Expats turn to new style of properties in Singapore

25 August 2010 - Increasing numbers of foreigners are shunning apartments and condos in favour of buying ‘landed properties'- meaning that the property is set on a good sized plot of land - in Singapore...   

The term 'landed property' usually refers to a property that generates income for the owner without the owner having to do any work on the estate or property - for example, a tenant farm.  But in Singapore, it refers to the land area the property comes with, or the size of the section it is built on.

New research from Knight Frank has revealed that these buyers, many of whom are expats, are looking towards the districts of Katong, Telok Kurau and East Coast Road to buy such properties, as opposed to the previously popular District 4, where transactions happened predominantly at Sentosa Cove.

Foreign buyers must be permanent residents if they are to buy a landed home. Sentosa Cove is the only place in the country where non-resident foreigners are allowed to buy landed homes, but this is still subject to approval by the Land Dealings (Approval) Unit, among other conditions.

While foreigners picked up more landed homes in the second quarter of the year than the first three months, they bought fewer private apartments and condos, the latter slipping by 7.4 per cent. Knight Frank chairman Tan Tiong Cheng said foreigners' strong interest in landed homes reflects their growing recognition of such assets as a prized commodity in land scarce Singapore. "The increased interest is not surprising as landed housing offers many foreigners a lifestyle closer to what they are used to in their home country," he said. "The added attraction is that Singapore is a very safe place, so landed housing is as secure as, say, a gated community," he added.

William Wong, managing director of RealStar Premier Property which specialises in selling landed homes in east and central Singapore, said permanent residents, after living in Singapore for a few years, tend to realise it is worthwhile investing in landed property.
"Bungalow prices on per square foot of land basis are still lower than apartment and condo prices in the same location. On top of that, the supply of landed homes is more limited than that of condos and apartments. Landed homes also tend to maintain their value better, as the main component of, say, a bungalow's value would be the land it sits on, whereas apartment and condo values may depreciate faster as the property ages," he explained.

Wong said landed property transactions started to pick up in June and July after a slow period in March and May. Prices are also rising with demand. In District 15, bungalows in the Mountbatten and Meyer road areas can easily sell for about $1,000 to $1,100 per square foot of land compared with around $900 per square foot towards the end of 2009. And in District 10, for example in Coronation Road or Namly Avenue, a bungalow is selling for about $1,200 to $1,300 per square foot now, from $1,000 to $1,100 per square foot at the end of 2009.

The Knight Frank research also shows that foreign buyers have increased their total share of landed home purchases, up to seven per cent in the second quarter compared with 6.3 per cent for the first three months of the year.