28 Dec 2016
According to data from the Urban Redevelopment Authority, in the first three quarters of 2016, a total of 18,330 new and resale homes were sold. This is 14.6 percent higher than sales in the corresponding period in 2015. Many of these purchases seem to be investment driven as recent new project launches have been driven by the sales of one and two bedroom units.
Photo: OUE TWIN PEAKS
Property owners, especially those who bought for investment purposes and are looking to rent out their units, should bear in mind certain pertinent points before committing to a purchase.
Firstly, demand for rental homes come predominantly from foreigners. It is likely that foreigners who are able to afford private residential rents would be in Singapore on the Employment Pass. However, it is imperative that buyers who bought with the intention of letting out the units be aware that there may be increasingly less new rental demand coming from foreign manpower going forward; as our economy adjusts to become less reliant on them.
Next, owners need to know what is it that this group of expatriates are looking out for in a rental home. Most foreigners who rent small units are here in Singapore alone for work. Thus, in looking for a suitable place, they will pick one which has ease of transport. As such, property investors would do well to purchase a unit in a project which has at least one of the below locational attributes:
- In the city fringe, so that tenants have relatively short commuting times to the city centre for work and leisure
- Near a commercial cluster, as expatriates working in these commercial areas will be looking to rent a place nearby
- Near public transport nodes, so as to minimise travelling times
Amenities wise, having them within a short distance away greatly enhances the attractiveness of a rental property. For instance, shopping malls or eating establishments nearby provides them with the convenience of dining out or buying food home. Having a supermarket around is also a plus point as tenants can buy household items easily.
While going by these general guidelines makes it easier to spot a good investment property, we must still urge buyers to be cautious. One should consider attractive properties to invest in to minimise risks.
