I think about this question a lot, as we all know the rental rates in Singapore have skyrocketed recently, and it pains me to pay more for rent than what some of my local colleagues pay for their monthly mortgage instalments. So I often think whether it is worth buying a property as a foreigner. However, there are many restrictions and extra costs involved are often put expat off buying property. Or, we can only buy private condominiums or landed property if it is in Sentosa. HDBs are completely out of the question, which, of course the more affordable option.

So let’s take a deep dive into whether it is worth an expat buying a property here.

One thing that does bring some foreign investors into buying property. Here is how stable and strongly Singapore dollar is. Even during the pandemic, the Singapore dollar continues to be stable, unlike some currencies in Europe and the US.  Last year, in 2022, foreign buyers made up 22.4% of all condominium sales in Singapore. This was quite a shock to me when I found this out, because Additional Buyer’s Stamp Duty (ABSD) for foreigners is at a staggering 30%! 

For example if I was buying a condo, as an expat, at S$1M my total Buyer’s Stamp Duty would be $24,600. Then my ABSD would be $50,000. So in total my costs for this condo would be $1,074,600! That’s a lot of extra cash to put down. And this isn’t even taking into account legal fees and other admin costs!

(Note that if you’re from the States, Iceland, Liechtenstein, Norway, or Switzerland, you don’t have to pay ABSD!)

In a lot of other countries, it’s very popular to flip your properties as a form of side income, or to do as a full-time business i.e., buying a property and selling it very quickly for a profit.

But in Singapore, if you plan to sell your home within the first three years of purchase, you will have to pay Seller Stamp Duty (SSD), which is 12% in the first year, 8% in the second and 4% in the third, so I think twice if you want to start being a home, flipper in Singapore! Your business may not be as lucrative as you think. 

Now, I think that a lot of expats don’t know in Singapore, is that we can actually apply for mortgages, normally with no issues. Usually the ratio is 75%, but can be as low as 55%. Do take note that the cash down payment is usually anywhere between 5% to 10%. However, although it doesn’t sound too bad, remember that interests are not exactly in our favour right now; you’re looking at our interest rate of about 3.65% – 4.25%, which means that if you are wanting to purchase $1 million property, your mortgage repayments could easily be around $7000 a month.

Looking at these numbers, I can look at it from both sides of the coin; this mortgage repayment is what a lot of people are paying as their monthly rental in Singapore. So if you are planning to stay in Singapore long-term, it’s actually a good investment because the property belongs to you, it’s not like you’re lining the pockets of a landlord by paying this in rent. But, if you’re only here short-term, perhaps it’s best just to suck up the large rental amount! 

The last thing I want to talk about, is the longevity of your home in Singapore. Unlike many other countries, whereby when you buy the property, it is yours forever, and you can use it as an ancestral property to pass down to your children et cetera, this may not be the case in Singapore. Most properties here are 99 year lease, including a lot of condos. Looking at PropertyGuru, it’s very difficult to find condos nowadays that are freehold. What I mean by this, is that it is owned by the buyer for life; it can be passed down generation to generation. If the property is a 99 year lease, then in theory, it has to be given back to the government after the 99 years is up. Not only does this mean that the property cannot be passed down multiple generations, but it also means that as a property becomes older, it can often lose its value, because buyers in the market know that at some point, it will have to be returned to the government. In my opinion, this is one of the reasons why a lot of expats are put off buying in Singapore. But now we see a lot more countries adopting this concept, especially with over population. And to be honest, I don’t think I would want to give my future generations an old dilapidated apartment, anyway. The buildings here are not like back at home, where they can last for hundreds of years, so to me, this is not much of an issue. If anything, I think it encourages the property market. It means that once the three years & SSD is up, you can sell your property and get a new one and upgrade.

So it’s kind of like a long-term flipping process. Instead of staying in one property that may become very rundown.

If I were to conclude on my thoughts as to whether it’s worth a foreigner buying a property here in Singapore, there are a few things. I do think it is worthwhile if they are planning on staying long time in Singapore, also because in future this could look good on their PR application as they are already rooted in Singapore. Moreover, I always think it’s good to be paying for your own asset, instead of paying rent to a landlord! And with rentals being crazy prices right now, it works out to be more cost-effective if you are going to be staying here in the long run, even with the additional taxes and stamp duty. However, if you’re wanting to use it as an investment property, and don’t really have intentions of staying long-term in Singapore, then it may be a better idea to look for properties elsewhere. Nearby Southeast Asian countries have less regulations in terms of the costing for foreigners, and the properties are larger and much more affordable, meaning you can turn that into a nice passive income for rental.

These are just my opinion is but what do you think about buying a property in Singapore as a foreigner?