How to Spot Undervalued and Profitable Properties in Singapore: A Guide for Savvy Investors
As one of the world’s leading financial hubs, Singapore is a highly attractive destination for property investors. Whether you’re a first-time homebuyer, a seasoned investor, or simply looking to add to your investment portfolio, there are tremendous opportunities in the Singapore property market waiting to be discovered.
Singapore’s property market has been on the rise over the years, with many families and property investors searching for ways to invest in the property market. However, finding properties that offer long-term growth potential and value can be tricky, especially if you don’t know what to look for.
In this article, we’ll be sharing with you the properties that have the potential to incur financial losses. These real-life examples are currently happening in the real estate market. Do take note of which properties could be detrimental to your investment and learn from these valuable lessons.
1. Compare Entry Price And Land Breakeven Price
When looking for undervalued and profitable properties in Singapore, doing your homework is essential. This means researching the developer and the land breakeven price of the project you’re interested in. Investing in a project within the Central Core Region (CCR) doesn’t guarantee immediate or substantial profits. Let’s explore the Eon Shenton project, a renowned CCR development offering breathtaking sea views and a premium lifestyle.
Situated in Tanjong Pagar, at the heart of CBD, this property was expected to have high rental demand and profitability.
However, the arrival of the Covid-19 pandemic shortly after its completion greatly impacted rental demand, leading to a significant decline.
So, what caused this predicament for property owners? Many owners purchased the property at a peak price without realizing it would decline in the future.
As an investor, it’s natural to be enticed by the show flat setup. However, it’s crucial to refer to the developers’ breakeven prices to assess the project’s investment safety.
Let’s compare it with Stirling Residences, for example. The breakeven prices of the land versus the entry price of the project are quite close, explaining why data suggests that 100% of Stirling Residences owners are making profits, while Eon Shenton has 93% of owners experiencing losses.
2. Type of Units Available & Size of Development
Understanding the different types of property units and their impact on investment profitability is crucial. Let’s take The Parc Condominium as an example. This development offers a diverse range of units, from 1-bedders to 5-bedders, ensuring all owners have the opportunity to profit.
As each seller aims for higher prices, the resale volume of a larger development like Parc Condo naturally increases, influencing the resale price.
Imagine purchasing a 2-bedder during the launch at $1192 per square foot and later reselling it at $1582 per square foot. This sets a benchmark for future prices, creating a ripple effect that relies on sufficient volume to boost sale prices.
On the other hand, let’s consider Viva Vista, a smaller-scale development consisting only of 1 and 2-bedders.
This limited unit variety not only restricts owners from experiencing significant gains due to smaller floor sizes but also exposes them to potential losses. Considering these factors, Viva Vista may not be an ideal project to consider due to the relatively higher risk involved.
3. Regulatory Landscape in Singapore
Singapore boasts a robust regulatory environment, ensuring stability and predictability for property investors. Staying informed about regulatory changes that may impact property investments is crucial. For example, alterations to Additional Buyer’s Stamp Duty (ABSD) or Seller’s Stamp Duty (SSD) can influence demand and potentially lead to price fluctuations. It’s also important for investors to stay updated on any regulatory shifts that could affect the Singapore property market. Recently, the government implemented cooling measures like higher stamp duty for foreign buyers and policies limiting additional property purchases for Singaporean citizens. By staying aware of these changes, you can adapt your investment strategies to maximize returns in uncertain times. Invest wisely, and seize opportunities in Singapore’s dynamic property market!
To ensure a well-informed property purchase decision, it is crucial to consider three key factors: unit type variety, larger development scale, and a safe entry price. These factors help unlock the true value of your property and protect against making a wrong purchase. Armed with these valuable tips, take action today and make a smart move towards one of the greatest investments in your lifetime! Feel free to reach out to me on WhatsApp for a personalized consultation on your property investments. With assistance from this trusty article, may this be one of greatest investments in your lifetime!