“It is not when you buy but when you sell that makes principal to your profit”.
Hence I consistently advise my investors to take care 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 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, jade scape they will set themselves at a boon by entering the property market and generating a second income from rental yields compared to putting their cash staying with you. Based on the current market, I would advise they keep a lookout for any good investment property where prices have dropped very 10% rather than putting it in a fixed deposit which pays 4.5% and does not hedge against inflation which currently stands at some.7%.
In this aspect, my investors and I are on the same page – we prefer to reap the benefits 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 of up to $1500 after off-setting mortgage costs. This equates a good annual passive income 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 despite the economic uncertainty, we notice that the effect of the cooling measures have result in a slower rise in prices as the actual 2010.
Currently, we cane easily see that although property prices are holding up, sales are starting to stagnate. I will attribute this into the following 2 reasons:
1) Many owners’ unwillingness to sell at less expensive prices and buyers’ unwillingness to commit to some higher promoting.
2) Existing demand unaltered data exceeding supply due to owners finding yourself in no hurry to sell, consequently in order to 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 in the property market as their assets will consistently benefit in the long run and increased value due to the following:
a) Good governance in Singapore
b) Land scarcity in 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 might also consider throughout shophouses which likewise support generate passive income; that are not at the mercy of 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 shouldn’t be made to sell your stuff (and create a loss) even during a downturn. Be aware that the property market moves in a cyclical pattern and require to sell only during an uptrend.