Smart Investments in Landed Property across Singapore

smart investments in landed property across singapore

Singapore’s real estate market presents a distinctive opportunity, particularly in the sector of landed house investments which forms only five per cent of the nation’s entire housing market. The city’s limited land supply amplifies the value of these properties, making them a coveted asset for discerning investors. This scarcity not only underscores the potential for significant appreciation but also highlights the exclusivity and prestige associated with owning a landed property in Singapore.

The allure of investing in Singapore’s landed houses extends beyond the conventional appeal of real estate. It reflects the city-state’s robust economy and well-established property laws, which together create a secure and highly desirable investment landscape. This guide aims to help you understand Singapore’s landed property market better, illustrating why it stands out as a prime choice for those looking to diversify their portfolios with high-value, tangible assets that are always appreciating in price, thanks to the ever-growing demand in a market with limited supply.

Why You Should Invest in Landed Property

Singapore’s landed property market offers a unique allure for affluent investors, where each investment is more than just a property purchase. These properties are embodiments of exclusivity and luxury in a city known for its limited space. Owning a landed house in Singapore is not just about the tangible asset but also the prestige and status it confers. This aspect of the real estate market, known for its rare and valuable offerings, attracts those seeking to enrich their portfolios with possessions that are not only financially rewarding but also emotionally fulfilling. Here are three compelling reasons:

Scarcity and Value

As mentioned earlier, in Singapore’s landed property market, the scarcity of land plays a pivotal role in defining the value of these investments. Every square foot of landed property is a valuable asset due to the nation’s geographical constraints. Investing in landed properties in Singapore is more than just owning a symbol of prestige; it’s acquiring a piece of limited, ever-appreciating land (freehold), serving as a hedge against future land shortages and price escalations.

Landed Property Types

The landed property sector in Singapore offers a diverse range of options, each catering to different investor needs and lifestyles:

  • Cluster Houses: These properties offer a unique blend of individual living spaces and shared community amenities. They typically feature a gated community environment with shared facilities like pools, gyms, and gardens, appealing to those who seek a balance between privacy and community living.
  • Terrace Houses: These homes, known for their efficient layout and shared walls, offer a practical solution for urban living. Their design maximises space, making them a favoured choice for those seeking both affordability and the benefits of landed living. These properties blend the convenience of city life with the comfort of a residential community.
  • Semi-Detached Houses: Often referred to as “Semi-Ds”, these properties offer a perfect mix of space and coziness. Sharing one common wall with a neighbour, they provide more room than terrace houses, yet maintain a sense of community. Their design appeals to those looking for a balance between individuality and connected living.
  • Bungalows (Detached Houses): In Singapore, detached houses, commonly referred to as bungalows, are the epitome of private and luxurious living. These standalone properties are sought after for their privacy, space, and the freedom they offer for personalisation. Ideal for families or individuals who prioritise exclusivity, bungalows provide a serene retreat from the bustling city life, making them a preferred choice for high-end property investors.
  • Good Class Bungalows (GCBs): The pinnacle of luxury in Singapore’s real estate, GCBs are highly coveted for their unparalleled space, privacy, and status. These properties are the most prestigious type of landed housing in Singapore, often located in prime residential areas and offering vast land sizes and luxurious amenities.

Each category of landed property in Singapore presents a unique investment proposition, from the efficient and communal cluster houses to the exclusive and luxurious GCBs, catering to a wide range of preferences and investment strategies.

Multifaceted Appeal

Investing in landed properties in Singapore surpasses the basic tenets of financial gain. These properties are woven into the fabric of Singapore’s history and culture, offering investors not just a financial asset but a piece of the nation’s legacy. They symbolise personal success and a commitment to a lifestyle of sophistication. Financially, these properties are a sound investment, offering stability and promising growth in a market where the demand consistently surpasses the supply, ensuring a wise choice for those seeking both material and emotional returns.

Ownership Regulations: A Brief Note

In Singapore, the ownership of landed property by foreigners is subject to specific regulations under the Land Dealings Approval Unit (LDAU). Foreign individuals or entities wishing to purchase landed residential property must seek approval under the Residential Property Act. This approval process involves assessing applicants on a case-by-case basis, with criteria including a minimum of five years as a permanent resident and making an exceptional economic contribution to Singapore.

The types of properties for which foreign persons must seek approval include vacant residential land, terrace houses, semi-detached houses, bungalows, and strata landed houses not within approved condominium developments. However, there are exceptions to these regulations, such as condominium units, flat units, and certain leasehold estates, which foreign persons can purchase without needing approval.

Sentosa Cove stands out as a unique exception in Singapore’s property market, where foreign ownership of landed properties is permitted. This area is specifically designated to attract foreign investment, offering a more straightforward path for foreigners.

The Allure of Long-term Leases

In the exclusive arena of Singapore’s landed property market, discerning investors often favour 999-year or freehold properties over standard 99-year leaseholds. This preference is rooted in the desire to safeguard the long-term value of their investment against lease decay, ensuring that the asset retains its worth over time.

The appeal of freehold properties lies not just in their resilience to market fluctuations, but also in their ability to serve as a lasting legacy. These properties become more than just assets; they are symbols of enduring success, passed down through generations, ensuring a continuity of wealth and stability. This idea of legacy planning, intertwined with the security of perpetual ownership, makes freehold properties particularly appealing. They stand as a testament to foresight and strategic planning, offering a timeless investment that preserves value far beyond the present, securing a prosperous future for coming generations. This emotional resonance, coupled with the practical benefits of long-term value retention, positions freehold properties as an ideal choice for those seeking to make a lasting impact with their investments.

The Financial Landscape of Landed Property in Singapore

Singapore’s landed property market, encompassing the Core Central Region (CCR), Rest of Central Region (RCR), and Outside Central Region (OCR), has not only exhibited a significant growth trajectory but also solidified its status as a promising investment avenue. To date, the escalating prices across different types of landed properties have highlighted their diverse allure and potential for development.

Detached Houses 

Within the detached homes segment, 2023 has seen significant investments and a marked appreciation in values. For instance, in District 5, which includes areas like West Coast Park, land prices have soared to S$1,578 psf, with some plots selling for over S$7 million. This trend underscores a robust preference for freehold properties, suggesting a strong market for houses built on larger land parcels. Notably, in District 21, freehold land in Eng Kong Garden was valued at S$1,841 psf, indicating that even outside the central districts, there is demand for significant land areas, especially for potential redevelopment which we will touch on in a bit.

Semi-Detached Houses

The semi-detached house segment in 2023 has also witnessed substantial investment activity and an increase in property values. In District 16, specifically Harvey View, the market has seen land prices reach S$1,642 psf, reflecting a demand for properties in this well-regarded locale. This enthusiasm is mirrored in District 21, where a semi-detached land on Chun Tin Road has garnered S$1,882 psf, suggesting that the appetite for semi-detached homes extends beyond the central regions. These transactions indicate a healthy market. 

Terrace Houses

The 2023 market data for terrace houses shows steady buyer engagement, with Sennett Estate in District 13 and Opera Estate in District 15 seeing land prices at S$2,315 psf and S$2,300 psf, respectively. These transactions across districts underline a consistent interest in terrace houses. The price per square foot achieved in these sales underscores their solid market presence, meeting investor and homeowner expectations. This landed property type remains a key market element, offering investment potential in a city valuing space.

The 2023 data above for prices across various landed property types showcases a robust Singaporean market where each district’s unique demand is driving property values. Investors are taking note as the market’s resilience translates into a sustained appreciation in value for landed homes. The URA’s price index increase of 5.9 per cent early in the year signals robust investor confidence and a rising demand for this property segment. This enthusiasm is partly fuelled by a societal shift towards larger living spaces, indicative of evolving lifestyle aspirations, propelling prices upward in the CCR, RCR, and OCR. These indicators not only reflect the market’s vitality but also reinforce Singapore’s landed properties as a compelling investment choice with promising returns.

Value Enhancement Opportunities 

Singapore’s landscape for landed property investment presents three distinct routes for enhancing value:

  • Reconstruction/Rebuild: This is a comprehensive approach where the existing structure is partially replaced (reconstruction) or completely torn down and replaced (rebuild) with a new custom-designed home. Reconstruction or rebuilding is a long-term investment, often taking up considerable time and effort over two years or more, but it offers a high level of customisation.
  • Additions and Alterations (A&A): A&A projects involve making selective changes to improve or extend the current structure. This option can significantly enhance a property’s functionality and aesthetic, typically requiring six to 10 months or even more to complete, depending on the scope of work. A&A can be a strategic choice for investors looking to upgrade a property’s value without the extensive timeline of a reconstruction or complete rebuild.
  • New Developer Sales: For investors seeking immediate and brand-new options, purchasing directly from developers is a viable path. These properties often come with the latest designs, modern amenities, and the assurance of developer warranties. For many investors, developer sales allow for a faster entry into the market and can offer progressive payment schedules that are cash-flow friendly.

Each of these strategies provides investors with different levels of engagement and investment, from the ground-up creation of a dream home to targeted upgrades or the convenience of a newly built property, aligning with diverse goals and timeframes in Singapore’s dynamic property market.

Strategic Investment in Today’s Market

In Singapore’s vibrant real estate market, a strategic approach to investment in landed property hinges not just on identifying current trends but also on adept financial management and a thorough grasp of regulatory nuances. The insights we’ve compiled offer a solid foundation, yet it’s crucial to understand additional factors that can influence the success of your property investments.

Navigating Current Opportunities

When considering immediate investment opportunities, it’s essential to look for properties with a good upside potential, indicative of value that could appreciate significantly over time. Keeping an eye on land with large built areas and in enclaves with planned future developments, like new business hubs, new MRT lines, or upcoming recreation amenities, can also lead to properties with high long-term value.

Financial Management

Effective financial management is crucial for property investment. Leveraging, which involves using a combination of cash, Central Provident Fund (CPF) savings, and bank loans, can maximise the purchasing power while minimising upfront cash outlay. Securing loans with the lowest possible interest rates, through methods like refinancing or locking in favourable terms at the right time, can significantly reduce long-term costs.

To add, understanding the impact of government policies like the Additional Buyer’s Stamp Duty (ABSD) and being updated on the latest Loan-To-Value (LTV) limits are also important, as they directly affect the financing of property investments. These interventions can influence the overall cost and potential returns on the investment.

Interest rates are another critical factor, with low-interest rates leading to lower mortgage payments. However, investors must be prepared for potential rate hikes, which can increase mortgage costs and affect affordability. It’s also wise to be aware of changes in loan offerings, such as the shift from SIBOR to SORA.

Investors should also plan for contingencies by maintaining a financial buffer to cover at least six months of expenses, ensuring stability against unforeseen circumstances. Attention to detail in all financial aspects, from loan terms to ongoing maintenance costs, can prevent minor expenses from accumulating and impacting the investment negatively.

By understanding these financial considerations and combining them with strategic property selection based on current market trends and future development potential, investors can navigate today’s landed house market with confidence, making informed decisions that align with their long-term investment goals.

Future Trends and Infrastructure Developments

As Singapore’s landed property market strides into the future, it’s shaped by emerging trends and infrastructure developments that cater to an environmentally conscious and technologically advanced society.

Emerging Trends

The landed house segment is seeing a rise in eco-friendly and smart home trends. Lush biophilic landscaping, green roofs, and living walls are becoming integral to modern landed homes, not only for their beauty but also for promoting biodiversity and ecological balance. Solar panels for clean energy generation and rainwater harvesting systems are being adopted, with the added benefit of selling excess energy back to the grid. Moreover, these homes are increasingly being designed with built-in electric vehicle charging stations, preparing for a future dominated by electric transportation.

In tandem with these green initiatives, smart home technology is becoming ubiquitous. Internet of Things (IoT) devices are being integrated into homes for enhanced security, energy efficiency, and convenience. Homeowners can control lighting, climate, and even garden irrigation systems with a tap on their smartphones, leading to a more connected and responsive living environment. These advanced features are not only about comfort but also about offering a sophisticated edge in property value, appealing to the next generation of homeowners who prioritise both sustainability and technology.

Upcoming Infrastructure

Landed homes stand to benefit from Singapore’s upcoming infrastructure projects, particularly those aimed at enhancing green spaces and connectivity. With the government’s push towards a car-lite society, the proximity of new MRT stations like those on the Thomson-East Coast Line, due for completion by 2024, adds a new dimension of connectivity and convenience for landed property owners. The planned Cross Island Line, expected to commence in phases from 2030, will further integrate residential areas into Singapore’s extensive public transport network.

Additionally, the URA’s Master Plan outlines the vision for more “green corridors”, connecting parks and nature reserves, which will enhance the living environment for landed property neighbourhoods. The introduction of these green spaces and upgraded connectivity not only improves the quality of life for residents but also has a direct impact on property desirability and value, making landed homes an even more attractive proposition for discerning investors and homeowners looking for a blend of luxury living and environmental stewardship.

Investing with Brand New Land

In charting the course of Singapore’s landed property market, Brand New Land stands at the forefront, embodying the integration of luxury and value-appreciation potential. Our portfolio reflects careful planning and research into the right locations and specific plots of land, as well as sound design principles which facilitate memorable lifestyles against a backdrop of space, luxury, and practicality, essential for any investor looking to capitalise on the opportunities within this dynamic sector.

With the 2023 market data indicating robust growth, we at Brand New Land recognise the importance of staying ahead of the curve. Eco-friendly initiatives and biophilic design are more than trends; they’re a statement of the lifestyle we advocate and a reflection of the value we offer. Our properties are strategically positioned to benefit from Singapore’s infrastructure developments, including new MRT lines and green spaces, ensuring that the houses we build are not only accessible but also nestled in thriving communities.

Our commitment to excellence is evident in the properties we curate, each designed to enhance the living experience while offering promising investment potential. We encourage meticulous planning and informed decision-making, as these are the pillars upon which successful property investment stands.

As Singapore progresses, so does the allure of its landed homes. Brand New Land is dedicated to providing properties that are not just living spaces but investments that grow with you and the city. To discover how our portfolio can align with your goals, contact us to find out more.