While Singapore’s property market has slowed over the past 15 quarters due to government cooling measures, according to recent reports the private residential property index for 3Q2017 has increased by 0.5 per cent.
Having endured a slowing market for four years, we are now seeing sales volumes of properties rising, with some new launches meeting with strong demand from home buyers and investors. But should you invest in Singapore’s property now that sentiments are slowly starting to pick up?
Property Investment Singapore 2019
Of course, this is the big question on many people’s mind, so here’s a look at why you should invest in property in Singapore, which, let’s not forget, is still one of the top destinations for investing in residential properties.
1. Attractive Rental Income
If you are thinking of investing in a private property to generate rental income, it’s worth pointing out that properties in vibrant areas, for example close to or in the city centre, will generate more attractive yields, giving you a passive income on top of your salary.
According to an article in The Business Times, “Potential investors should still be more concerned with rentability and rent levels rather than place their hopes on uncertain capital gains. One fruitful approach is to consider buying residential property in integrated transit-linked developments – defined as developments with commercial components and direct access to MRT.”
2. Vibrant Mixed-use Developments Attracting Tenants
The increasing popularity of mixed-use developments where commercial and residential spaces are integrated in the same building, is transforming the way many people live, work and play, particularly in Singapore’s CBD.
These developments offer residents easy and convenient access to shops, restaurants, gyms and offices all within the same building as their homes, so they no longer need to take a long commute to commercial areas.
Investing in properties within a mixed-use development can yield better rental rates compared to those in purely residential developments, as they offer a dynamic and vibrant environment for renters.
As well as living within close-proximity to commercial areas, many mixed-use developments have green spaces with pedestrian and bicycle-friendly environments, which can host activities to strengthen the neighborhood’s character and social interaction within the community.
3. Prime Locations Drive Strong Returns
When it comes to property in Singapore, location can make or break your investment. Investing in a property in a prime location can mean more renters, higher rental fees, and better returns. Properties located near or within the city centre are appealing to both city workers as well as many foreigners who prefer to rent a private house than book a hotel, if they visit frequently.
Mixed-use developments are emerging in these prime locations, with Singapore now seeing more residential and retail spaces in an area where soaring towers were previously dedicated to office space only. These new mixed-use properties are giving investors an advantage when it comes to setting their rental fees.
4. Capital Appreciation Over Time
Unlike other investment products, real estate properties tend to appreciate over time – with capital appreciation higher in properties closer to the city centre.
As cities and economies grow, the demand for residential and commercial spaces increases resulting in property prices rising over time. And despite the recent dip in Singapore property prices, Global bank Morgan Stanley believes that property prices in Singapore will double by 2030.
This means that a prime property bought today could be sold for a much higher price in 2030 given Singapore’s rapid economic growth that continues to beat economic forecasts.
Investing in property can be expensive and time-consuming, but with the right mindset and strategy, it can bring big returns. So next time you think of investing in real estate, these reasons will help you remember why you should give it a shot.