Investing in property is a significant decision, and choosing the right region can have a significant impact on your investment returns. In Singapore, two prominent regions that attract investor attention are the Rest of Central Region (RCR) and the Core Central Region (CCR). Understanding the nuances and potential of these regions is crucial for maximizing your investment returns. Especially when during the last 3 months of 2023, Singapore is still hot on its new condo launches in these two regions.
In this blog post, we will delve deep into the comparison of RCR and CCR, exploring factors such as property prices, rental yield potential, capital appreciation, growth prospects, lifestyle amenities, and affordability. By the end, you’ll have a comprehensive understanding to make an informed investment decision.
Understanding RCR and CCR
image source: URA
To begin our analysis, let’s gain a deeper understanding of the Rest of Central Region (RCR) and the Core Central Region (CCR) in Singapore.
Rest of Central Region (RCR):
The RCR refers to areas that are adjacent to the Core Central Region but slightly farther from the city center. The RCR offers a mix of prime and suburban properties, providing a balance between accessibility and affordability. This region is known for its diverse range of property types, including condominiums, landed houses, and HDB flats.
| District | Location |
| 1 (Part) | Marina South |
| 2 (Part) | Chinatown |
| 3 | Queenstown, Tiong Bahru, Alexandra |
| 4 (Part) | Keppel, Harbourfront, Telok Blangah |
| 5 (Part) | Buona Vista, Pasir Panjang, Dover |
| 6 (Part) | Fort Canning |
| 7 (Part) | Rocher |
| 8 | Little India, Farrer Park |
| 12 | Balestier, Whampoa, Toa Payoh, Boon Keng, Bendemeer, Kampong Bugis |
| 13 (Part) | Potong Pasir, Bidadari, MacPherson, Upper Aljunied |
| 14 (Part) | Geylang, Dakota, Paya Lebar Central, Eunos, Ubi, Aljunied |
| 15 (Part) | Tanjong Rhu, Amber, Meyer, Katong, Dunman, Joo Chiat, Marina Parade |
| 20 (Part) | Bishan, Thomson |
Core Central Region (CCR):
The CCR, on the other hand, represents the prime and most coveted area of Singapore. It includes prestigious districts like Orchard Road, Marina Bay, Tanjong Pagar and Sentosa. Properties in the CCR such as Perfect Ten, are synonymous with luxury, exclusivity, and high-end living. This region boasts iconic landmarks, upscale condominiums, and lavish landed properties.
| District | Location |
| 1 (Part) | Boat Quay, Raffles Place, Marina Downtown, Suntec City |
| 2 (Part) | Shenton Way, Tanjong Pagar |
| 4 (Part) | Sentosa |
| 6 (Part) | City Hall |
| 7 (Part) | Bugis |
| 9 | Orchard, Somerset, River Valley |
| 10 | Tanglin, Holland, Bukit Timah |
| 11 | Novena, Watten, Newton, Dunearn |
Price Analysis
One of the key differences between the RCR and CCR is the pricing. In general, properties in the CCR tend to have higher price tags compared to the RCR. The prime locations and prestigious addresses in the CCR command a premium. It’s not uncommon to find luxury condominiums and high-end developments in this region. On the other hand, the RCR offers a more diverse price range, catering to a wider group of buyers and investors. This affordability factor can be an advantage for those looking for more accessible investment opportunities.
RCR Property Prices:
The RCR offers a wide range of property prices, making it more accessible to a diverse group of buyers and investors. The average price per square foot (PSF) for condominiums in the RCR can range from SGD 1,500 to SGD 2,800, depending on factors such as location, age of the development, and amenities offered. Landed properties in the RCR tend to have higher price points, with prices varying based on factors like land size, condition, and proximity to amenities.
CCR Property Prices:
In contrast, the CCR is known for its high-end and prestigious properties, resulting in higher price tags. The average PSF for luxury condominiums in the CCR can range from SGD 2,500 to SGD 4,500 or even higher, depending on factors such as location, views, and exclusivity. Landed properties in the CCR are typically priced at a premium, with prices varying significantly based on factors like land size, proximity to amenities, and historical value.
Several factors contribute to the price differences between the RCR and CCR. Location plays a significant role, as the CCR consists of prime districts with high demand and limited land availability. The proximity to amenities, prestigious addresses, and iconic landmarks also add to the allure and higher price points in the CCR. Additionally, luxury developments in the CCR often come with top-notch facilities, premium finishes, and exclusive services, which contribute to their higher prices.
Rental Yield Potential
Rental yield is a crucial consideration for property investors as it determines the income generated from an investment property. Let’s explore the rental yield potential in the Rest of Central Region (RCR) and the Core Central Region (CCR).
RCR Rental Yield
The RCR tends to offer favorable rental yield potential compared to the CCR. With a diverse range of property types including condominiums, landed houses, and HDB flats, the RCR caters to a broader tenant pool. The rental demand in the RCR is driven by factors such as proximity to employment hubs, educational institutions, and lifestyle amenities. Rental yields for condominiums in the RCR typically range from 3% to 5%, depending on factors such as location, property condition, and rental market conditions.
CCR Rental Yield
Due to the higher property prices and limited supply of rental properties, rental yields in the CCR are generally lower compared to the RCR. Luxury condominiums in the CCR can offer rental yields of around 2% to 3%. However, it’s important to note that rental yields in the CCR might be offset by potential capital appreciation and the appeal of owning a prestigious property in a prime location.
Capital Appreciation
Capital appreciation is a crucial aspect of property investment as it determines the potential increase in property value over time.
Both the RCR and CCR have shown a strong track record of capital appreciation over the years, albeit with some variations.
CCR
The Core Central Region (CCR) has historically been the prime real estate market in Singapore. The limited land supply and high demand for exclusive properties in these areas have contributed to consistent and significant capital appreciation. The CCR’s iconic landmarks, luxury developments, and proximity to renowned amenities have made it highly sought-after by both local and exclusively appealed to foreigners. As a result, property values in the CCR have experienced steady and robust growth, making it an attractive investment option for those seeking long-term capital appreciation.
RCR
While historically considered as more suburban, the RCR has undergone substantial transformation and urban renewal in recent years. These improvements, combined with its proximity to the city center and affordability compared to the CCR, have contributed to significant capital appreciation in the RCR. As urban planning and infrastructure developments have expanded into the RCR, property values have seen notable upward trends. The rejuvenation of older estates, development of new residential and commercial projects, and upgrading of transportation networks have positively impacted capital appreciation in this region.
Factors Influencing Capital Appreciation:
1. Infrastructure Developments:
Infrastructure developments play a crucial role in driving capital appreciation. The presence of well-planned transportation networks, connectivity to major highways, and accessibility to amenities can enhance the attractiveness of a region and positively impact property values. For example, the completion of new MRT lines or the development of transport hubs can significantly influence the desirability and value appreciation in both the RCR and CCR.
2. Urban Planning:
The government’s urban planning initiatives have a direct impact on property values and capital appreciation. Urban renewal projects, urban regeneration initiatives, and the creation of vibrant lifestyle hubs can contribute to increasing property values. For instance, the development of mixed-use areas with a blend of residential, commercial, and recreational spaces in District 2 can enhance the attractiveness and long-term value appreciation of this district.
3. Market Trends:
Market trends, including supply and demand dynamics, investor sentiment, and economic conditions, can significantly influence capital appreciation. Factors such as population growth, job opportunities, and market confidence play a role in determining property values in both the RCR and CCR. Monitoring market trends and understanding the demand for properties in each region is crucial for assessing the potential for capital appreciation.
4. Government Policies:
Government policies, such as property cooling measures, housing regulations, and urban planning guidelines, can influence property values and capital appreciation. Changes in policies, such as zoning regulations or incentives for certain developments, can have a direct impact on property prices in specific regions. Staying informed about government policies and potential alterations can provide insights into the potential future direction of capital appreciation.
5. Potential Future Capital Appreciation:
The potential for future capital appreciation remains promising in both the RCR and CCR due to ongoing and planned developments. The government’s focus on decentralization and the development of regional centers further enhances the growth potential of the RCR. Additionally, the CCR’s status as a prime location with limited land availability ensures its desirability and potential for sustained capital appreciation.
Growth and Development
Exploring the growth potential and future developments in the Rest of Central Region (RCR) and the Core Central Region (CCR) provides insights into the investment opportunities and potential for value appreciation in each region.
RCR Growth Potential
The RCR offers significant growth potential, driven by ongoing and planned developments. The government’s focus on decentralization and the development of regional centers has led to the rejuvenation of older estates and the creation of new vibrant communities. The RCR benefits from infrastructure improvements, such as the expansion of transport networks, including new MRT lines and major road upgrades. These enhancements improve connectivity, accessibility, and overall desirability of the region, attracting both residents and businesses.
Upcoming Projects in RCR
- Kampong Bugis: This upcoming mixed-use development in Kallang is set to transform the waterfront area into a vibrant precinct with residential, commercial, and recreational spaces. It aims to create a sustainable and inclusive community with ample green spaces, cultural amenities, and waterfront activities.
- Bidadari Estate: The Bidadari Estate, located near the city center, is undergoing a significant transformation into a well-planned residential town. It will feature new public housing, private condominiums, parks, and amenities, offering residents a high-quality living environment with close proximity to the city.
Transportation Improvements
Efficient transportation infrastructure is crucial for the growth and development of any region. In the RCR, several transportation improvements are planned or underway, further enhancing the accessibility and connectivity of the area. Notable projects include:
- Thomson-East Coast Line (TEL): The TEL, currently under construction, will connect the eastern and northern parts of Singapore, passing through key areas in the RCR. It will provide residents with direct access to the city center, improving commuting convenience and boosting property values along its route.
- North-South Expressway (NSE): The NSE, set to be completed in phases, will alleviate traffic congestion and improve connectivity between the north and south of Singapore. It will enhance accessibility to the RCR, benefiting both residents and businesses.
Urban Regeneration Initiatives
Urban regeneration initiatives aim to revitalize older estates and enhance the overall living environment. In the RCR, several urban regeneration projects are in progress, which will contribute to the growth and development of the region. Some notable initiatives include:
- Paya Lebar Regional Center: The Paya Lebar Regional Center is a key commercial hub in the RCR, undergoing significant transformation. It offers a mix of office spaces, retail outlets, and recreational amenities. The continued development of this center will attract businesses, create job opportunities, and drive economic growth in the RCR.
- Holland Village: Holland Village is known for its vibrant dining, shopping, and entertainment scene. The ongoing Holland Village Extension project aims to enhance the overall experience by providing additional commercial spaces, public amenities, and improved pedestrian connectivity, further solidifying its position as a popular lifestyle destination in the RCR.
CCR Growth Potential:
The Core Central Region (CCR) is already a prime location in Singapore, known for its prestigious districts and luxurious properties. However, growth and development continue to occur, further enhancing its appeal and potential for value appreciation.
Upcoming Projects in CCR:
- Greater Southern Waterfront: One of the most significant upcoming developments in Singapore, the Greater Southern Waterfront, will transform the existing port area into a vibrant mixed-use district. It will feature residential, commercial, and recreational spaces, including parks, promenades, and cultural attractions. The development is expected to significantly enhance the value and desirability of properties in the CCR.
- Orchard Road rejuvenation: Orchard Road, the retail and entertainment hub of Singapore, is undergoing rejuvenation efforts to maintain its status as a premier shopping destination. The rejuvenation plans include enhancing pedestrian connectivity, improving public spaces, and introducing new lifestyle concepts, further elevating the allure of the CCR.
Risk and Affordability
Assessing the risk level and affordability factors associated with investing in the Rest of Central Region (RCR) and the Core Central Region (CCR) is crucial for potential property buyers. Let’s delve into the potential risks, entry costs, and financing considerations for each region.|
Entry Costs:
- Lower Price Points in RCR: The RCR typically offers more affordable property options compared to the CCR, making it a more accessible investment option for a wider range of buyers. The lower entry costs can be advantageous for first-time investors or those with a more limited budget.
- Stamp Duty: Buyers are subject to Buyer’s Stamp Duty (BSD) and Additional Buyer’s Stamp Duty (ABSD) if any, which is calculated based on the purchase price of the property. The BSD rates range from 3% to 6%, depending on the property value. Buyers should consider this additional cost when budgeting for their investment.
Making the Right Investment Decision
Making an informed investment decision in the real estate market requires careful consideration of various factors, including personal goals, risk tolerance, and budget. Here are some tips and considerations to help investors make the right investment decision in the Rest of Central Region (RCR) and the Core Central Region (CCR).
- Define Investment Goals: Clarify your investment objectives and determine whether you’re seeking long-term capital appreciation, rental income, or a combination of both. This will help guide your decision-making process and align your investment strategy with your goals.
- Assess Risk Tolerance: Understand your risk tolerance level and how comfortable you are with potential market fluctuations and uncertainties. Consider factors such as your investment horizon, financial stability, and ability to withstand short-term market volatility.
- Conduct Thorough Research: Gather comprehensive data on property values, historical price appreciation, and market forecasts for both the RCR and CCR. Analyze factors influencing property prices, such as government policies, economic indicators, and market demand. This research will provide a solid foundation for your investment decision.
- Seek Expert Advice: Consult with real estate professionals who have extensive knowledge and experience in the Singapore property market. Their insights and expertise can provide valuable guidance and help you navigate through the complexities of property investment.
- Evaluate Affordability: Consider your budget and financing options when assessing investment opportunities. Calculate your affordability, taking into account factors such as down payment, loan eligibility, interest rates, and potential rental income. It’s essential to ensure that your investment aligns with your financial capabilities.
- Visit and Explore the Areas: Take the time to visit both the RCR and CCR to get a first-hand experience of the lifestyle, amenities, and atmosphere of each region. Exploring the neighborhoods, talking to locals, and experiencing the surroundings will provide a better understanding of the potential investment opportunities.
- Consider Diversification: Diversifying your investment portfolio is crucial for managing risk. Consider allocating investments to both the RCR and CCR to diversify across different regions and property types. This strategy can help mitigate potential risks associated with a single investment.
Conclusion:
In conclusion, investing in Singapore’s property market, whether in the Rest of Central Region (RCR) or the Core Central Region (CCR), requires careful evaluation and consideration of various factors. Understanding your investment goals, risk tolerance, and budget is crucial in making the right investment decision.
Throughout this blog post, we explored the price and market performance, growth and development, lifestyle and amenities, as well as the risk and affordability factors associated with investing in both the RCR and CCR. We discussed the importance of conducting thorough research, seeking expert advice, and evaluating personal investment objectives.
Ultimately, the decision to invest in the RCR or CCR depends on your individual circumstances and investment goals. It is crucial to carefully weigh the pros and cons of each region, considering factors such as market trends, potential risks, entry costs, and financing considerations.
Remember, real estate investment is a long-term commitment, and it is advisable to approach it with a well-informed and strategic mindset. Seek professional advice, stay updated on market trends, and conduct thorough due diligence before making any investment decisions. By doing so, you can maximize your chances of making a successful and rewarding investment in Singapore’s property market.
