“It is not when you buy but when you sell that makes principal 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 with the 4-year Seller’s Stamp Duty (SSD) that they must 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 passive income from rental yields compared to putting their cash secured. Based on the current market, I would advise they will keep a lookout regarding any good investment property where prices have dropped an estimated 10% rather than putting it in a fixed deposit which pays 0.5% and does not hedge against inflation which currently stands at some.7%.
In this aspect, my investors and I take any presctiption the same page – we prefer to take advantage of the current low pace and put our take advantage property assets to produce 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 to an annual passive income up to $18 000 per annum which easily beats returns from fixed deposits and also outperforms dividend returns from stocks.
Even though prices of private properties have continued to increase despite the economic uncertainty, we can see that the effect of the cooling measures have caused 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 into the following 2 reasons:
1) Many owners’ unwillingness to sell at affordable prices and buyers’ unwillingness to commit to some higher promoting.
2) Existing demand jade scape unaltered data exceeding supply due to owners being in no hurry to sell, consequently in order to 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 each morning property market as their assets will consistently benefit in the long term and increase in value because of 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 various other types of properties aside from the residential segment (such as New Launches & Resales), they furthermore consider purchasing shophouses which likewise will help generate passive income; and therefore not prone to the recent government cooling measures such as the 16% SSD and 40% downpayment required on homes.
I cannot help but stress the value of having ‘holding power’. You shouldn’t ever be expected to sell your stuff (and create a loss) even during a downturn. Always remember that the property market moves in a cyclical pattern and it’s sell only during an uptrend.