“It is not in case you 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 taking into consideration 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 boon by entering the property market and generating second income from rental yields rather than putting their cash staying with you. Based on the current market, I would advise they keep a lookout for good investment property where prices have dropped very 10% rather than putting it in a fixed deposit which pays 0.5% and does not hedge against inflation which currently stands at some.7%.
In this aspect, my investors and I take presctiption the same page – we prefer to probably the current low interest rate and put our profit in property assets to generate 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 with regard to an annual passive income up to $18 000 per annum which easily beats returns from fixed deposits and also 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 lead to a slower rise in prices as in comparison to 2010.
Currently, we are able to access that although property prices are holding up, sales start to stagnate. Let me attribute this on the following 2 reasons:
1) Many owners’ unwillingness to sell at less expensive costs and jade scape buyers’ unwillingness to commit to some higher charges.
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. Will need to not be excessively alarmed by a slowdown your market property market as their assets will consistently benefit in the long run and trend of value due to the following:
a) Good governance in Singapore
b) Land scarcity in Singapore, and,
c) Inflation which will set 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), they may also consider inside shophouses which likewise might help generate passive income; that are not depending upon the recent government cooling measures a lot 16% SSD and 40% downpayment required on homes.
I cannot help but stress the need for having ‘holding power’. You shouldn’t be instructed to sell household (and develop a loss) even during a downturn. Remember that the property market moves in a cyclical pattern and you should sell only during an uptrend.