“It is not when you buy but when you sell that makes the gap to your profit”.
Hence I consistently advise my investors to be certain they have gone through their financial plans thoroughly as they will be entering into a 4-year commitment – after for the 4-year Seller’s Stamp Duty (SSD) that they will need 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 advantage by entering the property market and generating a second income from rental yields rather than putting their cash staying with you. Based on the current market, I would advise these people keep a lookout any kind of good investment property where prices have dropped an estimated 10% rather than putting it in a fixed deposit which pays three.5% and does not hedge against inflation which currently stands at simple.7%.
In this aspect, my investors and I are on the same page – we prefer to reap the benefits of the current low price and put our money in property assets to produce a positive cash flow via rental income. I myself have personally seen some properties generating positive monthly cash flow of up to $1500 after off-setting mortgage costs. This equates a good 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 could see that the effect of the cooling measures have lead to a slower rise in prices as in comparison to 2010.
Currently, we cane easily see that although property prices are holding up, sales are starting to stagnate. I am going to attribute this for the following 2 reasons:
1) Many owners’ unwillingness to sell at lower prices and buyers’ unwillingness to commit with a higher price.
2) Existing demand for properties exceeding supply due to owners being in no hurry to sell, consequently resulting in a improve prices.
I would advise investors to view their Singapore property assets as long-term investments. Will need to not be excessively alarmed by a slowdown in the property market as their assets will consistently benefit in the longer term and trend of value as a result of following:
a) Good governance in Singapore
b) Land scarcity in jade scape singapore, and,
c) Inflation which will place and upward pressure on prices
For buyers who would like invest in other types of properties in addition to the residential segment (such as New Launches & Resales), they likewise consider buying shophouses which likewise assist generate passive income; that are 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 importance of having ‘holding power’. You should never be forced to sell your stuff (and create a loss) even during a downturn. Always remember that the property market moves in a cyclical pattern and you will need to sell only during an uptrend.