Are 1 Bedroom Units A Good Investment? (Analysing 3,834 Transactions)
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- čas přidán 10. 07. 2024
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You probably won't be surprised to hear that 1 bedroom units are usually the first to sell out. To give you examples, recent new launches like Midtown Modern (90% of 1 and 2 bedroom units sold at launch), Irwell Hill Residences sold over 50% of its units (81% of its units are 1 and 2 bedroom), and One-North Eden on the weekend - selling out its 1 and 2 bedroom units by 10am.
Do note:
We restricted our findings to units of 600 sq. ft. or below; units of this size would be considered a one-bedder today. We are looking at size because the term “one-bedder” has changed over time; for old condos there are even 900+ sq. ft. units that are labelled “one-bedders”.
We have also kept to transactions dated 14 January 2011 or later. This is when the Sellers Stamp Duty (SSD) was imposed. Transactions before this date could have been sub-sales (e.g., buying and selling the unit before it’s even completed), which would distort the view of potential returns.
Here are some of our key findings:
- Prime region 1 bedroom units fare the worst for gains
- There’s continued evidence that 1 bedroom units have superior yields
- Returns can get worse over longer holding periods
- Leasehold has generally outperformed freehold
- Smaller 1 bedroom units generally lose more
- Overall, profitable transactions significantly outnumber unprofitable ones
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Chapters:
0:00 - Intro
1:00 - #1 - Prime Area 1-Bedroom Has The Highest Unprofitable Transactions
2:23 - #2 - 1-Bedroom Units Have Superior Rental Yields
3:12 - #3 - Leasehold Tends To Outperform Freehold
4:25 - #4 - Smaller 1-Bedroom Units Do Worse In Capital Gains
5:36 - #5 - Profitable Transactions Outweigh Unprofitable Transactions
7:18 - What Does This Mean Moving Forward?
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Would you buy a 1-bedroom unit as a property investment? Share your thoughts in the comments below!
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Nope. There are many investment vehicles out there.. properties are meant to stay, not to speculate..
@@MrJasonjace
If properties are meant to be own stayed, then there will not be any rental units available in the market, and everybody needs to buy.
Property investment is a good source of passive income if you can afford it, in the form of rental income. It need not necessarily be for speculation.
Hi Jonathan.. Ty for explaination.. I think you just explained something that I couldnt.. so ty.. =)) What I meant to say is, properties are meant to stay whether be it own, short rental or long lease.. As for the person who rent/lease out, it is to secure wealth and to gain passive income (as u mentioned) at the same time.. but truth be told, many properties owners in Singapore (and around the World) tend to over leverage w/o knowing or self checking.. Hence speculate.. i.e. owing 800,000 to millions thinking that they are able to return even over 25~30 years
@@MrJasonjace
Speculation of property was quite common in the past in Singapore, where property buyers snapped up property and sell them for a good profit in the short term, pushing property prices sky high.
Government has since imposed seller stamp duty whereby buyers would need to pay tax up to 12% of the selling price of the property within the first year of purchase. This has somewhat curb the speculation activities to a certain extent.
Super interesting, would love to hear a similar analysis on the trends on 2-bedroom units.
Great suggestion! Thank you!
Wow.. straight to the point with figures! Solid research with good quantity and quality.. no BS 👍
Thanks! Glad you like it!
For a simpleton like me. The abbreviations are confusing. Would be nice to have a blurb or smth :)
Thank you for your feedback!
Very informative! Will be great to do rental yield gains and capital gains between condo vs HDB
Thanks!! 🍎
Thanks for your feedback! We'll look into it!
Great episode
Thank you!
Would love to hear thoughts on the implications of purchasing this for own stay for singles under 35. Thanks!
Hey! If it's for own stay, then there's really nothing wrong with that. In fact, buying a 2-bedroom can be quite wasteful for a single, unless you intend to use the full space or rent out the other room for extra income? So long as it meets your own-stay criteria, not everything can be measured in financial terms. If it's for investment though, then it's different!
Another awesome episode! It sounds like after everything 1 bedroom unit remains skeptical about capital gains especially when you are not renting it out
Hey Kelvin! Yes actually our general outlook is that due to the supply mix, 1-bedroom tends to be more competitive due to price issues, and since they're generally investor-led, many of these investors are willing to sell for lower since they make from their rental gains, as opposed to more family-oriented units.
@@StackedHomes Thank you very much for your insight
Fantastic content
Glad you think so! Thanks for watching 🥰
if i buy from resale market for a unit which 1 year old, for staying not investment, how long optimally should i keep it before considering to upgrade. what factors i should consider before selling? should i continue to keep as hedge as rental at the same time considering to purchase a 2 bedder?
Hey Ro Nin! Wow these are pretty loaded questions that can't be answered without more details. It depends a lot on what you've bought, why you bought it and your overall objectives. We would always find out what the best "holding period" is on average across the past 2 decades but ultimately it'd be an average and is meaningless without knowing your situation. You could drop us an email to hello@stackedhomes.com if you'd like a more in-depth discussion. Thanks!
Just signed a contract for 1 bedroom in Sydney after thinking so much. You get what you pay. 2 beds, you have to borrow more money, pay more and you have to rent out to save money and you dont have privacy. You always live with strangers.
1 bed you pay less and keep privacy.
1 vs 2: not much difference
What is the prime age to sell a 1 bedder leasehold condo before lease decay kicks in?
Hey! It depends on the condo itself, so it's hard to say. But a study done by NUS shows that for leasehold properties, the decay accelerates past the age of 20.
given how crazy the prices have been, is it more likely that prices will come down upon TOP, rendering the "TOP effect" negative?
Hey! It's hard to say whether that is the case as it's hard to say where we are in the property cycle now.
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is reuben a licenced real estate agent?
Hi Sherwin, no he's not.
Is this a podcast by itself?
Hey there! This isn't part of our main podcast series, but our opinions series. Would you prefer this to be in the podcast too?
@@StackedHomes in my personal opinion yes i would love too..
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