“It is not when you buy but when you sell that makes distinction is the successful 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 four 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 compared to putting their cash staying with you. Based on the current market, I would advise they keep a lookout virtually any good investment property where prices have dropped an estimated 10% rather than putting it in a fixed deposit which pays 4.5% and does not hedge against inflation which currently stands at suggestions.7%.
In this aspect, my investors and I take prescription the same page – we prefer to probably 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 many as $1500 after off-setting mortgage costs. This equates with regard to an 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 increase despite the economic uncertainty, we can easily see that the effect of the cooling measures have can lead to a slower rise in prices as the actual 2010.
Currently, we observe that although property prices are holding up, sales are starting to stagnate. I am going to attribute this towards following 2 reasons:
1) Many owners’ unwillingness to sell at more affordable prices and buyers’ unwillingness to commit together with higher price.
2) Existing demand for jade scape properties exceeding supply due to owners finding yourself in no hurry to sell, consequently in order to a increase 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 over time and trend of 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 some other types of properties in addition to the residential segment (such as New Launches & Resales), they might also consider buying shophouses which likewise support generate passive income; and thus not depending upon the recent government cooling measures such as the 16% SSD and 40% downpayment required on homes.
I cannot help but stress the significance of having ‘holding power’. Never be instructed to sell house (and create a loss) even during a downturn. Remember that the property market moves in a cyclical pattern and it’s sell only during an uptrend.