The importance of location cannot be ignored when investing in property in Singapore. There are two areas of particular interest to investors, namely the Core Central Region (CCR) and the Rest of Central Region (RCR). Each region has some unique benefits and possible yields, thus, it is important to know the differences.
Understanding CCR and RCR
Core Central Region (CCR) encircles the opulent Orchard, the illustrious Newton, and the ultra-modern Marina Bay. CCCR has luxury properties. It is the most desirable and expensive areas in Singapore.
The Rest of Central Region (RCR) comprises the areas that are outside the CCR. It includes neighbourhoods like Queenstown, Bukit Merah and Geylang. Properties in this area offer closeness to the city center at more affordable prices.
Price Trends and Entry Points
CCR properties are properties that are identified as luxurious and are known to be expensive in excess of S$1,500 psf. As a general rule, they are very stable investments. This is because they are likely to receive a steady demand from both affluent locals and foreign buyers who look for luxury real estate in Singapore.
RCR properties are not as expensive as CCR and offer a lower PSF. It is a good entry point for investing. This area has good likelihood of capital appreciation as the city matures.
Rental Yield Potential
The demand for rentals from expats remains steady in the CCR despite rental yields being at 2%-3% in the CCR.
Investors anticipating impressive rental yields (generally 3%-4%) as tenants favour city-fringe locations that offer better value for money.
Capital Appreciation Prospects
Investing in CCR properties is probably best for investors seeking long-term capital growth or those looking for wealth preservation.
Efforts to rejuvenate have focused on certain older parts of the urban centre to attract new residents and businesses.
Who Should Invest Where?
If you are a high net worth individual in search for prestigious assets, which are stable and good for long-term wealth preservation.
Buy an RCR Property if: You are a mid-tier investor looking for higher rental income and capital appreciation within a shorter time-frame.
Future Outlook
With the government ongoing redevelopment in the region and better connectivity with upcoming MRT lines, the RCR has a strong growth potential for the longer term. Properties in the CCR will continue to attract ultra-high-net-worth buyers, proving their resilience.
Contact me today for more details on which region offers the best investment returns.
