries.
• Long-Term Price Appreciation: Property prices in Singapore have historically shown resilience, even during economic downturns, and often provide long-term capital appreciation.

5. Access to High-Value Properties

• Luxury Property Market: Singapore has a thriving luxury real estate market that attracts ultra-high-net-worth individuals, providing opportunities for premium investments with strong international demand.

6. Low Tax Environment

• Competitive Tax Rates: Singapore has a competitive tax regime with no capital gains tax, making it attractive for property investors compared to other countries where such taxes might apply.

Real Estate Investment for Foreigners in Singapore

While Singapore has higher entry costs and restrictions, particularly for residential property (due to the Additional Buyer’s Stamp Duty), the benefits of long-term stability, rental demand, and transparency make it a strong contender for foreign real estate investment compared to many other global markets.

Foreigners who would like to invest in Singapore real estate, Whatsapp to +65 8766 1966 or email to info@iasg.com.sg.