LOANS FOR FOREIGNERS TO PURCHASE RESIDENTIAL PROPERTIES

Mr Tay Beng Chuan asked the Deputy Prime Minister whether his Ministry will, in line with the current efforts to attract foreign talents, allow foreign citizens working on employment pass in Singapore to obtain bank loans in Singapore dollars to buy a residential property for the purpose of owner-occupation.

BG Lee Hsien Loong: The restriction on foreigners obtaining Singapore dollar loans to purchase residential properties was part of the package of measures the Government introduced in May 1996 to curb speculation in our property market. The overall package was effective in cooling the property bubble.

Most of the anti-speculation measures have since been lifted. However, the restriction on Singapore dollar loans to foreigners to buy residential property remains. The Government has left this in place as a signal that it does not encourage speculation in the property market, especially by non-Singaporeans using borrowed funds. The restriction does not in practice cause a problem, because employment pass holders who take up permanent residence become eligible for Singapore dollar property loans. Those who do not take up PR probably do not plan to stay on for the long term in Singapore, and are unlikely to want to buy property for owner-occupation.