“It is not when you buy but when you sell that makes the gap to your profit”.
Hence I consistently advise my investors to ensure that they have gone through their financial plans thoroughly as they will be entering into a 4-year commitment – after with the 4-year Seller’s Stamp Duty (SSD) that they would have to 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 boon by entering the property market and generating residual income from rental yields instead of putting their cash in the bank. Based on the current market, jade scape I would advise that they keep a lookout for good investment property where prices have dropped an estimated 10% rather than putting it in a fixed deposit which pays two.5% and does not hedge against inflation which currently stands at ideas.7%.
In this aspect, my investors and I take presctiption the same page – we prefer to make the most of the current low pace 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 a whole lot $1500 after off-setting mortgage costs. This equates for annual passive income of up to $18 000 per annum which easily beats returns from fixed deposits additionally the outperforms dividend returns from stocks.
Even though prices of private properties have continued to go up despite the economic uncertainty, we can easily see that the effect of the cooling measures have caused a slower rise in prices as in comparison to 2010.
Currently, we can see that although property prices are holding up, sales are beginning to stagnate. I will attribute this for the following 2 reasons:
1) Many owners’ unwillingness to sell at lower prices and buyers’ unwillingness to commit with a higher the price tag.
2) Existing demand for properties exceeding supply due to owners being in no hurry to sell, consequently resulting in a rise in prices.
I would advise investors to view their Singapore property assets as long-term investments. Really should not be excessively alarmed by a slowdown your market property market as their assets will consistently benefit in time and increase in value as a result of following:
a) Good governance in Singapore
b) Land scarcity in Singapore, and,
c) Inflation which will set and upward pressure on prices
For clients who would like invest consist of types of properties in addition to the residential segment (such as New Launches & Resales), they may also consider inside shophouses which likewise can help generate passive income; and are not controlled by the recent government cooling measures like 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 instructed to sell your property (and make a loss) even during a downturn. Remember that the property market moves in a cyclical pattern and it’s sell only during an uptrend.