Why real estate a good asset class to invest in Singapore?

What are asset classes for investment? Asset class for investment as below-mentioned:

1. Cash and cash equivalent

2. Equity like stocks and bonds

3. Commodities

4. Real Estate

5. Derivatives

Real Estate as an asset class for investment

When we want to buy our next dream home, we consider factors like location, distance to schools, amenities and facilities. Also whether to buy new condo launches in Singapore or a resale property? Unpacking the topic of new launch condo vs resale property and how it will affect your investment decision.

Resale property offers larger floor plate, immediate occupation and immediate returns if you are an investor. New launch condo provide swanky facilities aim to please with lifestyles services to take care of your well-being. Very often, developers’ pricing strategy increases the value when it completes construction.

Is new launches worth the waits? Is lower $psf a safer bet?

Though new launch condo commands a higher $psf. it is proven to appreciate over the course of construction due to developers’ pricing strategy. Let’s look at a few examples.

Tanglin View bought in 2015 as resale property appreciated 12% over 5 years whereas Principal Garden as a new launch. appreciated 17.5% over the same period.

Trevista bought in 2015 as resale property appreciated 16.3% over 5 years whereas Gem Residences as a new launch appreciated 33.9% over the same period.

Seletar Springs bought in 2015 as resale property appreciated 9.3% over 5 years whereas high Park Residences as a new launch appreciated 21.3% over the same period.

Clearly shown that buying at lower $psf does not equate to a higher return potential.

New launches appreciate in the course of construction and stakeholders entering at the same price. They will all want to sell at a profit. Comparing a resale property, you may have brought at a higher price than your neighbours and they can sell at your buying price and still make a profit.

Is location critical for rentability?

According to 1991 Singapore Concept Plan, URA embarks on diffusing commercial activities to a series of regional centers. This brought a change in residential rental demand. Furthermore, with the operation of new MRT lines, it brought transportation convenience to a new level, Tenants do not mind to live further away from CBD in order to save on monthly rent.

Hoping to hit the Enbloc Jackpot?

Enbloc potential is determined by whether the value of surrounding lands and properties have appreciated significantly and if the condo’s land potential is not fully utilized and lastly the market outlook is positive. If you are hoping to hit the enbloc jackpots, it may not be easy as you think.

So the question is why do people still prefer resale properties given that new launch condo provide a swanky new feel and better investment return potential?

The widening price gap due to higher land cost and increasing construction cost make resale properties attractive. 3 years of waiting time for homes to be built maybe too long for some home hunters, their immediate need for a roof over their heads is compelling. Investors who can afford to wait will make a profit when construction is completed.

In conclusion, brand new launches condo offer you a good investment proposition and resale properties give you an immediate solution to your housing needs. Choosing the right property is dependent of your needs and wants. More on new condo launches in Singapore in The New Launch Property

roger is a registered salesperson with OrangeTee & Tie Pte Ltd. Owner of https://TheNewLaunchProperty.com.sg