Foreign investors are allowed to purchase apartments, condominiums, commercial and industrial properties. They are however forbidden to buy landed properties and HDB (Housing and Development Board) properties; permission however are granted under certain conditions (Sentosa cove).
Buying process
There is no restriction for the purchases of properties in the primary or secondary market as long as the above criteria are met. There are two payment schemes available in the primary market (new/off the plan projects). For a deferred payment scheme, a 5% option is placed with the vendor and a two week period is given for the exercise of the option. A further 8 weeks is given for the purchaser to arrange financing. The remainder 5% or 15% (depending on the scheme) is to be paid. For a normal payment scheme, progressive payments are made at different stages of construction of the project, a 5% option is paid at the option stage followed by the balance 15% 8 weeks later. Payment is made in accordance with the progress of the project. On the secondary (resale) market, a 1% option is paid followed by the same arrangement as above depending on the amount of loan taken. There will be no progressive payments as the property is completed. The bank loans will proceed once the contract is completed.
Financing
There are general guidelines when evaluating the debt serviceability of the loan granted by the bank. The below criteria is first applied. monthly installments/gross monthly income= not more than 30%
If criteria is not met the second formulae will be applied, it is as follows: monthly installment+other loans/monthly gross income=not more than 60%
For high net worth individual different criteria applies, his asset backing.
