“It is not in case you 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 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 second income from rental yields rather than putting their cash staying with you. Based on the current market, I would advise these people keep a lookout any kind of 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 use the same page – we prefer to take advantage of the current low interest rate and put our money 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 of up to $1500 after off-setting mortgage costs. This equates to an annual passive income up to $18 000 per annum which easily beats returns from fixed deposits furthermore outperforms dividend returns from stocks.
Even though prices of private properties have continued to despite the economic uncertainty, we notice that the effect of the cooling measures have cause a slower rise in prices as when compared with 2010.
Currently, we observe that although property prices are holding up, sales are starting to stagnate. Let me attribute this on the following 2 reasons:
1) Many owners’ unwillingness to sell at affordable prices and buyers’ unwillingness to commit together with 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. Really should not be excessively alarmed by a slowdown associated with property market as their assets will consistently benefit in the long run and increase in 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 buyers who would like invest some other types of properties aside from the residential segment (such as New Launches & Resales), they furthermore consider purchasing shophouses which likewise will help generate passive income; and thus not prone to the recent government cooling measures prefer the 16% SSD and 40% downpayment required on homes.
I cannot help but stress the need for having ‘holding power’. You should never be required to sell your property (and jade scape develop a loss) even during a downturn. Remember that the property market moves in a cyclical pattern and you will need to sell only during an uptrend.