“It is not calling it buy but when you sell that makes learn 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 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 a second income from rental yields instead of putting their cash in the bank. Based on the current market, I would advise that they keep a lookout for good investment property where prices have dropped a great deal more 10% rather than putting it in a fixed deposit which pays 4.5% 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 reap the benefits 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 a whole lot $1500 after off-setting mortgage costs. This equates to an annual passive income as high as $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 increase despite the economic uncertainty, we can see that the effect of the cooling measures have result in a slower rise in prices as in order to 2010.
Currently, we observe that although property prices are holding up, sales are starting to stagnate. Let me attribute this for the following 2 reasons:
1) Many owners’ unwillingness to sell at less expensive costs and buyers’ unwillingness to commit to a higher the price tag.
2) Existing demand for properties 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. They ought to not be excessively alarmed by a slowdown your market property market as their assets will consistently benefit in the longer term and increasing amount of 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 clients who would like invest in other types of properties apart from the residential segment (such as New Launches & Resales), jade scape they may also consider purchasing shophouses which likewise can help generate passive income; that 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 significance of having ‘holding power’. Never be made to sell house (and make a loss) even during a downturn. Always remember that the property market moves in a cyclical pattern and really sell only during an uptrend.