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| The government of Singapore plays a strong interventionist role throughout the society, including all segments of the real estate market. Singapore is an island city-state, and urban planning as well as land sales are tightly controlled aspects of government policy. Essentially all aspects of the built environment in Singapore have at least their roots in the urban planning and land use policies of the government. Singapore has had an official land use blueprint called the Concept Plan since 1971. It is revised every ten years. The last full revision was in 1991 and the review process for the 2001 Concept Plan is already well under way. The 1991 review was based on a population of 4 million people. Singapore's population is already at 3.9 million, so the 2001 review is assuming a 5 million-plus population during the next decade. The residential built environment in Singapore is almost entirely the product of government construction efforts. This was a dramatic necessity to improve the conditions of the sprawl of shanty-like dwellings that existed after independence and before the current strength of the Singaporean economy had been achieved. Singapore's planners have the advantage that 90% of the country's citizens own their homes. The Housing and Development Board (discussed below) subsidizes sales to encourage owner occupancy, as well as having constructed 86% of the residential units occupied by the country's citizens. The government also allows citizens to borrow from the centralized pension system for home purchase, another incentive that has helped push the percentage of owner-occupiers to such high levels. There are active efforts that will be continued with the 2001 Concept Plan to renovate not just the older residential units (primarily multifamily) but towns, neighborhoods, retail and other commercial spaces, as well as pedestrian, cycling, car, and public transport infrastructure. Another infrastructure project in Singapore is the creation of a nationwide broadband high-speed cable network called Singapore ONE. The aim is to bring high-speed Internet access into every home, office, school, and factory in the country. Singapore ONE is projected for completion during 2000.1 The sale of land for development is strictly controlled by the Singaporean government. The amount of land that will be released for development is announced annually. For the year 2000, this occurred in September 1999, when the government made public its decision that land for 7,000-9,000 new housing units would be made available in 2000. The government also specifies the housing type through its choice of land tracts to release. In 2000, the majority of units entering development will be mid-priced units, while a quarter to a third will be high-end units. Only one site will be released for commercial development in 2000 due to the continuing oversupply in that market segment. There have been two changes in this annual process of land release and development. First, developers are now allowed a longer period to complete development of private projects on released state land sites, up to 6 years from 2000 onwards. Second, the government has decided to review its program of land sales at mid-year in order to give itself greater leeway in responding to market conditions, especially speculative bubbles or sudden drops in demand.2 |
| Real estate salespeople in Singapore are required by the national government to be licensed before carrying out a real estate transaction. There is no requirement for periodic training to maintain the license once it has been obtained. The requirements for becoming licensed are as follows: pass specified real estate industry-related courses, carry out ten transactions successfully (probationary period), and be regarded by the authorities as of sound character. There is also an annual license fee. In Singapore, real estate agents represent the seller. The government of Singapore regulates real estate sales commissions. Residential and commercial sales commissions vary from 0.5% to 2% of the sales price. The seller pays the commission. |
| Types of land tenure As a former British colony, English common law is the basis for the legal framework supporting real property in Singapore. All land in the country ultimately belongs to the state. As in the majority of ex-British colonies, the two types of property title are freehold and leasehold estates. In essence, there is no absolute ownership in this system. In practice, though, a freehold estate is owned "absolutely" excepting the powers of the state to exercise police powers and the right of eminent domain. Freehold estates form a small minority of private land holdings in Singapore and are no longer granted by the government. Leasehold is the primary form of land ownership in the country. Leasehold estates are granted by the government, typically for 99-year terms. The 1992 State Lands Act made the 99-year term the standard except for rare exceptions. There are three primary government agencies that plan and regulate land use in Singapore. They are the Housing and Development Board (HDB), the Urban Redevelopment Authority (URA), and the Jurong Town Corporation (JRT). The HDB and the URA issue both commercial and residential leases, with a heavy emphasis on residential, retail, and then office development. The JRT primarily issues leases land for industrial and other manufacturing uses, such as for high-tech industries. Commercial leases for office and retail premises are generally for 3-5 year terms with a renewal right for another term of the same length. Residential leases are mainly for 1-3 year terms. Leases are mostly short term in the marketplace because leases of under 7-years duration are not required to be registered on the title. The dominant form of land registration in Singapore is based on the Torrens system from Australia. In this system, titles are recorded with the Land Titles Registry. As in most countries where the Torrens system has been adopted, the old common law deed title system has not been entirely phased out and a Register of Deeds exists to serve property still held under this method of land registration.3 New town development The centerpiece of the present phase of urban planning in Singapore is the new waterfront town in development named Punggol 21. The town has been designed and is being developed by the Housing and Development Board. The HDB was set up by the government in 1960 as the central public housing authority of the country. From 1960-1998, the HDB has planned and built 20 towns and more than 700,000 homes that as of 1999 formed the housing stock for 86% of the country's population. All aspects of Punggol 21 have been considered and designed towards the purpose of creating strong community feeling within a high-amenity environment. The overall housing mix will be 60% public housing, 30% private housing, and 10% a high-end housing type called Executive Condominiums. Neighborhoods are smaller in size than in other towns. In Punggol 21 the neighborhoods have 1,200 to 2,800 residential units with a common green area and a pedestrian friendly environment. In other planned towns the neighborhood size is more in the range of 6,000 residential units. The neighborhoods in Punggol 21 each have their own common community facilities as well. Pedestrian and cycling paths will link each neighborhood to shops, parks, public transport, and the waterfront. The town will have a Light Rail Transit (LRT) system that should place most residents within 1000 feet (300 meters) walking distance from an LRT stop. The LRT will also link the town into the country's overall Mass Rapid Transit System (MRT). In addition, retail centers will be located at each LRT stop. To make the most of its location, the town will have a coastal park and walking path. Further recreational facilities will be available to the town on an island park connected to the town by a pedestrian and cycling friendly bridge. This island park, called Coney Island, will be a 50-hectare park (0.5 square kilometers) with recreational clubs, camping grounds, and a sea sports center. Punggol 21 is Singapore's first centerpiece town to demonstrate what its wealthy, centrally organized society can offer in the 21st century.4 |
| Foreign ownership of residential real estate is restricted and regulated in Singapore under the Residential Property Act. Foreigners are allowed to purchase condominiums. They are not allowed to own detached homes or apartments in buildings of less than 6 storeys. Exceptions to this rule can be applied for from the Minister of Law. These are granted only in special circumstances, such as when a foreign corporation wishes to purchase housing for its Singapore-based executives. Foreign ownership of commercial and industrial real estate in Singapore does not have any special restrictions placed on it.5 |
| Institute of Estate Agents (IEA) 568 Ganges Avenue #02-100 SINGAPORE 160568 Tel: +65-323-1770; Fax: +65-323-1779 E-mail: iea@pacific.net.sg Internet: www.iea.org.sg Singapore Institute of Surveyors and Valuers (SISV) 20 Maxwell Road 10-09B Maxwell House SINGAPORE 069113 Tel: +65-222-3030; Fax: +65-225-2453 E-mail: info@sisv.org.sgont> Internet: www.sisv.org.sg Endnotes 1 - Mr. Mah Boh Tan, "Urban redevelopment in the next millennium: Trends and challenges for professionals," APREC Singapore '99, Opening Speech, September 20, 1999. 2 - "Developers applaud Gov't land sales plan," The Straits Times (Singapore), Money section, p. 32, September 5, 1999. 3 - Dr. Shi-Ming Yu and Mrs. Amy Lee, "Singapore," chapter 16 in Real Estate Valuation in Global Markets, Gelbtuch, Howard C., and Mackmin, David, with Milgrim, Michael R., Appraisal Institute, Chicago, 1997. 4 - Tan, Tony, "Public housing development & redevelopment into the next millennium," APREC Singapore '99, Technical Paper, September 22, 1999. 5 - U.S. Department of State, Country Commercial Guides, Fiscal Year 1999: Singapore. |
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