Creme de la creme: The authorities have stopped giving PRs approval to buy landed homes in Good Class Bungalow Areas. - PHOTO: ARTHUR LEE
[SINGAPORE] The number of approvals granted to permanent residents wanting to buy landed homes on mainland Singapore has fallen sharply, since the authorities further tightened the eligibility criteria in 2011 to ensure these scarce properties remain the primary preserve of Singapore citizens.
The Singapore Land Authority told The Business Times that the number of such approvals fell from 145 in 2010 to 117 in 2011 to just 31 last year (the first full year after the tightening). In the first six months of 2013, only six applications received the nod.
Back in October 2011, Law Minister K Shanmugam had indicated that the number of approvals given to PRs to buy landed homes would fall by more than half to no more than 50 per year.
Since the authorities raised the bar some time in 2011 on eligibility criteria for PRs to buy landed residential properties, about two-thirds of approved applicants are married PR couples with children who are also PRs. "Where these couples have sons of National Service-eligibility age, the sons are serving or have served NS," said an SLA spokeswoman.
"Given the scarcity of landed residential properties in Singapore, the government's policy has always been to ensure that such properties remain the primary preserve of Singapore citizens."
Foreigners who wish to own landed homes in Singapore must first seek government approval. On mainland Singapore, the minimum criterion is that they must be PRs. In addition, "they have to meet very stringent criteria that reflect significant economic contribution and rootedness in Singapore", said the spokeswoman.
If approval is given, it is restricted to one landed residential property with a site area not exceeding 15,000 square feet. The property must be for owner occupation and cannot be rented out.
In addition, approved applicants must hold the property for at least five years, up from three years previously. Market watchers believe this change was effected sometime during the second half of last year.
Around the same time, the authorities stopped giving PRs approval to buy landed homes in Good Class Bungalow Areas. Previously, they could do so if the land area did not exceed 15,000 sq ft.
The spokeswoman added that where a Singapore citizen wants to co-own and live in a landed residential property with his or her PR spouse, "we will consider such applications favourably, so as to ground the family unit in Singapore". However, the PR spouse is not allowed to own another landed residential property here.
RealStar Premier managing director William Wong said: "In our business which focuses on selling bungalows and semi-detached houses in Central and Eastern districts of Singapore, we've seen an all-round drop in PRs buying. They used to make up about 20 per cent of buyers for our cases in 2009 and 2010. Now they hardly account for 10 per cent, and even then they are in non-GCB Areas."
Newsman Realty managing director KH Tan added: "These days, there are hardly any PRs buying bungalows in GCB Areas, but it's OK as there are still many Singaporean buyers including new citizens who have sunk their roots here."
Jason Tan, executive director at JTResi, which specialises in the luxury condo market, says he has come across PRs who could not get permission to buy landed properties turning instead to big apartments/condo units and penthouses in non-landed developments.
Foreigners, whether PRs or not, are free to buy private apartments and condos anywhere in Singapore.
The figures on approvals for PRs to buy landed homes do not include Sentosa Cove, which remains the only place in Singapore where non-PR foreigners may buy a landed home, although still subject to government approval.
"Sentosa Cove is an exception as it was specially developed to attract influential and high net worth individuals to have a stake in Singapore," said the SLA spokeswoman.
There is no holding period requirement for approved applicants. And the 15,000 sq ft cap also does not apply, although the site area is taken into account in assessing applications, she added.
"As with mainland (landed) properties, approved applicants can only use the property for owner occupation and not for rental. In addition, they cannot own more than one landed residential property, whether in Sentosa Cove or mainland Singapore."
Purchases of landed homes by foreigners - in Sentosa Cove and mainland combined - form a small proportion of the total number. There were 4,355 caveats lodged for purchases of landed homes in all of Singapore in 2010, according to CBRE's analysis of Urban Redevelopment Authority data. This fell to 3,340 in 2011 and 3,054 last year. In the first half of this year, 851 caveats have been lodged.
SLA also said the proportion of landed residential properties in Singapore (including Sentosa Cove) owned by foreigners (including PRs) has declined from 3.5 per cent in 2011 to 3.3 per cent in the first quarter of 2013.
"We will continue with this strict approach to only approve applicants with significant economic contribution and rootedness in Singapore," said the spokeswoman.
URA data shows that the number of completed landed private residential properties in Singapore stood at 70,145 at the end of 2011 and 70,578 at the end of Q1 this year.
For sale: The estate sale will be conducted via a closed tender, which will be launched on Aug 6, with closing date on Sept 9 - PHOTO: DTZ
[SINGAPORE] A Good Class Bungalow (GCB) at Chancery Lane is on the market, a sign of piquing interest in the area which saw a number of significant sales in recent months.
The indicative price for the one-storey freehold property, which is being marketed exclusively by DTZ, is around $39 million, subject to offers. This translates to about $1,630 per square foot (psf) based on its land area of 23,932 square feet.
Located within the Bukit Tunggal GCB enclave, on-site is an old house built in the 1980s. The site is expected to be redeveloped.
Nearby amenities include Novena and Newton MRT stations. It is also within a short distance of Mt Pleasant MRT station which is part of the Thomson Line, due in 2021. Schools in the vicinity include Anglo-Chinese Primary School, St Joseph's Institution, and Singapore Chinese Girls' School.
The estate sale will be conducted via a closed tender, which will be launched on Aug 6, with closing date on Sept 9.
This sale comes on the back of other transactions in the area.
Chancery Garden, a three-storey block of 10 apartments and townhouses built in the early 1980s, was sold for $41 million in July. This works out to $1,391 per square foot based on the site's land area of 29,468 sq ft.
Located on one of the highest points in Chancery Hill, the site, which was sold to a boutique developer with experience in building strata landed homes, is zoned for two-storey mixed landed houses upon redevelopment, under Master Plan 2008.
In May this year, the estate sale of 30 Chancery Lane - the home of the late S Rajaratnam - saw the property change hands for $28.5 million. This translates to $1,378 psf on its land area of about 20,688 sq ft.
A nearby bungalow at Bukit Tunggal Road on the other hand fetched $17.5 million, which works out to $1,664 psf based on its land area of 10,516 sq ft.
While the overall market is slowing down, in particular with the imposition of the Total Debt Servicing Ratio (TDSR), there is still ample liquidity which has fuelled demand for GCBs.
Indeed, with the TDSR mandating higher capital outlay, investors and/or end-users will probably be looking at the higher-end of the market given that the mass market segment has enjoyed a long run-up in prices primarily due to low interest rates, said DTZ.
