Committing to Singapore Properties

“It is not an individual have buy but when you sell that makes principal to your profit”.

Hence I consistently advise my investors to guantee that they have gone through their financial plans thoroughly as they will be entering into a 4-year commitment – after taking into consideration the 4-year Seller’s Stamp Duty (SSD) that they will have to pay if they sell their property before four years.

Once they have determined the amount of finances they are willing to outlay, they will set themselves at a gift by entering the property market and generating second income from rental yields compared to putting their cash in the bank. Based on the current market, I would advise that they keep a lookout virtually any good investment property where prices have dropped upwards of 10% rather than putting it in a fixed deposit which pays 4.5% and does not hedge against inflation which currently stands at simple.7%.

In this aspect, my investors and I use the same page – we prefer to probably the current low interest rate and put our take advantage property assets to generate a positive cash flow via rental income. I myself have personally seen some properties generating positive monthly cash flow of of up to $1500 after off-setting mortgage costs. This equates with regard to an annual passive income as high as $18 000 per annum which easily beats returns from fixed deposits furthermore outperforms dividend returns from stocks.

Even though prices of private properties have continued to go up despite the economic uncertainty, we notice that the effect of the cooling measures have caused a slower rise in prices as the actual 2010.

Currently, we observe that although property prices are holding up, sales start to stagnate. I’m going to attribute this to the following 2 reasons:

1) Many owners’ unwillingness to sell at more affordable prices and buyers’ unwillingness to commit into a higher the price tag.

2) Existing demand for properties exceeding supply due to owners being in no hurry to sell, consequently leading to a rise in prices.

I would advise investors to view their jade scape singapore property assets as long-term investments. They should not be excessively alarmed by a slowdown in the property market as their assets will consistently benefit in over time and boost in value as a result of following:

a) Good governance in Singapore

b) Land scarcity in Singapore, and,

c) Inflation which will place and upward pressure on prices

For clients who would like invest various other types of properties in addition to the residential segment (such as New Launches & Resales), they may also consider investing in shophouses which likewise might help generate passive income; and are not depending upon the recent government cooling measures similar to the 16% SSD and 40% downpayment required on residential properties.

I cannot help but stress the need for having ‘holding power’. Never be expected to sell your property (and make a loss) even during a downturn. Be aware that the property market moves in a cyclical pattern and really sell only during an uptrend.

This entry was posted in Uncategorized. Bookmark the permalink.