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Committing to Singapore Properties

"It is not calling it buy but when you sell that makes the gap 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 taking into consideration the 4-year Seller's Stamp Duty (SSD) that they must 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 gift by entering the property market and generating residual income from rental yields regarding putting their cash secured. Based on the current market, I would advise that they keep a lookout for any good investment property where prices have dropped more than 10% rather than putting it in a fixed deposit which pays three.5% and does not hedge against inflation which currently stands at 5.7%.

In this aspect, jade scape my investors and I take prescription the same page - we prefer to take advantage of the current low interest rate and put our take advantage 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 a good annual passive income of 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 despite the economic uncertainty, we can easily see that the effect of the cooling measures have caused a slower rise in prices as in comparison to 2010.

Currently, we look at that although property prices are holding up, sales start 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 to some higher value tag.

2) Existing demand for properties exceeding supply due to owners being 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. Dealerships will have not be excessively alarmed by a slowdown each morning property market as their assets will consistently benefit in the longer term and trend 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 clients who would like invest some other types of properties aside from the residential segment (such as New Launches & Resales), they likewise consider inside shophouses which likewise support generate passive income; that are not subject to the recent government cooling measures like the 16% SSD and 40% downpayment required on homes.

I cannot help but stress the importance of having 'holding power'. You shouldn't be expected to sell your stuff (and create 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.