It was once very lucrative investing in real estate in Singapore. Huge profits were made by those that could afford to put their money into Singapore properties. But since the prices of properties shot up at an astronomical level, the value of investing in real estate today is not as high as it was before.
Today, some new properties launched by real estate developers in Singapore are still doing well. This is because the developers are pricing them to move. Take this for an example, there is this new development launch called The Florence Residences, where it’s drawing interest and demand from buyers as they are still keen to enter the market because of the reasonable entry price.
Entry price is very critical when it comes to real estate investment. In this article published on the Straits Times in 2018, average home prices in Sentosa Cove are down at an average of a whopping 30% since their 2011 peak. Several investors were forced to stomach the losses. If you were to purchase a property at one of the seller’s insane asking price at the point in time, you would be kicking yourself today.
In recent times, the value of property has started rising. You need to understand that there will always be up and down trends in the real estate market. But historically, in the long run, property prices are always in a rising trend here in Singapore due to our land scarcity and overwhelmingly high demand for real estate by locals and people all over the globe. This basically means that there really is no bad time to enter the market in an investor’s standpoint. What really matters is the price that you are buying into.
Some question you should also be asking yourself are:
– What is the current market trend now?
– What are other investors doing now?
– Should you actually follow these other investors?
– Do you have a proper entry and exit strategy?
These are indicators that will help you to make a better judgement when it comes to investing in Singapore real estate. The more you have a proper strategy, the smarter your investment moves will be, leading to better profits from your investment.
Another factor that many investors overlook, is the amount of inventory in the market today. Having a low to moderate number in today’s market could mean that there will be a much higher demand for such properties in the future, especially when you take into account Seller’s Stamp Duty, which gives you a good timeline to gauge when others could be selling in the future. Careful planning helps you to achieve higher profit deals. If you were to buy when the market has high inventory, you should expect your property to sell more slowly in the future, and possibly at a reduced price due to the competition in the market from all the other sellers.
What to look out for when letting go a property?
There are certain seasons in Singapore that pose a challenge when it comes to the sale of a property. The year-end season is where most families are taking a break, and might even be out on a vacation. This typically lasts till the end of the Lunar New Year, as most Chinese locals in Singapore that, form the majority of the population, typically do not like to get involved in real estate transactions during this period.
What are the advantages of investing in Singapore real estate?
If you plan carefully with your real estate investments, or just happen to be very lucky and own a good property, bought at the right price, you should see the value increase in the next 5-10 years. At the meantime, the asset is not a burden to you as you have the opportunity of renting out the property, collecting rental cheques every month either as passive income, or to offset your loan on the house.
I hope you have found these tips insightful, and I wish you the very best for your real estate investment journey in Singapore!