Here in Singapore, one of the most popular investable asset classes is undoubtedly real estate, which has proven itself to be a reliable and fairly consistent vehicle for returns over the years. Just take a look at HDB flats, for example━in just the short 5-year Minimum Occupation Period (MOP) alone, some BTO owners have managed to effectively double their investment, with 100% profit.
However, property investments in Singapore do come with their fair share of limitations. Apart from REITs or commercial property, the only other avenue would be HDBs, condos or landed homes, all of which are slapped with considerable restrictions or limitations to control the market from spiralling out of control. As such, overseas property investment has gained popularity amongst Singaporeans in the last few years.
If you’ve always been wowed by that villa in Bali or apartment in the heart of Melbourne, here are 5 popular countries that Singaporean investors flock to for overseas investment property.
Important things to take note before diving into overseas property investment
While it can be tempting to jump straight into buying an overseas investment property, there are some very important things to consider:
1. Can you actually buy an overseas investment property?
Contrary to popular belief, your current property ownership status here in Singapore does actually affect your property purchasing ability overseas, and vice versa.
If you currently own a HDB flat, you will have to first meet your Minimum Occupation Period of five years before being able to purchase an overseas property. If you are a PR, note that you will have to sell your HDB flat within six months of buying a property overseas. There is no such requirement for Singapore citizens.
Beyond Singapore, other countries may have their own set of regulations to manage overseas investments in their domestic property market. This will affect the buying criteria and options available for you. Here’s a non-exhaustive list which gives you an idea of some purchasing restrictions overseas:
- Australia: foreigners can generally only buy new dwellings (i.e. new residential projects, or those that are part of a development with 50 or more dwellings that have not been occupied for more than 12 months) or vacant land.
- Bali: while foreigners can buy property in Bali, only Indonesians can buy the land which the property sits on. As such you will most likely have to partner with a local company or citizen to invest in property.
- London: as far as we know, there are no restrictions for foreigners.
2. What are your financing options?
As you know, if you are buying any property here in Singapore beyond your first, you are slapped with what is known as the Additional Buyers Stamp Duty (ABSD), which starts at a hefty 20% for second properties and 30% for third and subsequent properties. Naturally, this is a significant consideration when it comes to property investing in Singapore, because an initial “cost” of 20% can severely dent potential profits. The good news here is that overseas investment property does not factor in for ABSD calculations.
That said, do bear in mind that you cannot use your CPF OA funds to fund overseas property purchases. Assuming you can’t pay for a million-dollar property upfront in cash, you’re most likely looking at taking out a mortgage loan, either with an overseas-based bank or a local bank. Overseas banks have their own set of eligibility requirements for foreigners, so be sure to do your research. For local banks, remember that the loan you take out will factor in for your Total Debt Servicing Ratio (TSDR) status.
3. What is your investment plan?
As with any investment endeavour, you need to have a game plan on how to maximise your returns. How long do you plan to hold your property for? Are you going to rent it out? Will you eventually be relocating to that country and living in your property? These are important questions to ask yourself.
1. Australia
Image credit: Destination NSW
It is probably no surprise that Australia ranks as the top country that Singaporeans are buying investment properties in. After all, it’s one of more popular travel destinations for Singaporeans, and many Singaporeans have also studied at one of the universities there.
As you can probably guess, the top cities that attract a decent amount of foreign investment are Perth, Sydney, Melbourne, and Brisbane. These cities house some of the top-rated universities like University of Western Australia, University of New South Wales, Monash University, and University of Queensland, which attract a very large volume of foreign students every year. This essentially means a booming rental market, which is music to the ears of property investors.
If you are keen on investing, you can check out some of these exciting new projects, which are usually open for investment opportunities.
Image credit: Realestate.com.au
If beachfront living is something you’ve always dreamt of, you can check out The Dunes, a luxury beachfront apartment residences project that’s currently under construction and expected to be completed in 2026.
Image credit: Realestate.com.au
If you would rather live in the city, there are upcoming projects such as 111 Castlereagh, another luxury residential development located at Martin Place, in the heart of Sydney’s CBD, which boasts impressive views of Hyde Park and Sydney Harbour.
In terms of eligibility, foreigners can only purchase new dwellings━essentially brand new or relatively new residential developments━or vacant land, under the condition that construction on the land will be completed within four years. They will also have to seek approval from the Foreign Investment Review Board (FIRB).
2. London
Image credit: Royal Lancaster London
Another popular holiday destination with Singaporeans that’s also a hotspot for university is London. Apart from international university students, London is also home to a thriving expat community that lives in and works in one of the busiest cities in the world.
A report by the Office of National Statistics in July 2024 showed that the average price of renting a private home in London rose 9.7% in the preceding 12 months, with sky-high rents resulting from a shortage of places to rent, while demand remains strong due to people being priced out of the owner-occupier housing market.
Because of this high demand for rental properties, foreign investors are undoubtedly keeping a close watch on good deals in the London property market. According to real estate organisation Savills, the gross rental yield for a UK property within the city centre is currently at 3.53%, versus only 3.08% for Singapore, London is thus certainly a prospectable destination for real estate investment.
With no real limitations for foreign investors, there are plenty of options available:
Image credit: Zoopla
You can consider a luxury one-bed-and-bath apartment in the heart of the London Bridge precinct, which is a very good location especially if you’re looking to rent your flat out to working professionals who work in the city centre.
Image credit: Zoopla
If city centre properties aren’t viable because of the accordingly higher costs, then you can also consider properties in areas further out of the main London city. Think of it as the Woodlands, Punggol and Tampines areas that lie outside of the central region. One such example is this cute little two-bedroom apartment, with an open plan living and a private balcony.
3. New Zealand
Image credit: Erskine Owen
Technically, New Zealand has one of the strictest restrictions when it comes to foreigners buying property domestically. In fact, non-resident foreigners are prohibited from purchasing homes in New Zealand━except for Australians and Singaporeans.
There are a few advantages to investing in a New Zealand property compared to here in Singapore. For starters, most of Singapore’s properties have a 99-year leasehold, whereas in New Zealand, a higher proportion of developments are freehold, so you can rent out your property for a longer period. Unlike Singapore, there are no stamp duties on property purchases, and so that’s one less cost to factor in on your investment.
According to residential property developer Williams Corporation, more than 35% of the New Zealand population rents their residence, and so property investors are presented with an extremely consistent and stable rent income. Plus, it’s one country that’s popular among retirees, so having a property that you can eventually move into in the future can be an attractive prospect.
A brand new 1-bedroom apartment in Auckland City going for NZD$795k (~S$607k).
Image credit: Colliers NZ
There’s also a wide variety of categories of real estate you can invest in New Zealand. Your usual suspects would be residential properties like apartments, condominiums, and townhouses. That said, you can even invest in land━yes, this includes farm and agricultural land.
4. Bali
It’s probably safe to say that most of us have been to Bali at least once, and would have stayed in a large private villa complete with swimming pool or even lawn. In recent years, the amount of foreign investment that has been pouring into the small tropical Indonesian island has been steadily increasing, as more and more prospective investors are lured by the rising popularity of Bali as a short-term travel destination, or even longer-term stays.
Image credit: Balivestor
Unlike other countries, your property investment options in Bali are unfortunately quite limited. You’re probably looking at investing in holiday villas and renting them out to travellers on holiday, or digital nomads looking to stay in Bali for a longer duration. The bigger concern is your eligibility to purchase property; under Indonesian law, only Indonesian citizens can buy land, even though foreigners can own the property on the land and a lease on the land itself. As such, you will most likely have to partner with a local property developer or citizen to be able to invest in property.
Image credit: Balitecture
The silver lining is that the costs are actually quite affordable. A decent apartment unit can be purchased for around USD$150,000 (~S$204,853), and a furnished villa can go for as low as USD$350,000 (~S$477,991). Thanks to a booming tourism market, rental demand can easily be sustained year round, ensuring that you’ll get a consistent stream of rental income. In addition, property developers would also usually include property management services as part of the investment package. This is useful, as then you won’t have to fret over things like maintenance and arranging rental periods.
To get started on investing in Bali property, check out property developers such as Balivestor. They regularly publish their plans for upcoming residential projects such as private villas, and are always looking for investors to fund their projects.
5. Malaysia
Last on our list for overseas investment properties is none other than our neighbour across the Causeway, Malaysia. It probably goes without saying that Malaysia is extremely popular with Singaporeans to travel to or even live in, given our geographical proximity, history, and ties. Many of us have travelled there for a quick weekend trip or longer getaway, while the lower cost of living has indeed been a draw for those of us looking to retire in a country with a slower pace of life than Singapore.
Image credit: R&F Princess Cove
Understandably, Johor is probably one of the top picks for investors from Singapore, given the proximity to Singapore as compared to other cities like Kuala Lumpur or Selangor. Upcoming initiatives such as the RTS Link between Singapore and Malaysia, and the Johor-Singapore Special Economic Zone, will also have a positive impact on the overall property sector. For example, new ultra-luxurious developments such as Skypark Kepler, advertised as being just 20 minutes to Singapore, are looking to be massively popular with Singaporeans.
Compared to other Southeast Asian countries, Malaysia is actually quite flexible and open to foreign investment, especially when it comes to land. Foreigners can own land, though there is a minimum investment amount that differs from state to state, along with possible further restrictions. For example, the minimum purchase requirement of land starts at MYR1 million (~S$303,352) for some states, whereas in places like Selangor, the minimum amount is MYRmillion (~S$606,674). Furthermore, foreigners are only allowed to purchase landed properties if they’re in gated communities.
Do bear in mind that financing options can be a bit complex as there are a few requirements to navigate. For example. If you are below 50, you are required to have liquid assets of at least MYR500,000 (~S$151,645), and a minimum offshore monthly income of MYR10,000 (~S$3,032). Furthermore, you need to have a fixed deposit account containing at least MYR300,000 (~S$91,072) with a Malaysian bank in Malaysia.
Image credit: Hedgethink
In terms of investment options, the choices are quite similar to those in Singapore. You can invest in condominium apartment units, landed property, and even commercial property. Finding out more about the options available is relatively straightforward━most real estate agencies here in Singapore have a Malaysia presence as well, so you can easily contact them to find out more.
Popular countries for Singaporeans to buy overseas investment properties in
Regardless whether you’re planning for a future retirement home, a property for your kids when they study overseas, or are simply looking to expand your investment portfolio, buying an overseas investment property is a pretty good option that you can consider. Just make sure to have your finances in order, and find out about all the fine print before you take that plunge.
Check out our other articles on property investing:
- How we bought a retirement home in JB for MYR700,000
- What you need to know about property investing, from a real estate agent
- Best JB neighbourhoods under 35 minutes from the Causeway
Cover image adapted from: Balivestor, Colliers NZ
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