The easiest way to compare transaction prices in an area and surrounding properties is to reach all surrounding districts. A common precursor to ripple effects is when a price difference of five percent or more is found between one area or neighbourhood and the next in the area. A cruder approach is to look at properties that have appreciated significantly in the last year, such as Paya Lebar.
Be on the lookout for properties in such areas, as chances are they have been revitalized thanks to their neighbours. There may also be a good chance that the surrounding areas will benefit in the next year or two.
New MRT stations, business centres and shopping malls are revitalizing sleepy areas and driving up prices. Finding tenants for your property can be difficult. Expensive hipster cafes and quirky art galleries in old neighbourhoods are being touted by well-heeled tenants willing to pay higher rents. With distressed properties being auctioned off by bankruptcy trustees, you can sell valuable real estate at a low price and make immediate capital gains.
When it comes to investing, I would like you to know that most Singaporeans hope to invest in property when they can afford it. It remains one of the top investment choices given the historical returns of property investment in this country with dwindling land and the evidence that property is a great investment opportunity for the wealthiest people in the country. But investing in property comes at a high price. In Singapore, it isn’t easy to buy an investment property without deep pockets. There are several ways to have your cake and eat it, beyond the traditional way of buying property.
Purchasing a physical property is not the only way to invest in Singapore’s lucrative property market. In fact, many options require less capital, have a shorter investment horizon and offer a more liquid market. Before getting started, check out our recommended online trading platforms.
This guide is for you if you are thinking about buying a second home or investment property in Singapore. Investing in property is one of the most popular ways to grow your money in Singapore – not least because it’s the only thing you can spend your CPF savings on. For most ordinary Singaporeans (not CEOs, ministers, investment bankers or heart surgeons), the two main ways to get rich quick are winning the lottery or buying property in Singapore and hoping its value skyrockets.
Property in Singapore generates positive net returns in appreciation and foreign exchange earnings over the medium to long term. One of the main reasons private equity funds of the world’s wealthiest people buy buildings and properties is the intelligent dollar.
Low-interest rates have done their part to drive up house prices, thanks to the efforts of the vigilant Monetary Authority and Singapore government. Singapore is a haven as it is the most liquid market in Asia and is known for trusts and Singapore institutions. Property in Singapore costs a premium as returns are very low for owners who rent out their properties. Nevertheless, condominiums in Singapore are cheaper than $14,000 to $18,000 per square foot (sq ft). There is no premium in global cities.
Round-trip transaction costs are also lower in Singapore. See our analysis of property transaction costs in Singapore compared to the rest of Asia. Taxes and fees: rental income tax in Singapore is higher than rental income, and non-resident “net rental income” is taxed at 22%. Property tax, insurance, maintenance and repairs are deductible from gross rental income. The gross rental yield in Singapore remains low at around 30%.
In general, property prices in Singapore are closely linked to the government’s infrastructure initiatives. Prominent examples include the High-Speed Rail (HSR) in Jurong and Johor Baru, the Singapore Rapid Transit System in Woodlands, and new MRT stations along the roads.
In general, improved transport infrastructure has a significant impact on property prices, especially when it comes to new MRT stations within walking distance. In addition to improved transport infrastructure, buildings with nearby amenities such as shopping malls, prominent schools and public libraries also drive up property prices. In the housing market context, purchase prices should below (or at least reasonable), and sales prices should be high.
This may mean, for example, that you buy a property in an area with good growth prospects, but you don’t necessarily like it. That’s a good thing because development over the years can pay off in the long run. You can take advantage of the value by buying homes that are priced low because of their location and that you can get to within a 90-minute bus ride to your job. You can also buy in places that are far away.
Many people say they get rich by investing in real estate. But it takes investment to make money, not the opposite.