SHOULD CONDOS BE LEFT EMPTY?

The growing number of vacant condominiums in Singapore saw potential tenants viewing double the number of properties compared to two years ago.

The growing number of vacant condominiums in Singapore saw potential tenants viewing double the number of properties compared to two years ago.

This is because "there are lots of choices from newly completed projects. And as long-term expats move to newer condos, older properties are also coming to the market for tenants," according to Century 21 chief executive Ku Swee Yong in media reports.

He noted that investors may be keeping their units empty in newly completed projects in hopes of strong capital appreciation from selling it.

With this, keeping the unit vacant temporarily will facilitate viewings. Also, potential buyers who are keen on occupying the unit may not favour a property with an ongoing lease.

Ku said, "Of course, the flipside to keeping the unit empty, would be that the owner may not be aware of any defects that he could get rectified for free by the developer during the one-year defects liability period. Moreover, a new property that is left empty deteriorates faster than one that's well-used." 

He advised such owners to either rent the unit at a discounted rate or sell the property with lower expectations for capital appreciation. 

Meanwhile, R'ST Research Director Ong Kah Seng urged investors holding on to completed suburban condos, particularly small units, to consider selling the unit instead of leaving it empty.

This is because suburban condo projects "usually don't have unique designs and thus have little intrinsic resale value that can be extracted in the longer run."

Hence, a consistently unoccupied property as such may not offer financial gains in the long term.

Muneerah Bee, Senior Journalist at PropertyGuru, edited this story. To contact her about this or other stories email muneerah@propertyguru.com.sg

Source: PropertyGuru.com.sg

Date Post: 11/6/2014
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