Singapore is one of the world’s financial centers, a home for global expats, and it is also home to various global companies. The standards of living in Singapore have brought many potential buyers to invest in Singaporean properties. The education, transportation system, banking, taxes, low crime rate, entertainment, well-regulated politics, and stable economy have made Singapore be one of the best places in the world and it has gotten a lot of attention from international property buyers. The most important factors that can help buyers analyze if blue-chip properties are worth the investment are growth, good return, sustainability, liquidity, and reputation.
What is a Blue Chip Property in Singapore?
A blue-chip property is usually close to transportation, good schools, malls, etc. In other words, it’s safe to invest with a lower risk investment. However, the blue-chip prices can be higher. This can be risky because when you invest in a property, you want to make sure it has the financial strength and it has a potentially good return in the future.
Blue-chip properties are in desirable locations where everybody wants to live so that they can experience a modern lifestyle in Singapore. The location has a strong rental yield and strong capital growth. The blue-chip location provides convenient public transport, shopping malls, restaurants, parks, and schools. It is more like a capital city and it closes to the CBD which are the two main factors that have lead to higher costs for properties in these blue-chip locations. In general, the blue-chip location is all about the high demand market, and buyer’s desirability.
Growth and Development
Singaporean properties have so much potential to grow, like Parc Esta in the Paya Lebar area. This property is surrounded by government reserved lands, which means that there’s potential growth in that area. The future of the Paya Lebar is a matter of consideration. Things like schools, public transportation, hospital development and commercial buildings. It can drastically increase the property’s value. Future growth could affect the desirability of buyers when they make the decision on buying properties. An area that has the potential to grow in the near future should be considered as an investment property because it appeals to prospective tenants and also the value itself would be increased too.
A Good Return
The buyer will analyze if the property has future returns. One of the positive impacts of investing in Singaporean property compared with other assets is that buyers can borrow a large amount of money with a very low-interest rate to buy properties. So the cheap leverage can help buyers to get great returns. When the price of properties increases, then the buyer’s investment is going to be multiplied. When you buy properties, you have to think about where your future tenants will be coming from? Most tenants hope to live in a place that provides convenience and connectivity.
A prime location attracts more tenants with much higher rental fees, which means better returns. Investing in a property in a prime location can mean more renters, higher rental fees, and better returns. Properties located near or within the city center are appealing to both city workers as well as many foreigners who prefer to rent a private house rather than book a hotel if they visit frequently.
Sustainability is also the reason that buyers invest in Singaporean properties. A great neighborhood is such an important factor that most buyers consider before they buy a house in Singapore. They look for neighborhoods with nearby places such as shopping centers, schools, and public hospitals that can help to push up the rental price. When the property is near these important amenities it will be a top choice for renters looking for their ideal place. Schools are also a key factor, buyers always look for great schools near their properties. The distance to the schools and the quality of the schools are factors that buyers will consider before they buy property in Singapore. Transportation infrastructure has a positive effect on property prices as well. When international buyers buy a property, they might pay more attention to choosing a property close to their children’s schools or their workplace. When homeowners are away from Singapore, they could rent the place out to renters. It is a win-win situation because a nice location can rent out at a higher price even when the owner is away from the country.
Have you ever thought about the future development for lands that are close to the major MRT east line? Many people would choose somewhere that is close to their workplace, so a place with easy access to public transportation is always more helpful than a place with just one route. Lands are finite commodities in Singapore and there are no lands around Bugis MRT station and Lavender MRT station anymore. Future land development for residential areas near the major MRT East line is scarce. There are no more lands around Bugis MRT station, Bedok MRT station, and Lavender MRT station. The lands in Singapore are limited, and the future price is going to increase a lot if you find the right blue-chip property. Therefore, vacant land in front of the MRT station would be a great investment right now due to the predicted future growth.
Liquidity means the property is easy to buy, and also easy to sell without losing any value. It’s important to know when you want to buy-in and when you want to sell your property, and it relates to demand. Liquidity equals value and value is about demand. People want to live somewhere that is close to transportation stations, shopping malls, schools, parks, etc.
Singapore is a highly developed country and there are not many lands in CBD, so developers can sell properties at higher prices. Singapore has one of the best economies in the world, so the demand for residential places has also risen, which means that the property prices increased too.
Morgan Stanley’s analysis stated that Singaporean property prices will double by 2030. So the property the buyers have today could sell for a much higher price in the future. Blue-chip properties can lead to a big win for the buyer in the future. At the end of the day, high risk with a higher return is always the heavy fight, but blue-chip will win. Buying into a blue-chip location may be more pricey, however, the result will be positive and worth the price and the money you invest in it. You will have a solid investment which gives you stable returns and growth.
Finally, the value of the property also depends on its reputation. Some well-known properties are Wallich Residences, Juniper hill, Cuscaden Reserve, and Rivière. They’re all iconic properties and people know about them due to their eye-catching views. Those properties are very popular because of the hotel concept design, large landscaping, modern resort design, and most importantly the location with views of the hills, sea, and rising sun. The well-known properties also provide safe neighborhoods and convenient accessibility to the city’s major subway and bus routes. The property can be located in front of the ocean, harbor, or in CBD. Those properties are not only steady but also in very high demand in the market.
In conclusion, Singaporean property investment has such a great future due to Singapore’s rapid economic growth, especially around Paya Lebar Airbase. This area is the next generation of the new neighborhood after the 2030 master plan. Furthermore, there are three principals of G.R.C for buyers and investors to remember: Buy property with visible growth on the land and area; calculate your return not just ROI, but ROE; connectivity & convenience are always the key driving force for the real estate asset class. Investing in Singapore can be expensive because of its lack of land, however, if buyers have a good strategy, they will definitely get great returns in the near future. Many buyers buy blue-chip properties because they see potential strong growth, convenience, connectivity, and good returns in the future.