Plans by the Monetary Authority of Singapore to scrap its Financial Investor Scheme (FIS) are unlikely to dampen foreign investors’ appetite for Singapore residential properties.
Property agents said this is because such property investors contribute less than one per cent of overall residential property transactions in Singapore.
The scrapping of the FIS may be viewed as yet another measure to curb Singapore’s red hot property market.
Under the scheme, foreigners who wish to apply for permanent resident status can choose to invest up to S$2 million in properties in Singapore, out of a total investment of at least S$10 million in Singapore assets such as bonds or equities for at least five years.
Mohamed Ismail, chief executive officer of PropNex, said: “The FIS…was actually never intended to target foreigners to come in to buy the S$2 million property. It was more towards a PR status. What we have realised here is that foreigners are interested to invest in Singapore properties for its right fundamentals, regardless whether they get PR or not.”
But agents admit Singapore could lose some of its attractiveness from foreign investors who are solely interested in seeking permanent residency status.
Tan Kok Keong, director for Research and Consultancy at OrangeTee, said: “There are still a lot of wealthy people who believe in the growth of Asia and the growth of Asia’s economy, so in that light, I think Singapore would play a very important part of their asset allocation, which means that over the medium and long term, we still think that all these rich people will still find residence properties worth investing in to ride on the growth of Asia.”
Some agents are instead worried about changes in the Global Investor Programme (GIP) that is administered by the Economic Development Board (EDB).
Angela Lee, managing director of Lianco International Property, said: “They are more concerned (about) taking it as a platform and bringing their children here to study. At the same time, they are doing a one-stop service by bringing the business back to China as well. So, S$2.5 million is a lower platform for them to start with…”
Under GIP, a foreigner has to invest S$2.5 million in a new company in Singapore or expand an existing business that has an annual turnover of at least S$30 million.
These changes are expected to be announced by EDB on April 15.
Source : Channel NewsAsia – 11 Apr 2012