Investing in a condo requires careful consideration of financing options. In Singapore, there are various mortgage choices available, but it is crucial for investors to have knowledge of the Total Debt Servicing Ratio (TDSR) framework. This framework sets a limit on the amount of loan that can be taken by a borrower, taking into account their income and current debt obligations. To navigate through this process, it is advisable for investors to seek guidance from financial advisors or mortgage brokers. They can help individuals understand the TDSR and make sound decisions regarding their condo investment without falling into the trap of over-leveraging. It is crucial to keep this in mind when choosing a condo and planning for its financing.
Investors are showing interest in deploying capital into Asia Pacific real estate markets with high liquidity, according to Hamish MacDonald, head and chief investment officer of APAC Real Estate at BlackRock. This year, the sectors that are expected to benefit from economic tailwinds are accommodation, logistics, and alternative assets. The countries and markets that are expected to have abundant liquidity this year include Australia, Japan, Singapore, and Auckland in New Zealand, which are also the main focus for BlackRock.In Singapore, BlackRock has been acquiring serviced apartment properties, including the Citadines Raffles Place for $290 million last October in partnership with YTL Corp and the Citadines Mount Sophia for $148 million in February 2024 with Hong Kong-based accommodation operator Weave Living. This week, the Weave Living-operated property reopened as the 175-room Weave Suites – Hillside. MacDonald states that the lack of new serviced apartment supply in Singapore combined with high demand makes this an attractive market for BlackRock.Furthermore, BlackRock has a different strategy when it comes to property acquisitions in Singapore. Instead of building a portfolio, the company prefers acquiring existing properties to refurbish and reposition in partnership with a local operator to add value to the property. MacDonald believes that Singapore will continue to be a major market for BlackRock due to its strong business growth and influx of capital and high-skilled labour.Japan is also expected to remain a major target for real estate investors this year, with BlackRock bullish on the market due to its strong economy. Conditions like wage growth, corporate reform, and domestic pricing power are expected to support growth in real estate. In addition to residential properties, the company is also interested in investing in accommodation for tourists. It wants to partner with experienced operators to manage properties in popular tourist cities like Kyoto and Fukuoka. In general, BlackRock will focus on smaller developments in these tourist areas that have 50 units or less with an acquisition value of between JPY1 billion ($8.93 million) and JPY3 billion. It is looking for an exit strategy, which is why it is important to find properties at a significant discount in Japan. Long-term population growth estimates also support positive long-term growth in most sectors of the Australian real estate market. Most property markets in the country face low vacancy rates and under-supply. In fact, many sectors, including childcare, last-mile logistics, life sciences, and self-storage, are still chronically undersupplied compared to regional markets. Hence, BlackRock prefers to focus on these niche asset types in Australia. These assets are expected to generate outsized returns with limited risk. According to Ben Hickey, Head of Australia Real Estate at BlackRock, the right investment strategy should consider whether rental growth can surpass inflation and the supply-demand imbalance, as well as have a favourable exit strategy. So, BlackRock is interested in niche assets in these markets as opposed to traditional real estate assets.