“It is not calling it buy but when you sell that makes the difference 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 will want 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 great advantage by entering the property market and generating residual income from rental yields associated with putting their cash staying with you. Based on the current market, I would advise they will keep a lookout virtually any good investment property where prices have dropped upwards of 10% rather than putting it in a fixed deposit which pays 0.5% 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 price and put our profit 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 as high as $1500 after off-setting mortgage costs. This equates for annual passive income up to $18 000 per annum which easily beats returns from fixed deposits as well outperforms dividend returns from stocks.
Even though prices of private properties have continued to elevate despite the economic uncertainty, we can easily see that the effect of the cooling measures have result in a slower rise in prices as in comparison to 2010.
Currently, jade scape we observe that although property prices are holding up, sales are starting to stagnate. I am going to attribute this to the following 2 reasons:
1) Many owners’ unwillingness to sell at affordable prices and buyers’ unwillingness to commit into a higher price.
2) Existing demand for properties exceeding supply due to owners finding yourself in no hurry to sell, consequently resulting in a enhance 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 within property market as their assets will consistently benefit in the longer term and increased value because of 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 furthermore consider throughout shophouses which likewise might help generate passive income; and are not depending upon the recent government cooling measures such as the 16% SSD and 40% downpayment required on residential properties.
I cannot help but stress the importance of having ‘holding power’. You shouldn’t ever 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.