Property Investment In Singapore – Musings From A Non Guru

property investment in singapore

Warning: I am not a property Guru, I just get amused by how people do so-called property investment in Singapore. 

The recent events (Propnex IPO, MAS warning about euphoria in the property market and the announcement of further property cooling measures) can’t be better summarized by Property Soul.

I was particularly intrigued when buyers flocked to show-flats before the new rules kicked in. If anyone makes a buying decision based on a 5% discount, or just to avoid the additional ABSD, something is very wrong.

Buying a property is a HUGE decision. The monthly median income is probably about $5,000 and say a typical private property is $1Mil (way on the low side), it is a major decision for many which warrants thorough homework to be done. Unless you are dirt rich, the home loan is going to stretch over 25 or 30 years.

Let’s explore why someone might be buying a private property:

  • Upgrade from existing property (perhaps from a smaller unit to a larger unit, or from a HDB)
  • Purely for investment
  • Buying for children as gifts
  • Too much cash?
  • Collector of properties

Whatever the reason, it is a major decision and you can’t just go to a show-flat and be wowed by the designer renovations and furniture you see. I would suggest you do your financial investigation before even going to the show-flat to avoid emotions taking over much of the decision making.

Is Your Property An Asset

An asset is often defined as something which provides you regular income. So, is property an asset?

Not when you are staying in it! In fact, it becomes a liability as you have to deal with wear and tear. As you upgrade from a smaller unit to a larger unit, you bear more liabilities.

I know of many people with more than the means who choose to stay put in their HDB and invest with the money and savings they have.

How about the potential capital appreciation? Definitely, but always note you must buy your properties at the right price. Long term horizon is also important and do not over-leverage.

When buying properties for investment and you intend to rent out the properties, do you buy a brand new unit or from the resale market?

Other than price, what other factors should you consider when making a property purchase decision? Location? Amenities in the neighborhood?

When renting out the properties, what considerations are important?

How about investing in overseas’ properties?

There are lots of questions to be answered.

I am not a guru and I know I am not gifted in property investment, having bought and sold a few, both in Singapore and overseas. The best decision is probably the current house I am staying with my family.

What I know is do your homework, and do lots of it. You can check out this book by Property Soul as the initial groundwork.

Property investment is similar to stock investment and as stock value investors, we want good value for our investment.

Good luck.

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