When it comes to real estate investment in Singapore, , you will probably hear different views from different people all the time regardless they are layman or analyst. One thing for sure, your most important goal is to make money! Let us dive a little deeper & ask ourselves where & what are we going to invest in?
Years ago, experts were saying that investors will not go wrong if they put their money in residential properties. Then came the Additional Buyers Stamp Duties (ABSD) implemented by the government in December 2011 for residential properties. Experts & investors switched their focus to commercial properties. They reckon that it is greater potential compared to residential properties since there is no ABSD component. Many of them started snapping up commercial properties. There are also a handful of them buying into shophouses within the Central Business District (CBD) despite many of these are leasehold 99 years. That seemed to be the hottest trend then, with many units bought & sold within one year. Many of these transactions doubled in price & crossed the $10 million mark! But that is not all! Investment strategies changed again when commercial real estate hit the peak & started slowing down. There were much focus on new condo launches. Consumers’ seminars became a weekly event conducted by mega real estate agencies. “Asset Progression” also became a word that was loosely used by many real estate people. They will gladly share with their prospects on how they can sell their property & buy another two units using various methods. Still, it does not end here. Others came up with more creative ideas to help people own multiple properties. The scheme somehow came under fire as it meant, “own a share in multiple properties with conditions attached”. The truth is, every investment has its risks! Is there a way to minimise the risk? Absolutely!
These are some of the questions you need to ask yourself before parting with your hard-earned money.
When it comes to investing in your right product using the right strategy, there is no cookie-cutter formula that is suitable for everyone. Let’s look at some of these opportunities.
NEW CONDO LAUNCH
Unlike many years ago, many homebuyers prefer buying a freehold or a leasehold 999 years tenure. These days 99 years leasehold developments have become very much acceptable. Investors who are switching their property portfolio every few years could explore this sector. Until the full loan has been disbursed by the bank upon the issuance of the Temporary Occupation Permit (also known as “T.O.P.”), the initial monthly repayment could be minimal at the beginning. With the prices of each new launch higher than the previous, it seemed that buying & holding for three years before selling could be another form of investment strategy.
Unlike a brand-new condo, resale units are also attractive for many homebuyers & investors, be it for their own stay or rental income. Based on the per square feet (p.s.f.), resale units should be lower than brand new ones in the same vicinity. Many investors prefer resale units as compared to buying brand new ones from real estate developers. They believe prices are more negotiable & occasionally, they might even come across a “fire sale” by desperate sellers who might want a quick sale & willing to compromise on their pricing.
If you are an existing owner of an old house or a plot of land which can be subdivided into two or more units, we have in-depth knowledge & market analysis to assist you in this venture. After all landed property is one of our main focuses for almost three decades.
Many business owners have diversified into real estate development over the years for a simple reason. Singapore real estate market has many upside & importantly, is to get it right. Not just the location, but the layout, design & even the choice of finishes. This was something we shared with our three experts in our webinar “Everything You Need to Know About Buying, Financing & Building Your Dream Home”.
ENBLOC POTENTIAL PROPERTIES
“En bloc” also known as a collective sale is originated from a French word that means “in a lump, or block”, “as a whole”, or “all together”. Singapore has seen many successful en bloc sales since the early 2000s. It usually happens for older developments built more than 20 years ago whereby the floorplate of each unit is much bigger than the norm for newer developments these days or perhaps there has been a change in the URA MasterPlan which allows a higher density or height restriction. Sellers are still subject to Sellers Stamp Duty (SSD) if the property is sold through en bloc within three years from their purchase date. Regardless of the size or the tenure of the development, investors buying into enbloc developments have to do their homework as the timeline could be as long as two years.
LONG TERM RENTAL INVESTMENT
Investors who fall under this category usually buy the property to rent it out. The rental income collected during the initial years can be used to service their home loan. Landlords will only have to deal with other expenses such as maintenance or sinking funds once the home loan is fully paid. The rental market for the Singapore property market has been stabilising with a consistent flow of supply & demand. Real estate investors are advised to explore the surroundings if they are looking for long-term investment since different areas & categories of properties may differ in results.
WHY RESIDENTIAL PROPERTIES
You may wonder, why is our focus very much on residential properties? The truth is, every one of us needs a roof but not every business needs an office. As of the Year 2020, there are approximately $1.37 million residential properties in Singapore. The manageability & affordability of residential properties also makes it easier for most investors.
WHY CHOOSE US
Having been in the real estate business since 1992, we have seen many cycles & identify the opportunities regardless if it is an upward or downward trend. We also provide a detailed analysis to help you make a better decision. But that is not all! We also work closely with our partners from various industry including bankers & lawyers, ensuring your investments are in good hands. Do note that every investment has its own risk. Come & have a chat & let us understand better how we can serve you more efficiently when buying, selling or investing in your next property in Singapore. We are confident & highly capable of meeting your needs & expectations.