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Learning Through Course in Real Estate

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Learning Through Course in Real Estate – Education – Special Education

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It has been observed that the recently imposed Additional Buyer’s Stamp Duty (ABSD) on certain categories of residential properties has some far reaching effects and there are certain conditions wherein there are chances of spill over of demand to non-residential properties like industrial, retail or office strata units.

It has been observed that increases in industrial rents and the low interest rate environment also prompted more ownership/investment so that rental cost is controlled for companies while investors get to enjoy better returns. It has also been analyzed that the maximum number of buyers in the industrial unit are the companies and the people of Singapore form 25% and the rest is completed by foreigners. Though, over all the number of Singaporeans has increased their proportion in total investment in this sector has decreased.

The main reason behind this is evident if you take the real estate sales training wherein you will know that the shorter tenure of the Industrial strata developments area. They are built on lands with tenure varying from 30/60/99/999-year leasehold or freehold. But the most common tenure for industrial developments is either 30- or 60-year leasehold as they are built on lands sold under the GLS Programme. Comparatively most residential, office and retail strata developments sit on lands with a 99-year lease. This means that investors in industrial strata units face higher risk as the tenure is shorter.

The people of Singapore are more familiar with residential developments as it is a part of their life but not industrial development. The investor also feels that if the investor is unable to rent out his industrial strata unit, the unit will be left vacant. It is unlike a residential unit where he can move in to stay for a while looking for a tenant.

The RES Course Provider will make it clear to you that interest rate on loans for non-residential property is higher than that charged by banks for loans on residential property. Because of the higher risk involved in a non-residential property purchase, investors are compensated in the form of higher rental returns for such properties.

Based on upfront cash alone, investors would be better off investing in an industrial strata unit rather than a private residential unit. But it should be noted that the tenure for the two types of properties are different. The price difference between a 99-year leasehold and a 60-year leasehold property can be as much as 25 per cent.

After accounting for the difference in tenure, investors would be better off buying a private residential unit. But if tenure is not an issue, investors can consider buying an industrial strata unit since it offers better rental returns in exchange for the risks involved.

The course in real estate will show it to you that there might not be spill over demand to the strata non-residential market. By imposing the ABSD, the Government is simply trying to balance out the demand in both the residential and non-residential market, letting investors decide if the difference is sufficient to cover the risks. The recent policy on a minimum size for an industrial strata unit means those investors have to fork out a higher quantum upfront thereby increasing their risk exposure.

About the Author

Pioneer Training & Consultancy Pte Ltd is a recognized core competency based RES Course Provider and Real Estate Sales Training provider. We are one of the CEA approved Course in Real Estate in Singapore

Use and distribution of this article is subject to our Publisher Guidelines
whereby the original author’s information and copyright must be included.

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Pioneer Training & Consultancy Pte Ltd is a recognized core competency based RES Course Provider and Real Estate Sales Training provider. We are one of the CEA approved Course in Real Estate in Singapore












Use and distribution of this article is subject to our Publisher Guidelines
whereby the original author’s information and copyright must be included.

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