“It is not when you buy but when you sell that makes learn to your profit”.
Hence I consistently advise my investors to be sure 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 must pay if they sell their property before 4 years.
Once they have determined the amount of finances they are willing to outlay, they will set themselves at a advantage by entering the property market and generating second income from rental yields compared to putting their cash secured. Based on the current market, I would advise that they keep a lookout regarding any good investment property where prices have dropped upwards of 10% rather than putting it in a fixed deposit which pays .5% and does not hedge against inflation which currently stands at ideas.7%.
In this aspect, my investors and I are on the same page – we prefer to make the most of the current low fee and put our profit in property assets to generate a positive cash flow via rental income. I myself have personally seen some properties generating positive monthly cash flow of as high as $1500 after off-setting mortgage costs. This equates to an annual passive income of up to $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 elevate despite the economic uncertainty, jade scape we could see that the effect of the cooling measures have lead to a slower rise in prices as compared to 2010.
Currently, we cane easily see that although property prices are holding up, sales are beginning to stagnate. I’m going to attribute this on the following 2 reasons:
1) Many owners’ unwillingness to sell at less expensive prices and buyers’ unwillingness to commit to a higher charges.
2) Existing demand unaltered data exceeding supply due to owners finding yourself in no hurry to sell, consequently leading to a enhance prices.
I would advise investors to view their Singapore property assets as long-term investments. They ought to not be excessively alarmed by a slowdown within property market as their assets will consistently benefit in the long run and increasing amount of value due to the following:
a) Good governance in Singapore
b) Land scarcity in Singapore, and,
c) Inflation which will set and upward pressure on prices
For buyers who would like invest some other types of properties apart from the residential segment (such as New Launches & Resales), they may also consider investing in shophouses which likewise can help generate passive income; and thus not prone to the recent government cooling measures similar to the 16% SSD and 40% downpayment required on residential properties.
I cannot help but stress the value of having ‘holding power’. Never be forced to sell your property (and create a loss) even during a downturn. Remember that the property market moves in a cyclical pattern and really sell only during an uptrend.