Singapore property yields have been on an overall downtrend since the recovery in 2009 from the global financial crisis.
In the depth of the global financial crisis, yields across Singapore were at a historic high of 5.0% in the overall segment, 5.3% in the Mass Market segment and 4.6% in the City and City Fringe segment, as measured by Squarefoot Research.
Fast forward 8 years to 2017 and yields are at a historic low of 3.2% in the overall segment, 3.4% in the Mass Market segment and 3.1% in the City and City Fringe segment.
Looking back 15 years, yields in Singapore’s residential market has never been lower.
Take heart that Singapore is not alone, because yields in all real estate asset classes have just been falling and testing new lows.
[Also read: leasehold or freehold? Which do developers prefer?]
REITs, with their main holdings of real estate, are also not spared, though Singapore REITs are still yielding an average of 6%.
What has driven this drastic drop in residential yields is mainly the increase in property prices.
While not as sharp as Hong Kong’s 170% rise in property prices, Singapore’s URA property price index also showed an 80% rise from the trough in 2009 to peak in 2013.
Can value still be found in Singapore’s residential market?
Here are 10 projects that have the highest yield based on transactions in the last 12 months.
|District||Project name||Tenure||Completion||Avg price $psf||Avg rent psf pm||Yield (%)|
|9||SUITES AT ORCHARD||99 YRS FROM 2007||2014||1,455||6.2||5.1|
|2||LUMIERE||99 YRS FROM 2006||2010||1,472||6.1||5.0|
|12||ASCENT @ 456||FREEHOLD||UNCOMPLETED||1,020||4.1||4.8|
|1||PEOPLE’S PARK COMPLEX||99 YRS FROM 1968||1972||916||3.5||4.6|
|21||THE HILLFORD||60 YRS FROM 2013||2016||1,225||4.5||4.4|
|14||WING FONG COURT||FREEHOLD||1997||734||2.7||4.4|
|18||MELVILLE PARK||99 YRS FROM 1992||1996||656||2.3||4.3|