As for the commercial property market, the residential property market is still considered to be the backbone of the commercial property market. By focusing on the residential market, this investor is in a better position to minimize the risks that come with operating in a market that is moving in the opposite direction. With a good combination of commercial property and residential property, a property investor can capitalize on the shifting trends in the residential and commercial property markets. Rental Market Goes in Opposite Directions For Condos and HDBs
The global real estate market continues to move away from the residential property market that has been firmly entrenched for the past few years. As with most trends, the residential property market is rebounding as the market becomes more stable, according to the most recent statistics released by the International Monetary Fund. While this trend continues, the Rental market is taking an opposite direction, a trend that has some property investors concerned.
To understand the difference between the residential property market and the commercial property market, it is helpful to first understand the distinction between condos and houses. Condos and townhouses are single-family homes that are built out of a smaller parcel of land. When a property is built out of multiple lots, it is known as a condo or townhouse. A house is a housing structure that is constructed out of many lots and therefore is known as a house.
Differences in residential and commercial markets
Unlike the residential property market, the commercial property market has seen a significant decline in home sales. This has resulted in a number of buyers who are looking to buy homes for investment purposes. The primary reason why the property market is heading in the opposite direction is because most sellers are not able to generate a sufficient income through their real estate venture. It is essential that these sellers are able to make an income by selling their homes. Due to a declining number of home sales, this is proving to be challenging for some property investors.
In terms of real estate investment, the first point to consider is whether the commercial property market is moving towards a decrease or an increase. If the commercial property market moves away from the rental and residential markets, it is often the case that both the commercial and residential markets will become more competitive. In order to capitalize on this market, it is imperative that a property investor focus on one industry at a time. If an investor focuses on both the commercial and residential property markets, there will be less competition.
Focusing on a particular market might be better
The number of commercial properties continues to decrease as it takes its opposite course from the residential property market. For a property investor, the key is to keep focused on one market at a time. By doing so, this investor can avoid entering into a transaction where a property is being sold for less than what the buyer actually paid for the property. This strategy is crucial in order to capitalize on this market trend.
The HDB market is another type of market that has experienced a decrease. In order to help property investors capitalize on this trend, it is important that they identify which property sectors will become a mainstay in the market. If the property investor knows that there will be demand for the HDB segment, it might be favorable.
There are still a number of market segments that continue to experience a decline in demand and therefore will likely decrease in price, but they have yet to materialize as much as the residential property market. As of early 2020, it appears that the biggest force pushing the residential property market in the direction of a decrease is from the HDB segment. When it comes to the commercial property market, the largest contributor is expected to be condos. The commercial property market remains strong because of the small number of properties that are currently under construction.