Singapore landlords are quick people to ascertain that they are dealing with the double rental market when it comes to renting their properties. These two markets are The Core Central Region (CCR) as well as Rest of Central Region (RCR) and Outside Central Region (OCR) which are wildly total different. Core Central Region has a huge difference from the rest two and works in totally different ways from the rest two. To get differences between these two different markets, here is the analyzed guideline outlining each:
Core Central Region Properties Have Lower Yields Historically
For centuries these properties have been yielding low incomes to landlords. Once you deduct maintenance, stamp duties, taxes, as well as renovation from annual income, the rental yielded is very low compared to the cost of the property. Thus, it means when the property is very expensive, you should expect to get low rental earnings. This has forced many landlords to hike rents beyond the standards in order to cater to countless expenses such as properties tax, maintenance costs, agent fee, renovation among other costs. These expenses have seen CCR condos yielding very low rents ranging from 2.5 percent to 3.5 percent while OCR is able to reach a 4.0 percent mark. OCR condos have relatively low cost. This has made them easily accessible. This has made many tenants to flood in these properties leading them to yields big return since many can afford them. Haus on Handy is located in the core city centre and therefore represents a good unit for investment and rental. Combined with the many shopping centres as well as Dhoby Ghaut MRT Station, Haus on Handy will be one of the better located developments for rental and investment. Please see tips on how to get your house ready for spring as well as whether is it a good idea to move house or renovate your unit.
CCR Has Proved To be More Resistance To Oversupply
The time comes when rental market experiences vacancy rates at a high level even almost 10 percent. This may be as a result of foreign workers quotas getting tightened. This leads to a reduction of tenants. However, the more significant factor in oversupply. Every day there is new private development rising on the ground. However, CCR I least affected. Since the supply experiences least oversupply, rental yields are least affected like others which experience extreme oversupply due to their low cost leading to decreased rental yields. This factor makes the CCR remain the most trusted rental market since they guarantee modest yields throughout the year.
Demand for Rental at Core City Centre
Most RCR/ OCR condos are occupied by expatriates. This is because their house allowances are catered by the companies they are working with. This forces some to move from CCR condos which are charging much higher rents to the condos charging cheap and affordable rents in order to shrink the house allowance and use it for other purposes. RCR and OCR condos lack consistency as compared to CCR. CCR are well established and have a visible brand. They may charge higher prices, but at the same time, they get tenants. While OCR/ RCR are gambling properties. These low-cost properties may be located in inconveniences places over rounded by residential properties. Also, they may be providing poor facilities which may make people run away from them.