5 Drawbacks of Upmarket Property in Singapore

Ryan Ong



Upmarket property is a high-risk, high-stakes game. Think of it as playing as a very special kind of 4D. One where, if you lose, the ticket seller leaps over the counter, bashes you in the head with a tire iron, and takes your wallet. So tempting as it seems, think before investing in upmarket properties. It’s not about how stable the market is; it’s about how stable your cash flow is. In this article, I look at the potential hazards that amateur investors face:


1. Upmarket Properties Are Only Luxuries To Tenants

No one needs an upmarket condo to survive. Our ancestors coped with nothing but a cave, a fire, and a spiffy looking loincloth. And when they’re down to their last cent, your tenants might decide they can as well.

Remember the Lehman Brothers debacle? The stock market was in worse shape than Schwarzenegger after his acting career. All the (formerly) rich tenants took one look at their bank books, and decided: “This penthouse suite isn’t all that hot. And a running leap off that balcony is looking dangerously attractive.”


Man looking out condo balcony
“Time to lower the rent again. I’ll settle for an iced Horlicks every OTHER Tuesday.”


Upmarket properties are luxuries (read: optional and overpriced). When times are bad, these properties are the first to lose their tenants. Compare that with mid-range properties, which have no vacancy problems even in the worst market crashes. A unit in district 17 or 18 isn’t as ritzy as something in Orchard, but reliable occupancy is nothing to scoff at.


2. High Loan Repayments Mean Less Holding Power

Holding power is how long you can afford to wait, when trying to offload your property. For most of us, loss of income is as easy as Starbucks screwing up the boss’s Mocha on the wrong day. And without income, what’s going to pay the home loan?

Unless you have a huge stash of money (or a working knowledge of vaults and a casino pass),  you won’t be able to hold a bungalow or high-end condo for long. Buyers can sense when you’re desperate; and when you sell property fast, it’s almost always at a loss. So unless your savings and cash-flow are rock solid, consider buying mass-market property instead.


Man holding up a cheque
“It’s half what your house is worth. Now strip to your underwear and dance for it.”


3. Sensitivity to Market Conditions

The high end segment might be the only thing more sensitive than your little sister was. Think of it as the tip of a skyscraper: In the event of tremors or strong wind, the top floors are the first to shake.

Upmarket property has a very high quantum. In times of economic uncertainty, mass market and mid-level property are mostly unaffected. People still need a roof over their heads. But upmarket property becomes out of the question; even if the buyers can afford it, a cautious outlook creates psychological barriers. When you’re getting stomach ulcers over job security, you’re not likely to fork out for an expensive private condo. Not even when you have the money.

Think about that from the seller’s perspective: If you own upmarket property in uncertain times, you’ll have problems selling. Unless you drop the price, and sell at a loss.


Glasses resting on stock market page
“I’m a marginal trader, so I work from home. When I happen to have one, that is.”


4. Higher Maintenance Costs

If you’re buying upmarket property, be prepared to fork out more for maintenance. It’s not just about land space; high end condos compete in terms of facilities. The cost of a pool, gym, and private clubhouses all stack up.

Bungalows or other large properties are even worse. Have you had someone polish your floors or clean out the grout between your tiles before? In a bungalow, don’t be surprised when the cost hits $2000 or more. And unless you want to furnish your upmarket property with made-in-China plastic chairs, your interior designer can start maxing out her cards.

Before buying, see if you’ll need to follow up the home loan with a renovation loan. Can you really afford both?


Maintenance man at Raffles Hotel
“I don’t think you realize how much work this place is. That extra pay is for your psychiatrist; the last cleaner needed it.”


5. Illiquid Asset

This is somewhat related to point 2. Upmarket property is not something you can sell fast, even if you rush and sell at a loss.

Due to the high quantum, most buyers need to secure financing. Remember how long it took you to shop for a loan? Now add the time your buyers need to shop around, bargain, and mull things over. Yes, it’s true this also happens with mass-market properties. But the simple fact is, the lower the price, the faster the buyers can raise the cash.

When your sole asset is a high end property, you’re facing potential opportunity costs. Say you spot a great investment opportunity, but don’t have cash on hand. What are you going to do? Tell everyone to wait until your property transaction is done?


“I tell you what. We’ll start from $1000, and price goes up a dollar a minute.”


So When IS a Good Time To Buy Upmarket?

When you’ve got an emergency surplus of six months income and sufficient insurance. Likewise, you should be earning enough that the property won’t cost more than 40% of your income.

And before buying your property, source for an affordable loan package. Visit sites like, and don’t just source for the lowest interest; because quantums are high, you may want to focus on getting the best LTV (loan to value ratio) instead.

Image Credits:
ssedro (feature), ssedro, skryche, Iman Mossadmiggslives, emilio labrador, ssedro(thumbnail)

Do you invest in upmarket property? Comment and tell us why!

Keep updated with all the news!


Ryan Ong

I was a freelance writer for over a decade, and covered topics from music to super-contagious foot diseases. I took this job because I believe financial news should be accessible and fun to read. Also, because the assignments don't involve shouting teenagers and debilitating plagues.