As one of the most developed countries in Asia and holding the 9th position as the most developed country in the world in 2019, according to worldpopulationreview.com, do you know that Singapore is one of the most sought-after countries in the world that the ultra-rich prefer for their real estate investment?
This year, in 2019, British Billionaire, James Dyson has purchased the most expensive penthouse at Wallich Residences located at Tanjong Pagar Centre with a hefty price tag of S$73.8 million. Shortly after that, he is approved by our local government to purchase a lavish freehold good class bungalow (GCB) located at Bukit Timah for S$43 million.
Sometimes, you may wonder, Singapore, a country that hardly can be seen on map, yet is so well advanced as compared to many huge countries out there. A country that the rich will love to call home.
What exactly does Singapore have that win over others?
Here are the top 7 reasons why the rich people in the world want to invest in property in Singapore.
1. Stable Government and Sound Political Environment
No one will want to set up its business or invest in real estate in a country with unstable governance or political unrest. Singapore, a little dot on map and barely has any form of natural resources, knows that in order to stay highly competitive, it needs to be extraordinary in some ways.
Stable and transparent government, zero government corruption and sound political environment is what set it apart from many others.
2. Strong Currency
All along, Singapore currency has been rather stable with minimal fluctuation. These days, property in Singapore is very unlike the past where you can buy for flipping intention. With property regulations like Seller Stamp Duty where you need to hold property for up to 3 years, it takes a longer time for property to appreciate.
As a foreigner investing in real estate in Singapore, not only will you experience capital appreciation in the long term when the property is sold and with Singapore currency kept stable or even appreciated against your home currency, you are able to benefit from the currency exchange.
In a way, as a foreign investor, you gain from the capital appreciation of the property and also from the currency exchange if Singdollar has appreciated against your home currency.
3. Property Price Stability
Low interest rate, demand surges, property price increase. This is the cycle that happens in Singapore where people, be it local or foreigners jumping on the bandwagon of buying spree. When this happens, developers are quick to increase their unit prices. Soon, it may come to a point that financial prudence is being thrown in the wind and everyone just want to get a share of the property and banks are just happily giving out loans so long the applicants have the relevant income document to support the loan amount.
If this cycle continues without any deliberate intervention from the government, it will come to a point where the property prices climbing high beyond the affordability of its citizen and leading to a bubble burst.
Since 2010, the Singapore government has introduced a series of cooling measures to cool and establish its property market, from introducing Seller Stamp Duty to Additional Buyer Stamp Duty (ABSD) . All these measures are put in place to weed out speculators where properties are bought for pure speculation purpose and causing property prices to skyrocket.
With tight cooling measures in place, it really helps to keep the property prices stable and attracts those genuine buyers into the market.
Because we foresee that these cooling measures will stay for the long term, it has somehow changed the property environment in some ways. Honestly, I see that capital appreciation in Singapore property will be slow in the short term but it will tend to appreciate in the long term due to the following factors:
- Land scarcity in Singapore will naturally push up the land cost
- Inflation over the long run
- The future of Singapore in the next 10 years has been drafted out in URA Masterplan 2019. It provides predictability to the future of Singapore and it will attract investors who love stability and predictability in places where they make their property investment.
In short, property prices in Singapore is stable and incremental in capital appreciation because demand is always there for its property and with intentional intervention from government, it really helps to keep its prices in check and much less volatile.
4. No Capital Gain Tax on Property
In Singapore, when a property is sold, you are not subjected to any capital gain tax, unlike in some countries, you are subjected up to 20% of capital gain tax on your property sold. So, we are considered lucky that any capital gain from the sale of your property is not taxable. For more information on this, check out on our IRAS website
5. World Class Education System
Singapore has very limited natural resources that it can rely on. The only resource that it can rely on is its people. They need to be highly well-educated in order to provide a world-class workforce to attract big companies to set up their business in Singapore. That explains why for so many years, Singapore’s education system is among the best in the world. This is also the reason why there are so many people worldwide will prefer to send their children to study in Singapore.
However, as disruptive technology continues to sweep across the globe at a rapid speed, the Singapore government sees that the future workforce has to be adaptable, innovative, creative, entrepreneurial, and well-equipped with relevant digital skills. The fundamental changes need to start at its education system. No longer can its existing educational framework be able to produce a workforce that the future needs.
Singapore government is quick to make the necessary changes in order to keep itself highly relevant to cater to the changing needs of big companies required in order to come to set up business. With big players willing to set up business in Singapore, it will definitely help to boost its property market.
6. Developed Infrastructure
Changi Airport voted as the world-best airport, serves as a transport hub for Asia and the rest of the world. Well connected to 380 cities. With Terminal 4 added, Terminal 5 underway and its captivating mall, The Jewel, newly opened in 2019, it strives to provide the best convenience and luxury travelling to the rest of the world for its travelers.
Not to mention that $2.42 billion has been invested to transform Tuas Terminal into a major seaport where it will have the capacity and capability to serve double on the maritime trades that it uses to handle previously.
Within Singapore itself, infrastructure has been enhanced to improve on its connectivity. More double-decker buses have been added, waiting time for bus has been shorten, MRT train networks will be expanded to make the whole island so much more accessible.
Not only that, Singapore and Malaysia have strived to reduce the traveling to and fro Kuala Lumpur from Jurong East to as short as 90 minutes.
Singapore has gone through enormous effort to review and improve on its infrastructure constantly to provide the best form of connectivity and convenience to the people who stay or work in the country or people transiting to other parts of the world from Singapore.
Personally, I feel that excellent infrastructure in place is important for its smooth operation of businesses and for the daily life of its people. Not much time will be spent on travelling and instead, it can be spent with friends and family, hence improving their quality of life. This is one of the key factors that will attract people to stay in Singapore.
7. Advanced Medical Facilities
Singapore has one of the most advanced medical facilities that you can get, especially in Asia. This is especially important for those affluent medical travelers who are able to travel and willing to pay for high cost for such advanced medical treatment that they seek.
Not only that, traveling to Singapore for such medical treatment is so convenient since it is well connected to many parts of the world. Singapore is such a lifestyle place to stay that prompted many to buy property as vacation home so that during those times that they need to drop by for some medical care, they have their own home to stay.
Besides Hong Kong, Singapore is also considered one of the most expensive countries in Asia for property investment. However, it still attracts many investors from all over the world to own a piece of it. To them, they are not just buying a property. But rather, they are buying the stability of a country, an assured deliverance of a future promised by the government, property price stability and a prestigious symbol of status and affluence.
