“It is not an individual have 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 taking into consideration the 4-year Seller’s Stamp Duty (SSD) that they will need 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 rather than putting their cash on your bottom line. 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 two.5% and does not hedge against inflation which currently stands at simple.7%.
In this aspect, my investors and I use the same page – we prefer to reap the benefits of the current low rate 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 as high as $1500 after off-setting mortgage costs. This equates to an annual passive income as much 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 elevate despite the economic uncertainty, we could see that the effect of the cooling measures have caused a slower rise in prices as compared to 2010.
Currently, 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 with a higher promoting.
2) Existing demand unaltered data exceeding supply due to owners finding yourself in no hurry to sell, consequently leading 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 each morning property market as their assets will consistently benefit in over time and increasing amount of 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 in addition to the residential segment (such as New Launches & Resales), they furthermore consider throughout shophouses which likewise can help generate passive income; and therefore not depending upon the recent government cooling measures such as the 16% SSD and jade scape 40% downpayment required on residential properties.
I cannot help but stress the need for having ‘holding power’. You shouldn’t be instructed to sell your house (and make a loss) even during a downturn. Be aware that the property market moves in a cyclical pattern and you will need to sell only during an uptrend.