Singapore is an intriguing and interesting market for many real estate investors looking for opportunities abroad. The domestic demand is very strong, and it attracts many investors from surrounding nations as well.
Everybody knows how prime of a destination Singapore is and how well organized its government and institutions are, which makes it one of the easiest places to not only buy real estate but do business in Southeast Asia. But it may have a few interesting particularities you didn’t know about. Let’s take a look at a few things you probably didn’t know about the Singapore real estate market.
Public Housing In Singapore Has Nothing to Do with Public Housing in the United States
One of the things that will surprise many investors is how luxurious public housing is in Singapore. The government has a very different view of what public housing should be and does everything it can to allow its residents to be well housed at a reasonable price relative to the market.
Another thing that you should know is that these units will usually not be available to US citizens. The only way to get access would be to marry a citizen and become a resident.
If you want to know more about these units, you can check out this piece on the sales of balance flat 2021 by Property Guru. In it, you’ll learn more about those HDB flats you will often hear about when researching investment options in the country. It explains different types of schemes and programs available to residents and those who qualify for these units as well.
Singapore is a City State
While most will have heard of Singapore, not everyone knows that it’s a city-state. So, you might be surprised by how small Singapore is. Singapore is the second smallest nation in Asia and 459 times smaller than neighboring Malaysia. This comes with pros and cons.
One of the benefits is that researching real estate is much easier and it will be easier for you to understand the market as a whole. One of the drawbacks is population density. This brings us to our next point.
Singapore is More Densely Populated than Hong Kong
A lot of people see Hong Kong as one of the most populated areas of the world, but did you know that Singapore was even denser? Singapore is currently the 3rd most densely populated country in the world at the moment with 4,938 residents per square mile. This means that there is less land available, but the government is taking steps to increase its landmass. One of the ways it has done this is by reclaiming land from Macau, but there have been many other solutions tabled so far.
There is Tons of Vacant Space
One thing that might surprise you, however, is the still impressive number of vacant units in the country. Vacant units have a direct effect on the rental market and are also a reflection of it. This is usually a sign of a rental market that is fairly weak, which is good news if that was what you were intending to do.
And these aren’t bad properties either. As a matter of fact, the majority of vacant units on the market are Executive Condominiums. This is mainly driven by speculation and EC investors overestimating rental capacity.
Singaporeans Households are Fairly Small
An interesting fact about Singapore is how small the average family unit is. The size of the average household in Singapore is 3.53, which is one of the smallest in the region. This has numerous effects on the real estate market that investors should know about.
One of these is the proliferation of smaller units everywhere in the country. Many developers are expecting households to continue in that trend, and we could expect to see even more of these smaller units in the near future. These will also be cheaper, which will present greater deals to renters. This could ultimately benefit the rental market as a whole and help reinvigorate it.
Over 600 000 Residual Units will be Needed to House the Growing Population
Even if Singaporean families are shrinking, the country is still incredibly densely populated and could deal not only with space issues but with a dearth of units as well. It has been estimated that 600,000 more residential housing units will be needed to house the projected 6.9 million the country’s population is expected to reach by 2030. This could be good news for developers but come with a variety of challenges as well.
If you still were curious about the Singaporean real market, we hope you learned a few things about it today. It is a vibrant market with tons of potential, so do your research and work with someone with expertise and a solid reputation on the ground.