Alternatives for Residential Property | Types of Real Estate | Singapore

Investment | Property | Real Estate | Singapore

Regardless of what the government says, Singaporeans regard any residential property they purchase not only as a home but also as an investment.  This opinion is fueled by the trends of several past decades, that have seen property prices rise in spectacular fashion. However, residential property prices have fallen for the seventh consecutive quarter. And cooling measures by the government, such as the Additional Buyers’ Stamp Duty and the TDSR framework, have driven many buyers out of the market. So, what should a worried investor do? In this blog, we discuss alternatives for residential property investment.

Commercial Real Estate

If you want to buy an office or retail space and rent it to a business, you should consider purchasing commercial property. Commercial property investors, benefit from the absence of the ABSD rules. Moreover, commercial properties are known to produce higher rental yields than residential properties. This is a general understanding of commercial properties and you are advised to do thorough research before investing in one.

The demand for a specific area can have a significant impact on commercial property. A new shopping mall in the area may cause rents in your own shop space to fall. And the government may decide to re-zone the area. This means the restaurant premises you originally purchased may become an office. When investing in commercial real estate, you should put yourself in the shoes of the people who will be renting it from you. Consider whether the location is easily accessible and whether the unit receives a high volume of human traffic. Also, you need to be wary of any future developments.

Alternatives for Residential Property Investment

Industrial Property

Many Singaporeans are excluded from the residential market entirely due to the numerous restrictions. These are basically governing the purchase of HDB property and the ownership of multiple residential properties. Industrial properties can be a good alternative as the ABSD rules do not apply to them. however, the industrial property must be used for activities classified as industrial by the government. For example, manufacturing or warehousing, factories, etc. The main stumbling block is that most Singaporeans are unfamiliar with industrial real estate. And have no idea what rental yields may look like.

Also, it is obvious that renting out a warehouse in Tuas is a lot more difficult than renting out a condo unit. Rental incomes for industrial property are actually significantly higher than those for residential property. However, you must note there are some restrictions in place to limit speculation. For instance, if you buy a unit in a new development, you’ll have to wait 10 years after the temporary occupation permit (TOP) to subdivide it.  Subdivision allows you to earn more rent by renting out the property to multiple tenants.

Overseas Real Estate

Residential property in Singapore may still be prohibitively expensive despite the cooling measures. JUst crossover the causeway and everything becomes a little more affordable. With currencies such as the Malaysian Ringgit, Thai Baht, and Australian Dollar at all-time lows, the astute investor can find a plethora of options. All you need to do is know where to look. However, investing in overseas properties can be risky. And many Singaporeans have been the victim in the past. Work with a reputable agent and educate yourself on the real estate market trends in the area you like.

You’ll need to do a lot more legwork than you would if you were buying local property. So, don’t ignore the need to do your own research. Or assume that the agent will provide you with all the accurate information. Going along with the hype without doing your research can cost you a great deal later! So, these are the three good alternatives for residential property investment.


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