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Is there such thing as a recession proof rental property?
Will properties around university and hospital provide a good safety net for rental property?
Is there such thing as a recession proof rental property?
Will properties around university and hospital provide a good safety net for rental property?
u have something there.
when people are retrenched, they will use their retrenchment money to upgrade their skills or take another degree to prepare for the next boom. more lecturers are needed and there will be demand for rental properties near university
when people are retrenched, they are stressed. Stressed people tends to fall sick easily. More people fall sick, more doctors/nurses needed. So there will be demand for rental properties near hospital.
so best place for rental is near NUS/NUH. have both university and hospital. double protection
u have something there.
when people are retrenched, they will use their retrenchment money to upgrade their skills or take another degree to prepare for the next boom. more lecturers are needed and there will be demand for rental properties near university
when people are retrenched, they are stressed. Stressed people tends to fall sick easily. More people fall sick, more doctors/nurses needed. So there will be demand for rental properties near hospital.
so best place for rental is near NUS/NUH. have both university and hospital. double protection
Beside what's mentioned, I also think that universities and hospitals are employing more and more foreign doctors to cope with the rising and aging population so there will always be demand for rental property around those area.
Allthepies
05-07-12, 20:15
the only i can think of is dormitory for construct workers. 100% recession proof but u need millions to build and own it.
HDB rental is recession-proof.
No matter what the economy is like, there is always a market for HDB.
u have something there.
when people are retrenched, they will use their retrenchment money to upgrade their skills or take another degree to prepare for the next boom. more lecturers are needed and there will be demand for rental properties near university
when people are retrenched, they are stressed. Stressed people tends to fall sick easily. More people fall sick, more doctors/nurses needed. So there will be demand for rental properties near hospital.
so best place for rental is near NUS/NUH. have both university and hospital. double protection
i have the same conclusion but more because the jobs at uni and hospi are recession proof...so demand for housing by these people shouldn't change significantly..and like u said demand is actually growing:D :D
felicia_sg
05-07-12, 21:41
Don't think upper income people go NUH.
You go Mt Eliz or you go NUH?
Mt E doctors higher income than NUH generally because more experience.
University housing allowance quite low ones generally. Otherwise condos all around NUH & NUS won't be commending $3+ psf pm only.
u have something there.
when people are retrenched, they will use their retrenchment money to upgrade their skills or take another degree to prepare for the next boom. more lecturers are needed and there will be demand for rental properties near university
when people are retrenched, they are stressed. Stressed people tends to fall sick easily. More people fall sick, more doctors/nurses needed. So there will be demand for rental properties near hospital.
so best place for rental is near NUS/NUH. have both university and hospital. double protection
I would say small downtown apartments next to mrt stations. As long as there are renters, these will fill up first. It's only a matter of at what price during a downturn.:2cents:
Allthepies
05-07-12, 21:50
HDB rental is recession-proof.
No matter what the economy is like, there is always a market for HDB.
Hdb should be the worst hit at the bottom of the food chain.
Allthepies
05-07-12, 21:51
Another recession proof property is hospital. Again u need millions of funds to own it.
Worst hit? Well, I have never seen an empty HDB.... there is always a market.
Post '97, there were scores of empty uptown upscale condos.
Hdb should be the worst hit at the bottom of the food chain.
Trapping-bird
05-07-12, 22:17
Beside what's mentioned, I also think that universities and hospitals are employing more and more foreign doctors to cope with the rising and aging population so there will always be demand for rental property around those area.
Now not only doctors foreign, everything in Singapore are foreign.. Doctors, nurses, manager, geylang girls, etcetc.. 40% now all foreign....
I am not sure how many doctors you know, but of those you know, how many actually stay near the hospital? (within 1km).
And among those who don't stay near the hospital, how many desire to stay near a hospital? I would be surprised if there are any....
As for the foreign nurses, general duties staff...etc because of their lower pay, their criteria for rental is a bit different... so what is their rental residence of choice? ...HDB
i have the same conclusion but more because the jobs at uni and hospi are recession proof...so demand for housing by these people shouldn't change significantly..and like u said demand is actually growing:D :D
Hdb should be the worst hit at the bottom of the food chain.
Worst hit can mean being hit the most badly or not really hit at all (least hit).
I think HDB can adjust rent down easily.
Don't think upper income people go NUH.
You go Mt Eliz or you go NUH?
Mt E doctors higher income than NUH generally because more experience.
University housing allowance quite low ones generally. Otherwise condos all around NUH & NUS won't be commending $3+ psf pm only.
I think rental demand are more driven by people working in hospital, not patients.
University income low, cost of housing around NTU and NUS also relatively low/
thomastansb
05-07-12, 23:09
Properties are not recession proof. In fact, they are quite bad bets. Near NUS or NUH doesn't matter. Actually, nothing is recession proof. Recession resilient yes. Recession proof is a dream. Go for Casino or F&B or Medical industry if you want to weather recession better. But recession resilient industry often have lower yields and slower growth since during upturn, they have nothing much to grow.
HDB rental is recession-proof.
No matter what the economy is like, there is always a market for HDB.
:cheers4::cheers4::cheers4::cheers4::cheers4::cheers4:
Is there such thing as a recession proof rental property?
Will properties around university and hospital provide a good safety net for rental property?
KOPI TIAM is recession proof
IMH, Funeral Home.......changi beach
Properties are not recession proof. In fact, they are quite bad bets. Near NUS or NUH doesn't matter. Actually, nothing is recession proof. Recession resilient yes. Recession proof is a dream. Go for Casino or F&B or Medical industry if you want to weather recession better. But recession resilient industry often have lower yields and slower growth since during upturn, they have nothing much to grow.
Publicly funded education and healthcare industry are actually recession proof, during good time or bad times, government will still pump in money into the industry and people will still need to go school or see a doctor if they are ill.
In fact most of the time during recession, government will actually increase their budget to promote skill upgrading. And with aging population, demand for public healthcare can only go up and never come down.
So why would property near university or hospital be a bad bet like you said?
I think you are confusing stock yield to rental demand.
Hdb should be the worst hit at the bottom of the food chain.Actually I beg to differ. HDB should be the most protected coz its at the bottom of the chain, not food chain though. Well, when CCR properties are asking $5k/mth rental, people gladly pay during boom times. However, they'll probably only pay $3k/mth when the going gets tough. That leaves them with HDB. However, if you argue that CCR property owners will lower to $3k/mth, nothing is stopping HDB owners to lower to $1.5k/mth. I am beginning to see not just Chinese and Indian families moving into HDB but Eurasian families too, a sight never conceived 10 years ago... :cheers6:
Allthepies
06-07-12, 08:54
Worst hit can mean being hit the most badly or not really hit at all (least hit).
I think HDB can adjust rent down easily.
both can adjust rent down easily, however maximum rent of hdb is always cap by minimum rent of condo.
hdb rental always take command from condo rental. condo rental price at 1k/mth, all hdb unit wanting to lease out will be vacant.. get wat i mean? all tenants will just grab the condo units first, those leftover tenants will then go for hdb.
(based on assumptions that Singapore is going into many years of recession, so die die rent out get some $$$ rather than leave it vacant :D:D:D:D)
We can learn from the '97 Asian financial crisis.
In good times when rents are high, people who usually rent condos downgrade to HDB. This is the case now...
In bad times, those who are already renting HDB will stay put.... those who are in Condos may even downgrade to HDB...why? because if times are bad, people are tight-fisted and will seek to economise.
So regardless of good or bad times, there is always a demand for HDB.
Post '97, many condos were left vacant bcoz there was just too much choice available. All the expats with their big housing allowance just left. I remember my condo was vacant for nearly 8mths despite slashing the rental.... agent said hardly anybody even calling to enquire.
Meanwhile HDB rental was still brisk... its all about the quantum, the HDB rentals are so low that anybody can afford.... around 2003, HDB rentals were so in demand that HDB landlords were starting to up their rentals. It reached a point that tenants were starting to find more value in renting condos... this in turn helped push the condo rentals up.
both can adjust rent down easily, however maximum rent of hdb is always cap by minimum rent of condo.
hdb rental always take command from condo rental. condo rental price at 1k/mth, all hdb unit wanting to lease out will be vacant.. get wat i mean? all tenants will just grab the condo units first, those leftover tenants will then go for hdb.
(based on assumptions that Singapore is going into many years of recession, so die die rent out get some $$$ rather than leave it vacant :D:D:D:D)
thomastansb
06-07-12, 10:42
I am confused. You are talking about property rental near hospital? Or stock dividend from hospital?
Publicly funded education and healthcare industry are actually recession proof, during good time or bad times, government will still pump in money into the industry and people will still need to go school or see a doctor if they are ill.
In fact most of the time during recession, government will actually increase their budget to promote skill upgrading. And with aging population, demand for public healthcare can only go up and never come down.
So why would property near university or hospital be a bad bet like you said?
I think you are confusing stock yield to rental demand.
Try HDB shops/shophouses, especially those in areas with good traffic and selling basic necessities or doing typical heartland-centric trades.
Almost totally unaffected by recession. In fact business might thrive during hard times as more people cut back on spending at malls and high-end shops, and choose to get their stuff done at these cheaper alternative locations instead.
It comes to location, location, location at the end of the day, private or HDB. HDB in say, Tanjong Pagar will be easier to lease out than an condo in Ponggol in a recession..... assuming that rentals drop to meet diminishing demand.
Correct... that's the bottom line. Location, location, location
It comes to location, location, location at the end of the day, private or HDB. HDB in say, Tanjong Pagar will be easier to lease out than an condo in Ponggol in a recession..... assuming that rentals drop to meet diminishing demand.
HDB is the best. I have a feeling that in a few years' time when the demand is actually met with the TOP of BTOs, government will make renting out of HDB more restrictive, as it will have its own stock of unsold flats to rent out to.
Shoeboxsupporter
06-07-12, 22:39
I beg different, MM is the most recession proof, for those rich suddenly become poor , stay at MM is a good choice instead of HDB- lost face.......:tongue3:
I beg different, MM is the most recession proof, for those rich suddenly become poor , stay at MM is a good choice instead of HDB- lost face.......:tongue3:
MM in recession is not proven. In fact I don't think most MMs have undergone recession. HDBs have withstood the test of time and several recessions, but let's not have recessions to test your theory.
Allthepies
06-07-12, 23:56
We can learn from the '97 Asian financial crisis.
In good times when rents are high, people who usually rent condos downgrade to HDB. This is the case now...
In bad times, those who are already renting HDB will stay put.... those who are in Condos may even downgrade to HDB...why? because if times are bad, people are tight-fisted and will seek to economise.
So regardless of good or bad times, there is always a demand for HDB.
Post '97, many condos were left vacant bcoz there was just too much choice available. All the expats with their big housing allowance just left. I remember my condo was vacant for nearly 8mths despite slashing the rental.... agent said hardly anybody even calling to enquire.
Meanwhile HDB rental was still brisk... its all about the quantum, the HDB rentals are so low that anybody can afford.... around 2003, HDB rentals were so in demand that HDB landlords were starting to up their rentals. It reached a point that tenants were starting to find more value in renting condos... this in turn helped push the condo rentals up.
Demand goes to HDB when the condo owners refuse to cut their rentals drastically thinking tat the recession is short and recovery is fast. A prolonged recession that span many years or even decades will hit HDB the most. Why? Becos then the condo owners realise tat they are better off renting out than left their units vacant permanently. So condo owners will slash their price until tenants bite. HDB owners will have to queue behind condo owners for tenants at similar location. Most prob not enuff tenants to go around to fill all the condos, so naturally HDB all left vacant.
So anyone still say HDB is recession proof? I can only agree HDB is recession proof for a short time when owners r not desperate enuff.
What you said resonance in mind again as I review back to some time in 2003....
HillView area condo 3 bedroom $1200 pm!
North-East 5 room HDB flat - can't even rent out at $1000 pm! :scared-1:
It makes sense isn't it that if 3 bedroom condo rent at $1000 pm, who want to rent 5-room HDB flat near by with zero facility, need to pay extra for car park, etc?
Demand goes to HDB when the condo owners refuse to cut their rentals drastically thinking tat the recession is short and recovery is fast. A prolonged recession that span many years or even decades will hit HDB the most. Why? Becos then the condo owners realise tat they are better off renting out than left their units vacant permanently. So condo owners will slash their price until tenants bite. HDB owners will have to queue behind condo owners for tenants at similar location. Most prob not enuff tenants to go around to fill all the condos, so naturally HDB all left vacant.
MM in recession is not proven. In fact I don't think most MMs have undergone recession. HDBs have withstood the test of time and several recessions, but let's not have recessions to test your theory.
Shoebox units had gone through the 08/09 recession and did much worse than the bigger private units according to the NUS Institute of Real Estate Studies. There is now a much bigger supply of shoebox units than in 08/09, so it is very likely that shoebox units will do even worse in the next recession than the previous recession.
Don't think upper income people go NUH.
You go Mt Eliz or you go NUH?
There are many types of "rich" people.
If you have a chance to visit the new NUH Tower, their sea facing Suites can easily compete with private hospitals.
If you are top "public servant", you still go NUH and pay small amount of money.
Of course, private doctors (including US experts) can come to visit you at NUH.
So "rich" people do go NUH.
Thanks,
Richard
I beg different, MM is the most recession proof, for those rich suddenly become poor , stay at MM is a good choice instead of HDB- lost face.......:tongue3:
1) Rich locals own properties; they don't need to rent MM;
2) Rich Expats will go back to their home countries in recession, so they don't need to rent MM;
3) Single locals will go back to parents' HDB if they are hit by recession;
So when recession comes, MM rental will be hit.
Thanks,
Richard
PS. I am also a MM support, you can just buy more MMs in recession and hold to get much higher rental yield when recession is over.
I think it's pointless to talk about "investing" in HDB. It's got too many restrictions and you can't buy a 2nd HDB flat if you qualify to buy one in the first place.
1) Rich locals own properties; they don't need to rent MM;
2) Rich Expats will go back to their home countries in recession, so they don't need to rent MM;
3) Single locals will go back to parents' HDB if they are hit by recession;
So when recession comes, MM rental will be hit.
Thanks,
Richard
PS. I am also a MM support, you can just buy more MMs in recession and hold to get much higher rental yield when recession is over.
You forgot the bulk of expats or EP holders - the not so rich expats with pay between 6-8k.
MM will continue to huat no matter what the market transform into. It has been proven many times over for the TESTED locales.
Taken fr today ST:
Savills Singapore research head Alan Cheong said: 'The demand
for small-format homes and suburban homes is expected to rise
as rental budgets diminish. Owing to increasingly greater
completions and the leasing out of these small-format units,
islandwide median rents may increase marginally by up to 5 per
cent by the end of the year.'
So do we listen to the experts?
If u speak of recession, MM being low quantum, esp those bought few yrs back, rental can drop until matching hdb levels without making a loss.
Yes... like I mentioned earlier, things only started to look up in 2003.
Btw, did you examine what happened between 1997-2003?
Have you ever wondered how long the Hillview 3bdrm Condo went empty before it had to slash its price to $1200? Also how many revisions and slashing of rental before it dropped to $1200?
Its not that simple... I know, I was a landlord during that period.
The CCR condos were still relatively easy to rent out but rental was severely depressed. The OCR condos were languishing... swatting flies. If your condo is Yishun or Choa Chu Kang..etc ... forget it... be prepared to slash prices and expect prospective buyers/tenants to lowball.
Meanwhile, location for location, the HDB rental is still resilient. Because the quantum is low, price adjustments are easily revised downwards to match the market. Not so for condos..
If you pay $1.5M expecting $5000/mth rental, how long will you hold on to your expectation of $5000/mth rental before you drop to $1200/mth? 1mth, 6mths... 1year...or more?
What you said resonance in mind again as I review back to some time in 2003....
HillView area condo 3 bedroom $1200 pm!
North-East 5 room HDB flat - can't even rent out at $1000 pm! :scared-1:
It makes sense isn't it that if 3 bedroom condo rent at $1000 pm, who want to rent 5-room HDB flat near by with zero facility, need to pay extra for car park, etc?
How long a condo is empty depends on how long the owners can tolerate without rent. In CCR, many owners can leave their condos empty for >10 years without sweating, so problem.
On the other hand, when price slashing comes because of prolonged recession, say everybody willing to slash till $1000 pm, and there are only 10k renters, so what will be the order in which the condos be rented out assuming that there are more than 15k properties available for rent (meaning 5k will be empty ultimately)? Is it right to say that the sequence will be:
1) CCR luxury condos in good location
2) the rest of CCR condos in so-so location
3) RCR condos in good location (relative to RCR areas)
4) RCR condos in so-so location
5) OCR condos in good location (relative to OCR areas)
6) OCR condos in so-so location
7) HDB flats in good location
8) HDB flats in so-so location
So I just can't see how can HDB flats rental be resilient in above case? :ashamed1:
It is resilient only when the many condo owners don't want to slash price and prefer to keep their units empty.
Given a choice of OCR condo in good location willing to rent at $1000 pm vs a HDB flat in same location and at same rental, which would a rational person choose to rent? The answer is obvious right? :beats-me-man:
Yes... like I mentioned earlier, things only started to look up in 2003.
Btw, did you examine what happened between 1997-2003?
Have you ever wondered how long the Hillview 3bdrm Condo went empty before it had to slash its price to $1200? Also how many revisions and slashing of rental before it dropped to $1200?
Its not that simple... I know, I was a landlord during that period.
The CCR condos were still relatively easy to rent out but rental was severely depressed. The OCR condos were languishing... swatting flies. If your condo is Yishun or Choa Chu Kang..etc ... forget it... be prepared to slash prices and expect prospective buyers/tenants to lowball.
Meanwhile, location for location, the HDB rental is still resilient. Because the quantum is low, price adjustments are easily revised downwards to match the market. Not so for condos..
If you pay $1.5M expecting $5000/mth rental, how long will you hold on to your expectation of $5000/mth rental before you drop to $1200/mth? 1mth, 6mths... 1year...or more?
In reality, nobody knows how long a recession will last, a lot of people hold on to the hope that their rental expectation will be met, bcoz once you agree on a rental, the commitment is for 2 years, a lot of people are unwilling to budge on their price till its too late, then it gets further deepressed.
I think we'll have to agree to disagree on this one
Demand goes to HDB when the condo owners refuse to cut their rentals drastically thinking tat the recession is short and recovery is fast. A prolonged recession that span many years or even decades will hit HDB the most. Why? Becos then the condo owners realise tat they are better off renting out than left their units vacant permanently. So condo owners will slash their price until tenants bite. HDB owners will have to queue behind condo owners for tenants at similar location. Most prob not enuff tenants to go around to fill all the condos, so naturally HDB all left vacant.
So anyone still say HDB is recession proof? I can only agree HDB is recession proof for a short time when owners r not desperate enuff.
Shoebox units had gone through the 08/09 recession and did much worse than the bigger private units according to the NUS Institute of Real Estate Studies. There is now a much bigger supply of shoebox units than in 08/09, so it is very likely that shoebox units will do even worse in the next recession than the previous recession.
I don't trust the NUS index for MM before year 2009 becoz there were not many of them around to provide a reliable gauge.
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