How to tell if a property has good potential for capital appreciation

Almost every real estate agent in a showflat will tell you the project has great potential for capital appreciation. This means you could make a good deal of money in the future after holding the property for a number of years. However, like former American president Richard Nixon said, “Trust, but verify.” Here are three tips for investigating a property’s potential.

1. Check the Masterplan

Our government is quite transparent with planning information, and most of it is publicly accessible. The latest revision to the URA Masterplan was in 2014, and details the changes planned for decentralized CBDs around Singapore, including Paya Lebar, Woodlands and Jurong. These changes suggest an influx of infrastructure, amenities and facilities that would definitely increase property prices in the area.

2. En-bloc potential

Those looking for properties that could potentially be en-bloc should look out for changes in plot-ratio in the Masterplan. This means that developers will be able to build more units on that piece of land than they previously could. Developers could make more money re-developing the land, and would therefore be interested to collectively buy over the units. Don’t restrict yourself to residential property for this — a lot of plot ratio changes are for both residential and commercial properties.

3. New transport links.

Our rail system has changed dramatically since the late ‘80s, with the first MRT trains. By 2030, the system is set to transform even further, with the planned Thomson-East Coast Line, Cross-Island Line, and the completion of construction for the Circle and Downtown lines. The convenience of train links will cause property prices to rise, so keep an eye on news of where upcoming stations will be located.

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