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Facts About Property Investment In Singapore

When I develop my Property P.L.U.S System, I saw some facts about property investment in Singapore that appear over and over again. I understand the struggles of investing in your first property, and that the investing journey can be overwhelming or intimidating. Hence, in this chapter, I will share with you some facts and tips while answering some of the pressing questions to help you choose the best property suited for your own investment objective.   

#1: Which property gives you the highest rental yield?

For those looking for properties with the highest rental yields, you should definitely invest in a 1 bedroom. Not only is a 1 bedroom unit easier to rent out, but it also has a better yield than a 2 bedroom unit. Read more in our article “An Analysis of 1 Bedroom Properties in Singapore“.

Examples of Possible Rental Yields in Singapore
Examples of Possible Rental Yields in Singapore

To have a better perspective, let’s take a look at the example above. Clearly, the 1 bedroom unit (indicated with 1BR) has the highest percentage rental yield at 3.3%  to 4.6%.

Average SG Condo Per Square Foot Price
Average Singapore Property PSF Pricing

Moreover, as seen from the Average Singapore PSF Pricing statistic above, a 1 bedroom unit has the highest PSF compared to the 2 and 3 bedroom choices. PSF also refers to the price per square foot of a property. Therefore, if you are looking to invest in properties that can give you the best rental yield, go for the 1 bedroom unit.

#2: Which property and location have a higher capital appreciation?

Growth of Properties according to Number of Bedrooms

Undeniably, if you are interested in increased capital appreciation and greater profit margins, you should get a 2 bedroom property especially in the RCR region, or a 2-3 bedroom house in the OCR region. In which, RCR region refers to the Rest of Central Region, and OCR region means the Outside Central Region of Singapore. Importantly, 2-3 bedrooms serve as the perfect choice as they are in demand and affordable, hence making them the most popular resale option. Given the large demand for resale, you can certainly achieve more profit margin and capital appreciation with 2-3 bedroom units.

#3: Which property is the best for resale?

Growth of Properties according to Number of Bedrooms

Apart from higher profit margins and capital appreciation, 2-3 bedroom properties are also an excellent opportunity for those that prefer lower risks and want to liquidate their properties in a quicker period. This is because the 2-3 bedroom units are more for your own stay and is a better property investment in Singapore

Furthermore, under-construction properties will always have a higher capital gain than resale units, due to the top developer pricing strategy. If you want to know more about this, you can check out the previous chapter and relevant videos on “Understanding Developer Pricing Strategy”  and “New Launch vs Resale Properties in Singapore | An In-depth research on Profit Margin”.

Notably, while properties in the RCR and CCR region have higher rental demands (as mentioned previously), it is not necessary that it will bring stronger sales. Instead, the next point will discuss further what location has the highest resale demand for properties.

#4: Location that has the highest rental demand

Price Growth comparing the 3 different regions of Singapore
Growth of Properties Comparing the 3 zones of Singapore

As seen from the graph: properties that are nearer to the city are easier to rent out, thus this means that there will be a lower chance of the unit being empty. However, after considering the other factors like the resale market and properties being in the CCR region (Core Central Region), properties near the cities may in fact take a longer time to sell.

#5: Concluding advice and tips

To sum up, if your objective is to rent properties over a long time frame, you should go for the 1 bedroom units in the Core central region (CCR) or the Rest of Central Region (RCR). You should also try to get properties that are closer to the city to get more benefits.

However, if you intend to flip after 3 to 5 years, I would advise you to get a 2 to 3 bedroom property in the RCR or OCR region.

For those who are uncertain of your exit strategy, you should pursue a more flexible choice instead. Thus, the best option would be the 2 bedroom units in the RCR or OCR region for the best choice for property investment in Singapore.

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