Latest news with #ABSD
AsiaOne
25-05-2025
- Business
- AsiaOne
Can you still own multiple properties in Singapore? Here's what you need to know in 2025, Money News
It's hard to argue that multiple property ownership is much tougher today, compared to the property heydays of the early '00s. For those who haven't been in the property market for some time, the regulatory environment in 2025 can come as a shock: cooling measures have made owning more than one property a lot tougher, and potentially less lucrative, for investors. Whether you're new or just returning to the Singapore property market, here are the key changes to consider today: 1. Impact of the ABSD on multi-home ownership As of 2025, the Additional Buyers Stamp Duty (ABSD) is 20 per cent of the price or valuation (whichever is higher) on the second property, and 30 per cent on the third property or subsequent. For Permanent Residents (PRs), it's 30 per cent on the second property and 35 per cent on the third or subsequent property. Note that this still has no bearing on a "sell one, buy two" strategy, though. This is because using such an approach, each buyer has a property count of only one (e.g., after a family sells the property, each spouse has one home under their own name, thus having separate mortgages but not incurring ABSD). But the extent of the ABSD is such that, if you cannot avoid it (such as decoupling a condo unit to buy two), it becomes much more discouraging. One example of this is choosing to retain your HDB flat, while buying a condo to rent out (or vice versa). The price of the typical resale condo (as of April 2025) averaged $1,734 psf. Assuming you purchase a 900 sq ft resale unit, this would be about $1.56 million. The 20 per cent ABSD would come to about $312,000. Assuming the 900 sq ft unit is rented out for around $4,000 to $4,500 per month (typical for most non-central condos in 2025), this could come to over five or six years of rental income just to cover the ABSD alone; a number that's clearly not viable or attractive to most investors. There are, to be blunt, few reasons to retain your flat while purchasing a condo in 2025 — even if you can rent one out. If there are reasons, it will likely be due to factors such as wanting to provide housing for children (e.g., a one-bedder near NUS if they're studying) or having to retain the flat because you may need to move back one day. One possible way to bypass ABSD is to purchase a dual-key unit, but this doesn't seem to be catching on. A dual-key unit is a single unit that is subdivided into two. This still counts as a single unit, so there's no ABSD involved. In theory, you could rent out one side, whilst living in the other, with no loss of privacy. However, this doesn't seem to be catching on, perhaps because dual-key units also tend to be larger. This raises their quantum which, coupled with having only one tenant, could be seen to balance out the advantages of avoiding ABSD. As an aside, the higher ABSD rates indirectly constrain resale supply as well If you purchased your second or subsequent home before the ABSD rates were raised, you can probably sense why fewer people in your position would want to sell. There's definitely an emotional barrier if you didn't incur ABSD (or much lower ABSD) when you bought in earlier times, but would incur a 20 per cent ABSD if you sold and bought another second property today. This can also impact en-bloc sales, as those who have rental units in the development may not feel the sale proceeds cover the ABSD, on a replacement investment property. 2. Impact of Loan-to-Value (LTV) ratio limits on multi-home ownership LTV limits have shrunk over the years, now capped at 75 per cent even for the first property. If you have an outstanding home loan, the second property has an LTV of just 45 per cent; and this falls further to 35 per cent on the third or subsequent outstanding loan. In addition, the minimum cash downpayment falls to 25 per cent, if you have one or more outstanding home loans. So if you haven't finished paying off your existing condo unit, the minimum down payment for your second property — assuming a price of around $1.8 million for a two-bedder — would be $990,000. Of this amount, $450,000 has to be in cash. This is another reason some families place the entire mortgage on one spouse, when they first purchase a home — it frees up a chance for the other spouse to take the full 75 per cent LTV on a second property. 3. Impact of the TDSR on multi-home ownership The Total Debt Servicing Ratio (TDSR) was introduced in 2013, and is one of the most significant changes from the prior decade. Under the TDSR, your monthly loan repayments — inclusive of other debts (personal loans, car loans, etc.) — cannot exceed 55 per cent of your monthly income. TDSR is calculated based on a floor rate of four per cent per annum (regardless of the actual interest rate, even though the actual rate tends to be lower), and sources of variable income count as being 30 per cent lower for TDSR calculations. The latter fact is important for those who are already landlords. If your current rental income is $4,000 per month, for instance, it only counts as $2,800 per month for the purposes of TDSR calculations. If you're purely a landlord and only have rental income, this does make it a lot tougher for you to secure financing on another property. Consider an existing landlord making $8,000 a month from rent (for simplicity's sake, let's say he has no other income, and no other sources of debt): Gross Monthly Rental Income: $8,000 Adjusted Income (after 30 per cent haircut): $8,000 × 70 per cent = $5,600 TDSR limit (55 per cent of adjusted income): $5,600 × 55 per cent = $3,080 Assuming he could still get a 25-year loan (this is dependent on his age), and a floor rate of four per cent, this would cap his maximum loan amount at roughly $583,500. Given that resale non-landed homes average $1,734 psf and new launches average $2,626 psf, the quantum of even a 700 sq ft two-bedder is about $1.21 million (resale) and $1.83 million (new launch). This makes expanding into a third property quite challenging, especially after you add in the 20 per cent ABSD. 4. Real cash-flow considerations in multi-home ownership Non-owner occupied properties (i.e., anything rented out) have higher property tax rates. This is on a tiered system based on your property's Annual Valuation (AV), which is determined by IRAS and the Chief Valuer: Annual Value Tax rate First $30,000 12per cent Next $15,000 20per cent Next $15,000 28per cent Any subsequent amount above $60,000 36per cent Assuming the government decides your property can make $4,500 a month* and it's rented out, you'd pay: $3,600 + $3,000 + $2,520 = $9,120 per year, or about $760 per month in property tax. This has to be coupled with condo maintenance fees (roughly $400 per month in most mass-market condos), as well as the costs of own-unit maintenance (fixing broken kitchen appliances, replacing sagging doors, etc) *Remember the AV is not the literal amount you rent out the property for — it's set by the government. Usually it's generous, and set lower than real rental income, though. Example of cash flow assuming $4,500 per month in rent: Gross Rental Income: $54,000 per year Less Property Tax: $9,120 (we'll assume the AV matches the real rental income, for simplicity's sake) Less Maintenance Fees: $4,800 This is a net cash flow of about $40,080 per year, or about $3,340 per month. This is if you don't also have any mortgage repayments. If you still have mortgage repayments, however, it's unlikely that you'll be cash flow positive. Multiple property ownership is definitely more challenging in Singapore in 2025 This doesn't make it impossible, but it does mean you need to start earlier if you can — once age begins to limit your maximum loan tenure, for example, the monthly loan repayments will rise, and make it harder to meet the TDSR. It also means you should work out with your spouse, earlier on, the manner of holding for each property. Remember that you cannot decouple for HDB flats (i.e., transfer ownership fully to just one spouse) just to buy a second property for the family, so it can sometimes make sense for the flat's mortgage to be under just one name. This may also necessitate starting with a smaller flat, such as a 3-room instead of a 4-room, so that it's viable on one person's income. Finally, a sense of realism is needed in the current market. Depending on your finances, it sometimes makes sense not to own multiple properties, and simply share the load of upgrading to a single larger home. [[nid:717813]] This article was first published in Stackedhomes.
AsiaOne
24-05-2025
- Business
- AsiaOne
Looking to buy Singapore property in 2025? Here's what's different (and what could catch you off guard), Money News
The 2025 property market is going to be unique, for several reasons: a pivot to the Core Central Region (CCR), a tight supply of resale homes, and an uncertain economy are at the top of these. Besides this, we'll also see the outcome of cooling measures implemented over many years: will a 60 per cent Additional Buyers Stamp Duty (ABSD) prevent affluent foreigners from rushing into Singapore's "safe haven" property market, as has occurred in the past? Whatever the outcome, one thing is clear — the average homebuyer in 2025 may see fewer options in the near term: 1. Ageing and property replacement costs This is really a combination of two factors, and it stems from the effects of age and the Total Debt Servicing Ratio (TDSR). The TDSR restricts total monthly loan repayments to 55 per cent of the borrowers' income, inclusive of other debt obligations. So if they have a combined income of $12,000 a month, this restricts them to a total loan repayment of $6,600 (assuming they have no other loans). There is another element to this, though: the loan tenure. The longer the loan tenure, the lower the monthly repayments — and hence the more likely it is that a borrower will pass the TDSR. Conversely, a shorter loan tenure means higher monthly repayments, and a higher risk of failing to meet the TDSR. Keep in mind that if the loan tenure exceeds the retirement age of 65, the maximum loan quantum falls to 55 per cent. As a 45 per cent down payment is usually not viable, this leaves borrowers having to settle for a shorter loan tenure (e.g., an upgrader aged 50 years will probably have to settle for a 15-year loan tenure). Let's consider this scenario: You and your spouse buy your first home, an HDB flat, at the age of 35. Fifteen years later, at age 50, you decide to upgrade to a private condo. Let's say your intended new home costs $2.1 million. At this stage, you earn a combined monthly income of $12,000. As mentioned above, this gives you a TDSR limit of $6,600. Now here's the issue: because you're already 50 years old, the maximum loan tenure you can take is just 15 years (as they cannot afford a 45 per cent down payment). At a four per cent floor rate for the mortgage (required by MAS when assessing loan eligibility), a 15-year loan with monthly repayments of $6,600 can support a maximum loan of only around $878,000. (Note: This maximum loan amount is not exact, and may vary slightly depending on the methods of the bank you go to) Suppose you sell their flat for $600,000, and we assume it's fully paid off (no more outstanding flat loan or other costs). That gives you a total budget of $1.478 million (i.e., total $878,000 loan + $600,000 from sale proceeds). But with your dream condo costing $2.1 million, you still face a shortfall of $622,000; money they must pay in cash or from their CPF savings. Our couple could possibly have made it when they were younger, but it's less viable for them now. Those who can still upgrade at a later age would likely need (1) a huge windfall, like selling their flat for $1 million or more, (2) above-average income, or (3) huge savings for bigger down payments; possibly a combination of all three. Lacking these, our couple may decide to simply not upgrade and hold on to their existing flat. Given Singapore's ageing demographic, this may be a factor that constrains the number of resale units entering the market. 2. Most upcoming new launches are in less family-friendly areas The next batch of new launches will mainly be in the Core Central Region (CCR). Around 14 of the roughly 22 remaining launches are in this region; and already we've seen some projects like Aurea, One Marina Gardens, The Collective at One Sophia, and so forth. While these locations are prestigious, they're typically associated with offices or sometimes high-end malls and entertainment; less so with family-friendly heartland living. One Marina Gardens, for instance, doesn't have any primary schools within one kilometre. According to realtors we've spoken to, this is one of the most critical considerations among buyers. It's also been said, by buyers on the ground, that prime-area malls are not as superior to heartland malls these days. Barring some luxury brands (which are not everyday needs anyway), everything you can find in a CCR mall can probably also be found in Tampines Central, Waterway Point, Clementi Mall, etc. Decentralisation has eroded the importance of the CCR, while other amenities, such as coffee shops or food and market centres, may better serve homeowners in an everyday capacity. While the government does intend to make CCR locations more balanced, it's not as if they can build a lot of schools or markets there overnight. But unless you go for resale, where there are few sellers, there's not much choice in the near term. The CCR is where the new launches are going to be. 3. On the resale HDB front, time is needed for more supply to kick in The number of flats reaching their Minimum Occupancy Period (MOP) this year is phenomenally low — about 6,974 units in 2025, as opposed to 30,920 units in 2022. While HDB is ramping up construction (an intended 50,000 new flats released between 2025 to 2027), this doesn't provide immediate relief. Those flats still have to be built and lived in for five more years before they join the resale market. With fewer people willing to let go of their flat right now (see point 1), it is unsurprising that buyers feel constrained. For those who don't have the option to just sigh and join the BTO queue, 2025 is shaping up to be a rather frustrating year. What can buyers do about all these? It's time to recognise that, in the face of these constraints, an ideal property may not be possible — it's now a matter of trade-offs. You may need to settle for a smaller two-bedder instead of a three-bedder, for example, if age prevents you from taking a bigger loan. There may also have to be a compromise on location. We saw a good example of this way back in 2018, when Parc Esta was launched: part of the reason for brisk sales was its one-stop proximity to Paya Lebar Quarter (PLQ). In the same way, you might want to consider a project that's much cheaper, despite being just a few minutes away by bus, MRT, etc. For those looking at resale options, a final consideration is not to take too long. Resale buyers don't have much of an advantage in this market; and waiting even a week or two can result in having to come back with a much higher offer. [[nid:717982]] This article was first published in Stackedhomes.
Straits Times
23-05-2025
- Business
- Straits Times
Ultra-luxury condo sales in Singapore see uptick in Q1 2025 despite economic headwinds
SINGAPORE – The ultra-luxury condominium market in the Republic appears to be regaining some traction, with 17 sales recorded in the first three months of 2025. This is more than double the seven units sold in the same period in 2024, and more than both the 15 units sold in the first quarter of 2023 and the 14 sold in the same period in 2022, before the Additional Buyer's Stamp Duty (ABSD) on foreign buyers was hiked to 60 per cent in April 2023. Urban Redevelopment Authority data showed that from January to May 22, there were 24 ultra-luxury condos – defined as units priced at $10 million and above in the Core Central Region (CCR) – sold, already exceeding the 17 units transacted in the first half of 2024. Among the standout transactions in 2025 was a penthouse at Park Nova, which changed hands for $38.888 million or $6,593 per square foot (psf) – the second-highest psf achieved. The highest psf record still belongs to a 3,089 sq ft unit at The Marq on Paterson Hill, which was sold for $6,650 psf in November 2011. Four deals exceeding $20 million each were recorded at 21 Anderson, a new freehold development by Kheng Leong, the real estate arm of the Wee Cho Yaw family. These high-end deals come as the economic outlook remains subdued . Singapore's gross domestic product (GDP) growth forecast for 2025 remains at a modest 0 to 2 per cent, reflecting broader global uncertainties. OCBC Bank chief economist and head of treasury research and strategy Selena Ling noted that the ultra-rich may have different priorities when it comes to property investment. 'They will likely prioritise macroeconomic and political stability, currency and capital appreciation potential, as well as ability to transact smoothly (both purchase and sale), so short-term slower economic growth forecasts may not matter that much since the purchases are not funded by ongoing earned income but by stock of wealth,' said Ms Ling. Ms Ling also pointed to de-dollarisation as a market theme that is gaining traction. With investors looking into potentially moving away from US dollar assets, top-tier currencies like the Japanese yen, Swiss franc and Singapore dollar are becoming more attractive. 'At the end of the day, Singapore's attractiveness is the Singapore dollar appreciation, limited land resources, affordable funding conditions, and role as a financial hub,' said Ms Ling. Still, market watchers cautioned it is too early to call this a rebound in the ultra-luxury condo market, although the uptick in sales signals renewed interest in ultra-luxury homes. 'Recent data points to a pickup in ultra-luxury transactions, but it's more a function of selective demand for standout projects than a broad-based recovery,' said Mr Mohan Sandrasegeran, head of research and data analytics at Singapore Realtors Inc (SRI). Mr Sandrasegeran cited sales at Park Nova and 21 Anderson as examples of how well-located, prestigious projects continue to attract high-net-worth individuals and investors. ERA Singapore chief executive Marcus Chu made similar observations, noting that many buyers in this segment often seek out specific features: freehold tenure, large floor areas and multiple bedrooms. This demand is being further fuelled by scarcity. Only 78 new units were launched in the CCR in the first three months of 2025, said Mr Sandrasegeran. He added that upcoming projects such as W Residences – Marina View, Robertson Opus, and River Green could further invigorate interest in the second half of the year. Ms Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie, believes the ongoing global volatility may drive more capital into Singapore's luxury homes. Despite the recent 90-day tariff pause between the United States and China, investors remain wary of renewed volatility. 'It depends on how the macroeconomic conditions evolve over the next few months, especially after the 90-day truce period. If the macroeconomic landscape remains uncertain due to increased global trade challenges arising from the tariff policies enacted by the United States, then demand for luxury units may continue to rise,' said Ms Sun. 'This is because many investors consider these luxury properties to be safe haven assets that can help preserve their wealth during economic uncertainties. Therefore, more investors may park their money in luxury homes, especially if there is fresh turmoil in the equities market,' she added. The luxury segment is also seeing a shift in buyer demographics. Prior to the ABSD hike in 2023, foreign buyers dominated top-tier condo purchases. Now, local buyers – both citizens and permanent residents (PRs) – are playing a more prominent role in this segment. Of the 17 super luxury condos sold in the first three months of 2025, five units were purchased by Singapore citizens while eight were bought by PRs , noted Ms Sun. The numbers showed that there is a mix of local and foreigners supporting the ultra-luxury market, she said. Mr Chu of ERA said: 'We have seen a notable increase in the number of Singapore Permanent Residents purchasing luxury homes this year. It is likely that some of them are newly minted PRs entering the market and would take advantage of the lower ABSD payable.' Permanent residents pay 5 per cent ABSD on their first property, while citizens face 20 per cent ABSD only on their second property. Buyers from the US, Iceland, Liechtenstein, Norway and Switzerland do not need to pay ABSD for their first residential home in Singapore. Join ST's WhatsApp Channel and get the latest news and must-reads.
Business Times
21-05-2025
- Business
- Business Times
Steady buyer demand seen supporting stream of private home launches in H2 2025
[SINGAPORE] A bumper crop of private homes is set to hit the market in the second half of 2025, with projects large and small putting more than 9,000 units in the pipeline for the rest of the year. A Citi Research note released on May 15 indicated that 35 upcoming projects, including landed homes and executive condominiums, could be launched over the rest of the year, yielding a total of 9,339 units. A total of 5,320 new condos were marketed in 10 launches since January. Of the launches being lined up, 19 projects offering 5,487 units are in the Core Central Region (CCR), 10 launches with 1,157 units are in the Rest of Central Region (RCR), and six Outside Central Region (OCR) projects will launch 2,695 units, Citi's research found. Demand is expected to hold steady, though take-up is likely to vary across projects, Lee Nai Jia, head of real estate intelligence at PropertyGuru, told The Business Times. Buyers are becoming more selective, he said, and cited proximity to schools, MRT stations and daily amenities as being among the top priorities among home buyers. With macroeconomic uncertainty stemming from US President Donald Trump's tariffs, buyer sentiment has turned more cautious. Lee noted that following the tariff announcements, users on the PropertyGuru listings platform have gravitated towards private homes priced at around S$1.9 million, and HDB resale flats at about S$740,000. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up 'They have reached a kind of resistance level, and we should see that tension between buyer and seller expectations play out in the coming months,' he said. 'Transaction activity will probably still go on, but slow down a bit in the second and third quarters, depending on Trump's policies.' Lee, referring to the bulk of launches expected in the CCR in the second half, said their locations were generally attractive, but that those that lacked connectivity or nearby amenities may face slower sales. Developments coming up in the Central Business District area are expected to encounter relatively subdued demand, given the lack of amenities and fewer foreign buyers snapping up units following the imposing of stricter cooling measures. The government doubled the Additional Buyer's Stamp Duty (ABSD) for foreigners buying residential property to 60 per cent in April 2023, knocking the wind out of the high-end market. BT previously reported that there were only 14 foreign buyers of new condos in the CCR in Q1 this year, a significant tumble from the 92 in Q1 2023, before the ABSD hike. Including resales and sub-sales in the CCR, foreigners made up 4 per cent of the total of 733 transactions in Q1 2025. In Q1 2023, this group made up nearly 16 per cent of buyers in 1,027 transactions. Still, Lee reckons that slower projects may gain traction over time as surrounding neighbourhoods evolve through rezonings, or the launch of adjacent developments. Huttons Asia's chief executive Mark Yip observed that the market has 'settled into a more relaxed pace' in Q2, after a sharp increase in activities in the luxury non-landed homes market in Q1. Based on caveats lodged, 72 luxury non-landed units were sold in Q1, the highest in two years. This is 63.6 per cent higher quarter on quarter, and 35.8 per cent higher year on year, Huttons' data showed. The total value of luxury non-landed homes sold in Q1 was S$611.4 million, 64.2 per cent higher than in Q4 2024 and 59.9 per cent higher on year. 'Some buyers are making opportunistic offers, but there is little sign of distress in the resale luxury non-landed market at the moment,' said Yip in the quarterly Huttons Prestige Report released on May 14. ETC (formerly Edmund Tie & Company) expects residential prices to moderate. 'Overall housing supply rises with the ramp-up of Government Land Sales (GLS) – a trend that should help support market stability and sustain healthy transaction activity.' That said, PropertyGuru's Lee expects developers to be more selective when bidding for sites, as material and labour costs may rise and sales slow; he cited the recent GLS tender for Parcel B in Media Circle, which had no takers. In recent months, new home sales have slowed from the quickening that the market underwent in the last quarter of 2024 and in Q1 of this year. Citi analyst Brandon Lee also expects lower land bids in the near future. He wrote in a report that the slower home sales 'could result in more attractive land prices for eight upcoming government tenders from May to September'. Apart from site-specific factors, developers are also cautious on the back of the US tariff announcements. The tender for the Media Circle plot which drew no takers was the first to close since the US announced its import tariff hikes. Developers were also said to be discouraged by the lacklustre performance this month at the nearby Bloomsbury Residences, which sold just a quarter of its total 358 units at an average price of S$2,474 per square foot. The cool response to Bloomsbury Residence aside, a further supply of about 325 private homes is slated to come up on the nearby Media Circle Parcel A, which was awarded in March to another Qingjian-Forsea-led tie-up at S$1,037 psf per plot ratio. PropertyGuru's Lee expects developers to maintain their selling prices. 'If they price (the units) overly high – especially with more launches coming in the second half – they risk pricing out consumers or the sector. 'If they lower their prices, they are also in danger: when costs increase, their margins may be further reduced.' Citi projects average monthly primary sales to hover at between 500 and 700 units, supported by soft mortgage rates. This is a decline from the 1,000-to-1,600-unit level in January and February.
AsiaOne
17-05-2025
- Business
- AsiaOne
6 prime HDB shophouses for sale at $73m in Singapore: A look inside the rare portfolio, Money News
$73 million could buy you: A luxury bungalow in Nassim Road A small office building in the CBD fringe Or six HDB shophouses with established tenants in Singapore's busiest heartland hubs Savills Singapore just dropped one of the more interesting commercial listings of 2025: a portfolio of six shophouses all in prime spots: directly connected to MRT stations, bus interchanges, and right beside footfall anchors like NTUC Fairprice. Shophouses have seen more interest in recent years, mainly due to the 60 per cent Additional Buyers Stamp Duty (ABSD) on residential properties. Commercial shophouses don't incur this added tax, which makes them increasingly attractive to some buyers. This could explain the confidence in such a high-quantum package, which is backed up by core locations such as Toa Payoh, Ang Mo Kio, and Tanjong Pagar. Prime spots in Singapore's most resilient heartlands The locations of the shophouses are developed, with long transaction and rental histories. In fact, some of these shophouses are already tenanted by businesses; this adds the kind of consistency and predictability that landlords prefer. Toa Payoh Lorong 6: A ground-floor unit spanning 1,033 sq ft, with sheltered access to Toa Payoh MRT Station and Bus Interchange. The property is already subdivided into three units and fully leased. Ang Mo Kio Avenue 8: Two units (4,037 sq ft and 1,647 sq ft) spanning two levels with residential quarters above*. These shophouses sit within AMK Town Centre, right next to the Bus Interchange and AMK Hub. *For shophouses with commercial and residential use, ABSD is typically charged only on the residential portion; but verify with the selling agent or URA for more specific details. Tanjong Pagar Plaza: Three ground-floor units ranging from 603-764 sq ft, positioned right at the entrance and pedestrian drop-off point. This unit is beside the NTUC Fairprice. This doesn't just make for a good anchor tenant, it's also attractive to future tenants. (A supermarket naturally draws more people to the area, and it's assumed NTUC wouldn't have opened if they didn't already research the area. Spotting a business like NTUC or McDonald's is a "cheat code" to identify high traffic areas.) The numbers behind the asking price Let's break it down by location: Property Size Guide Price 190 Toa Payoh Lorong 6 1,033 sq ft $12m 702 Ang Mo Kio Avenue 8 4,037 sq ft $36m 705 Ang Mo Kio Avenue 8 1,647 sq ft $10m Tanjong Pagar Plaza (3 units) 603-764 sq ft each $5m each What makes HDB shophouses different According to Nick Chan from Savills, there are only about 8,500 privately held HDB shophouses in Singapore, making them "among the most tightly held commercial assets" here. Besides scarcity, HDB shophouses typically benefit from the captive markets of HDB estates. Their locations near transit hubs and daily necessities providers like NTUC ensure consistent foot traffic, and this means very high rentability. The shophouses have been marketed with an impressive claim of a four per cent rental yield. By comparison, the yield on a typical private non-landed residential property is about two to three per cent as of 2025. The rental performance may be due to: Positive rental reversion as leases expire (i.e., new tenants might potentially pay more than the previous, as the earlier ones locked in lower rates) Further subdivision of space to drive higher rental income Potential future upside from ongoing rejuvenation plans The units can be acquired individually or as a complete portfolio, with the sale via private treaty. The Bigger Picture What's particularly interesting about this listing is its timing. As Singapore navigates economic headwinds, investors are increasingly prioritising defensive assets over speculative plays. It can feel safer, for instance, to buy an asset and collect a predictable amount of rent, rather than count on high resale gains from luxury-area condos. An added benefit is that commercial tenants tend to be more "sticky." Residential tenants may be more willing to pack up and leave when rates rise; but businesses such as restaurants or shops could lose a chunk of their customer base by doing so. The question for some potential investors though, isn't just about the current four per cent yield; they need to look ahead and consider if escalating trade wars and economic uncertainty will affect their business tenants. Even if those tenants are loathe to move, poor business can result in vacancies (e.g., the tenant closes the business), as well as static or declining rent. [[nid:717939]] This article was first published in Stackedhomes.
