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The ongoing property boom, coupled with indications of growing foreign interest in Singapore, prompted Goldman Sachs to call for the removal of controls on foreign ownership of landed property - and speculate that such a policy change is likely on the cards.

In a report released on Sunday, the investment bank argues that relaxing the curbs, set in 1973, that require foreigners to seek official approval before buying a landed home would spur further foreign buying - which saw a surge last year - and close the price gap between bungalows and luxury apartments, and just overall give the already-buoyant property market a fillip.

The Law Ministry has since come out to quash any such hopes (that developers, in particular, might have harboured), saying that ‘landed properties have to be treated as a special category’ in land-scarce Singapore, and there are no plans to liberalise foreign buying restrictions. Be that as it may, the matter strikes - beyond the property market - also at issues of hearth and home for Singaporeans, and debate on it will no doubt surface again from time to time. And, in making its case, Goldman Sachs made some notable points.

It suggests, for instance, that free and full access to landed housing would attract more foreigners to town. That’s highly arguable, not only because what usually moves executives and professionals to relocate halfway around the world are, first and foremost, career and business opportunities, not quite housing options, especially where there is no serious lack of choice in a well-developed city. Particularly for the rich and super rich - or at least those who would go for landed homes - there is a good enough range of luxury apartments here, and many rent.

In any case, the landed property curbs, to begin with, are not exactly highly onerous : Foreigners are not absolutely barred from buying; they can buy, subject to approval, which is usually granted. They are just obliged to stay in the house for at least three years, not rent it out or sell too soon, and they may not own more than one landed property at a time.

It is easy to see how a full relaxation of the curbs could inject a strong speculative element to this segment of the housing market - given all the wealth out there - and how it would easily be priced out of the reach of even upper-income Singaporeans, particularly during an upswing. As it turned out, foreign ownership of prime-district houses (in districts 9, 10 and 11) grew 67 per cent last year to an 11-year high - and this excludes, of course, Sentosa Cove, which foreigners can freely buy. It would be quite a different matter if land is plentiful and abundant in Singapore as it is in the US or Australia.

But here on this island nation of barely 700 sq km, that is actually highly anxious to get its share of foreign talent, being slightly possessive about landed property ownership is nothing xenophobic at all. Most foreigners would understand that.

Source : Business Times - 29 Jun 2007

Letter from Dr Huang Shoou Chyuan

RECENTLY, there have been reports in the media pushing for the restrictions on the sale of landed homes here to foreigners to be relaxed. I hope the authorities quickly nip this in the bud before too much public disquiet arises.

Goldman Sachs (Singapore) is lobbying for the rescindment of the Residential Property Act which has, since 1973, restricted foreigners and Permanent Residents from owning landed residential property without prior official approval.

The investment firm argues that this change would serve as a catalyst for further foreign purchasing of private homes as well as boost the current residential property up-cycle. To further support this argument, it implies that Singaporeans already have a stake in the country by virtue of the public housing catering to 80 per cent of us.

I doubt anyone in Singapore really feels that the property market requires any more encouragement. If anything, the reverse is true — in fact, the authorities are probably contemplating measures to cool the red-hot market and bring it down to a more sustainable level.

Goldman Sachs’ reference to public housing also comes across as being slightly condescending to me.

I agree with the industry’s opinion leaders, who were quoted to be mostly against this proposal. Government Parliamentary Committee for National Development and Environment chairman Charles Chong was quoted as saying: “Landed properties should not be priced out of Singaporeans’ reach (or) it could lead to disgruntled Singaporeans.”

Others, meanwhile, said that the existing Act has the positive effect of “encouraging foreigners to commit to Singapore, to sink their roots here” and that landed property ownership is one of the “privileges of being Singaporean”.

In American author Pearl S Buck’s The Good Earth, the protagonist Wang Lung chides his sons when he overhears them talking about selling the land which he loves so much. In his words: “If you sell the land, it is the end.”

Source : Today - 29 Jun 2007

SINGAPORE has no plans to open up its landed property market to foreigners, Minister for National Development Mah Bow Tan said yesterday.

He rejected a suggestion from investment bank Goldman Sachs, which was reported in the Singapore media earlier this week, that there was a high chance the Government would soon ease curbs on foreigners buying landed homes.

Speaking to reporters during a four-day visit to the north-eastern Chinese city of Tianjin, Mr Mah said any change to the rules would deny Singaporeans a chance to own such homes, which are in short supply in the land-scarce country. ‘Landed property has to be treated as a special category. It is important for us to maintain certain privileges for our citizens.’

Under the Residential Property Act, foreigners and permanent residents are barred from buying landed properties without government approval. Those who get the nod can own only one landed property at a time and they must occupy the home, not rent it out.

Source : Straits Times - 28 Jun 2007

There  has been disturbing talk in the media recently that the restrictions on foreigners buying landed homes in Singapore could be relaxed.

I hope the authorities would quickly nip this rumour in the bud before there is too much public disquiet.

Goldman Sachs (Singapore) is lobbying for the rescindment of the Residential Property Act, which has, since 1973, restricted foreigners and permanent residents from owning landed residential property without prior official approval.

Goldman Sachs argues that this change would serve as a catalyst for further foreign buying of private homes and boost the current residential property up-cycle. To further support this argument, it implies that Singaporeans already have a stake in the country by virtue of public housing catering to 80 per cent of us.

I doubt anyone in Singapore really feels that the property market requires more encouragement. If anything, the reverse is probably true and the authorities are probably contemplating measures to cool the red-hot market to bring it to a more sustainable level.

Goldman Sach’s reference to public housing also comes across as being a tad condescending to me.

Hence I agree fully with the industry’s opinion leaders, who were quoted to be mostly against this proposal.

Mr Charles Chong, chairman of the Government Parliamentary Committee (National Development and Environment), was quoted as saying: ‘Landed properties should not be priced out of Singaporeans’ reach (or) it could lead to disgruntled Singaporeans.’

Others said that the existing Act has the positive effect of ‘encouraging foreigners to commit to Singapore, to sink their roots here’ and that landed-property ownership is one of the ‘privileges of being Singaporean’.

In Pearl S. Buck’s The Good Earth, the protagonist Wang Lung chided his sons when he overheard them talking about selling the land which he had loved so much. He said: ‘…if you sell the land, it is the end.’

Dr Huang Shoou Chyuan
 
Source : Straits Times - 28 Jun 2007

The recent report and recommendation by an American bank that the restrictions on foreigners to purchase landed property be lifted is something which I feel the majority of Singaporeans would be up against.

Additionally the economic arguments are flawed. The report seems to imply that lifting the restrictions will reduce the supply crunch and help control prices.

I think lifting the restrictions will have detrimental effects - landed property prices will experience sharp jumps leading to an even greater frenzy in the property sector. Cost of living and cost of business will jump again, leading to higher inflation and further reduce our cost-competitiveness.

However, the most important factors against it are the sociopolitical effects.

Singapore is a country owned by Singaporeans. If the restrictions are lifted very soon, Singaporeans will be renting from foreigners to live in Singapore, leading to alienation and resentment among the population.

Lifting the restrictions belittles the privileges of citizenship too.

In the same way that National Service is expected only from citizens, certain rights and privileges should continue to be reserved for citizens.

David Ng Boon Kiong
 
Source : Straits Times - 28 Jun 2007