Luxury Real Estate in Singapore: What Should Foreign Investors Know

Singapore achieved independence a little over 50 years ago, and only has an area of 719.9 square kilometers.  Though it has relatively been a short time only, Singapore is doing well on so many fronts. And one of these is its real estate sector, particularly the luxury real estate in Singapore, which is blooming, and has caught the eyes of many investors locally and from overseas.

As a foreigner, Singapore’s real estate industry can be a rewarding addition to your investment portfolio regardless of whether you opt for the residential sector or the commercial one.  Invest now when the time is right, and you can enjoy massive returns down the road. And if you choose luxury real estate in Singapore for investment, your future cash flows will be markedly better.

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The government introduced a series of cooling measures between 2010 and 2013 which led to a decrease in prices by around 12%.Since then, the market has favored the buyers.  In recent times, the activity levels are ever high, especially for luxury real estate in Singapore.  The new developments are more costly, but then they also offer greater returns.

At Century 21, we work closely with all developers of luxury real estate and have access to all newly complete and under construction luxury homes in Singapore. If you are interested to explore the luxury real estate market, let us organize a non-obligatory viewing tour for you. Click here to leave a message

Should you invest in Leasehold or Freehold?

Being a foreigner, you can invest in both freehold and leasehold luxury real estate in Singapore, which are usually on a 99 or 999 years, and are then reverted back to the government or in some occasions, to the land owner. The costs for freehold properties are around 15% to 20% more, yet they are sought the most in the luxury real estate sector.  Since their demand is high, you can expect greater capital gains than you can expect from leasehold properties.  The rental income, is however, the same for the two. If you compare both of them using annual yield, then leasehold property will perform better because of the lower price, and therefore, you’ll be able to bag higher percentage returns annually.  But freehold luxury real estate in Singapore are more beneficial in the long term for investors because they appreciate at a faster rate. Plus, en-bloc chances are higher, and the sale prices can be dictated by the owner.

The home supply in to the luxury real estate in Singapore is good these days, so that means you have plenty of choices. Talk to a real estate agent who is experienced in buying for foreigners, and they’ll guide you more about neighborhoods, appreciation values and other details.

How do you define luxury real estate in Singapore?

A property can be classified as a luxury real estate in Singapore based on several factors like the location, size, price, layout and amenities.

  • Location: A luxury home is usually situated in a prestigious area or street.  For foreign buyers in Singapore, this is usually Orchard Road, Sentosa Cove and Marina Bay.
  • Price per Square Foot: The most expensive homes in Singapore are in the Orchard Road district.  The starting price for a 2 bedroom luxury condo is around 2.5 million.
  • Space: Space both on the inside and the outside make a home premium. A small apartment, built over an area of 500 square feet in a prestigious area, would not be considered a luxury.  At the minimum, these homes should have at least two bedrooms and an area of 1200, 1700, 2500 or 3000 square feet for 2, 3, 4 and 5 bedrooms, respectively.

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Where should you start searching for homes in the market for luxury real estate in Singapore?

The housing sector of Singapore can be broadly divided into two classes: one is purely residential and the other is mixed, including malls and offices with the apartments. The two most luxurious and the priciest sectors are Marina Bay and Orchard Road, located in the central and southern areas of the city. Most of the luxury properties in the Orchard Road area can be found at Ardmore Park, Nassim Road, Cuscaden Road, Cuscaden Walk, Paterson Road, Tomlinson Road, Cairnhill Circle, Leonie Hill   and Grange Road. The average prices in these areas are around $2,500 per square foot.

You can also search for homes in Sentosa Island, where the average prices are $1800 per square foot. Spread out over 117 hectares of lands right by the sea, Sentosa Cove is among the most prestigious oceanfront communities in the world. Property types include bungalows, terrace houses, cluster homes, condos and high rise apartments, which are offered on a 99 year lease period. The Waterfront Villas at Sentosa Cove are among the most popular.  The total bungalows are 214 in all located in the North Cove or the South Cove, facing the South China Sea, the Tanjong golf course and the waterways.

Bear in mind that the landed houses at Sentosa Cove may be available to foreigner, you would have to apply for a approval from Singapore Land Authority as

What other things should you look into?

Once you have some options available, consider a few other things before you make an investment in Singapore’s luxury real estate market.

Consider tenants’ perceptions

Think about the tenants who would be living in your properties. If they are young and working, they would want to be close to their office and all public transportation access points, and would prefer bars and high-end restaurants close by. Married tenants would be more interested in schools and playgrounds. Think about the tenants and ascertain that the area would appeal to them.

Think about the future

Go through reports and other online data to check future development that is scheduled in the area. This will have some impact on your property value in the years to come.

What kind of rentals should you expect?

On an average, you can expect a rental yield of about 2% to 3.5% for a luxury condo in Singapore, for a seafront villa in Sentosa Cove , the average rental income is around $25,000 a month. However, as a foreign owner of a villa in Sentosa Cove, you would not be eligible to rent out your villa.

Which luxury properties are more popular among foreign buyers?

With the restriction on foreign owners renting out their landed house in Sentosa Cove,, luxury condo become the top choice when buying a luxury real estate in Singapore as a foreigner.

Reignwood Hamilton Scotts

Located along the prime Scotts Road off the tourism shopping belt of Orchard Road, Reignwood Hamilton Scottsis an iconic landmark that stands out because of its car porches that are built high up in the sky. Meticulously and sophisticatedly designed, this building comprises of 54 apartments and 2 penthouses.

Le Nouvel Ardmore

Le Nouvel Ardmore is a freehold development, located within the prestigious Ardmore Park neighborhood.  Featuring 33 storeys, every floor only has two apartments. This is by far one of the most luxury apartment in Singapore.

New Futura

New Futura, comprising a twin towers of 36-storey each, is situated at Leonie Hull Road, offering 124 luxury condo ranging from 2 bedroom to 4 bedroom and lifestyle amenities. This is the first luxury condo open for sale in the year 2018.

Hire a real estate agent!

Foreign investment can be tedious, especially if you are interested in the luxury real estate in Singapore. If you hire real estate agents like Century 21 who have help many buyers make successful investments, you’d be in safe hands.

We offer many services to foreign buyers, helping them throughout the purchase process. Once the deal is closed, we can even help you find and manage tenants, and that too at no fee, if you buy through us.

Browse our website or call for more information.

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Author: Nic Ee

Nic is the Executive Director and Key Executive Officer (KEO) of CENTURY 21 Property Agent Singapore Pte Ltd. Nic starts his real estate career in 1995. He focuses in providing real estate services specifically to international high net-worth individuals and corporate clients. His expertise includes luxury home finding, property investment planning & acquisition, managing buy to let property, expat home finding and tenant representation for office space.

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