Not only do these properties offer substantial returns, but they are also unaffected by the recent increase in Additional Buyer’s Stamp Duty (ABSD) rates.
Foreign investors who may have hesitated to invest in prime residential properties in Singapore due to the ABSD rate hike should consider exploring strata commercial spaces instead.
According to Daniel Chng, the Founder of ERG Singapore, strata commercial spaces, especially those situated in the Central Business District, represent an "optimal investment choice."
"The control over future approvals for new strata subdivisions ensures that the supply of such commercial spaces remains limited, potentially leading to higher rental yields and capital appreciation," explained Daniel.
"Foreign investors can take advantage of Singapore's pro-business environment and welcoming attitude toward foreign investment. Our stable political climate and robust legal framework inspire confidence, creating a secure and transparent environment for international investors," he added. Daniel emphasized that strata commercial spaces offer a valuable investment opportunity not only for foreigners but also for locals.
"Investing in strata CBD commercial space in Singapore allows local investors to leverage their knowledge of the domestic market and benefit from the ongoing growth of Singapore's business landscape," noted Daniel.
"Furthermore, such investments enable them to actively participate in Singapore's flourishing business scene and contribute to the country's economic development," he added.
"Given their limited availability in Singapore, these assets consistently deliver significant returns over time, provided investors adopt a long-term investment perspective," Daniel stated.
Daniel also pointed out that commercial shophouses and quality strata office space in Singapore, whether in the CBD or suburban areas, typically offer capital preservation and appreciation for buyers.
In addition to strata commercial spaces, Daniel suggested that local Singaporeans could consider private landed homes as an investment option.
"These properties are also in limited supply, constituting only 5% of all housing stock on the island. As long as there is a steady increase in affluence in Singapore, the demand for landed homes will continue to be supported due to the limited inventory, which is unlikely to increase significantly in the future," said Daniel.
Singapore's Investment Appeal Remains Strong
Despite the soaring real estate prices in Singapore, Daniel believes the country will continue to attract investors because it offers international firms a safe and high-quality investment destination that promotes growth when global economic stability returns.
"In times of global economic and political uncertainty, institutional investors and private wealth are drawn to stable destinations and are willing to pay a premium for security in an uncertain world," Daniel explained.
He also believes that Singapore will remain attractive to foreign investors despite its high property prices.
One key factor contributing to this appeal is the availability of long-term investment opportunities. According to Daniel, Singapore's commitment to long-term planning and ambitious projects like the Jurong Lake District (JLD) create attractive investment prospects for both local and foreign investors.
"The JLD, a significant urban redevelopment project, underscores Singapore's dedication to sustainable growth, making it an appealing destination for foreign capital seeking stable returns over the long term. Additionally, with the government's focus on continuous land releases through the Government Land Sales (GLS) program, there are ample opportunities for investors to participate in the country's progressive development journey," he added.
Experts suggest that the government must remain committed to addressing the root causes of supply-demand imbalances in the local property market.
"By implementing flexible policies that respond to changing economic conditions, Singapore can sustain its appeal to foreign investors even in the face of rising property prices.
Among the cooling measures Singapore has implemented to control rising prices is the ABSD rate hike.
Tang and Tay believe that this rate hike is likely to impact collective sales in Singapore.
"Sellers who are foreigners are now unlikely to support any en bloc initiatives, as their replacement cost has significantly increased. Consequently, collective sales launches may decrease in the coming months," they noted.
"Overall, Singapore's continued commitment to economic growth, stability, and innovation will play a crucial role in retaining its appeal as an attractive investment destination for both local and foreign investors," Daniel concluded
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