Updated: May 14
After I have shared my blog article “Why you should invest in Singapore Property”,
I feel great that there is quite a response to my article, thank you.
Of course, not all readers can agree to what I have shared.
"Regarding investment, why I should invest in property? It takes quite a bit of time for me to reap my profits, liquidation is not as fast as other investment instruments like shares, REITs, or even just put the money in my saving / fixed deposits account to earn interest."
Comments above have put up to me.
I know where you are coming from, and I agree that you can always do that, invest in other areas.
Property investment is one of the lower risks in all investment instruments, especially in Singapore, and will build your wealth much faster.
Let take a look at the below scenarios.
Property Investment Vs Bank Saving
Using the example of my client for in my previous article “Why you should invest in Singapore property”,
He bought a 2 bedroom unit during the launch day at the price of S$627,000 and sold the unit when T.O.P (temporary occupation permit) for S$760k making a profit of S$133K in less than 5 years.
The amount he invested in this property is as follow.
He took out only 25% of sale price + stamp duty (3% - 5400) from his pocket.
That come out to S$156,700 + 13,410 = S$170,110.
He made 78.23% from this property investment giving him annually 15.64% returns ROI.
Now let compare apple to apple, with the same amount, he deposits this amount S$170,110 into his saving accounts to earn interest for 5 years at an interest rates of 1% per annum.
5 years will bring him an interest gain of estimate S$8,505
Hey Peter, not saving accounts, why you cannot compare with a fixed deposit?
Let explore then.
S$170,110 place in Fixed deposit for 5 years at a rate of 1.5% per annum, interest gains after 5 years is S$12,758.
Invest in property, 5 years will bring you an increase in your wealth of S$133K with a low investment amount of S$170,110.
As for Saving / fixed deposit can only bring in an amount of S$8,505 / S$12,758.
The wealth brought in by property investment is much higher.
Property investment vs Shares
How about investing in Shares?
Good suggestion. Just make sure that you are investing and not gambling. Investing is talking of strategies planning, not just buying and sales.
Shares investment needs a lot of research, understanding the background of the company, the financial stability, the progress of the company and also the projection of the company development map. Furthermore, you need to monitor the fluctuation of the stocks price daily.
Investment in shares also have a higher risk compare to property investment. Prices change anytime, and the worse, a lot of information is not updated real times, by the time you received the announcement from the company, it will be late for you to respond and make a decision.
You can lose all your investment overnight if the company suddenly announce a suspension of trading, or delist from the trading board.
As for property investment in Singapore, you will be able to judge the trends of the property markets, real times information is online, market prices are predictable. Best of all, regardless of how bad the markets, your property prices will never be zero.
Why are foreigner buyers are still investing Real Estate in Singapore?
1. Singapore has a stable political platform.
2. Singapore currency is stable and strong
3. Singapore population growth
4. 4 major world-class sectors.
Stable Political Platform.
Singapore is a unique case of having a single-party government since independence in 1965. For the past 50+ years of nation-building, unlike other countries, you can see riots, demonstration along the way, but Singapore, although is a multi-racial country, you do not see all this happening.
This has to give credits to the Singapore Government who always put the nations and the thought of the Singapore Citizens in mind, creating a peaceful and harmony country.
With this kind of environment, your investment in Singapore will be safe.
Currency is strong and stable
Compare to other countries, Singapore currency is very stable. Singapore has a healthy and strong foreign reserve compare to a lot of countries.
Not only that Singapore foreign reserve is strong, but the national reserve is also healthy as well, the national reserve is to prepare for any crisis that will happen.
Covid-19 is a good example, The Singapore government reacts immediately by implementing the assisting packages to all Singapore citizens and companies without any hesitation, thanks to the reserve they had built over the years, this has reduced the damages to the minimum that can come along.
What are the advantages of having a strong and stable currency?
I have a Korean friend who bought a 3 bedroom unit in CityLights residences in the year 2012 at a foreign currency exchange rate of 1:924, Singapore dollar to Korean Won.
In the year 2015, he needs some urgent funds for his business in Korea, he sold the unit at the price he bought, you might wonder why he sells at this price.
He told me, “Peter, I never lose any money in this transaction, in facts, I made some profits out of it”
Let take a look at what happening.
For easy calculation, let assume the unit is bought at 1 million Singapore dollar.
Exchange rate in the year 2012 is at 1:924, he uses $924M Korean Won for this purchase.
Exchange rate in the year 2015 is at 1:805, selling at S$1M will give him $1,147M Korean won in return.
In the foreign currency exchange rate he makes $233M Korean Won, which give him a profit of 25.21%.
Singapore population growth
I had mentioned in my blog article “why you should invest in Singapore property”. In the white paper, the Singapore government is expecting the growth of the population to 6.9 Million in the year 2030.
Let take a more details look of how this will impact the prices of property in Singapore.
Population Growth must happen for Singapore survival, to prepared for the growth of the population, the Singapore government has started preparing the infrastructure in all areas to accommodate for the growth of the populations.
The above chart shows the Singapore population data in the year ended in 2019. We have 5.638 Million in total. To fulfilled the 6.9 million populations in the year 2030, the population's growth rate needs to accelerate once again.
Expecting a growth of estimate 1.3 million for the next 12 years, we are looking at an average growth of 108K annually. Looking at 1.51% increase in population each year.
The above charts show you an average of the population growth over the next 12 years from 2019 to reach the targets of 6.9 million in the year 2030.
An average increase of population in the range of 58,773 to 94,692 persons annually. Base on an average household size of 3.34 persons, house for new immigrants is expected to be in the range of 18,140 to 29,226.
So as you can see, the demands of property in Singapore is Strong, and this is only referring to the residential sectors.
4 major world-class commercial sectors.
Again, I have shared in my previous article, Singapore has the focus in developing 4 major sectors in the supporting and economic growth.
1. A world-class transit / logistic hub.
2. A world-class medical research centre
3. A regional financial centre / digital centre
4. Educational hubs
All these developments will give supports to the population's growth in Singapore and also create jobs opportunities for Singapore citizen and foreign talents to work in Singapore, giving strong demands in the housing needs.
Don’t forget the Students that come to study in Singapore, they also need a place to stay.
I hope this article I have shared, give you a more understanding of why Singapore Property is worth Investing.
If you’re at a loss about what you can do, you’re always welcome to get in touch with me, through our property wealth planning system, I believe I will be able to assist you to come up with a plan to build your wealth through property investment.
You are welcome to have a 30 minutes Property Wealth Planning consultation with me by booking a time schedule by clicking on the calendar below.
Please do share this article to someone keen to look into property investment in Singapore.
Peter Tan Choon Guan, The Real Estate Guy.
Senior Associate Group Director with OrangeTee & Tie.
Since 1995, he has been providing professional consulting services to clients in Singapore and beyond. From strategic planning to innovative solutions, his focus is always on building an efficient and results-driven relationship. He will work with you to create a customized plan of action for yourself or your organization.
Peter is an adventurous person, he is a basketball player since school times, represent schools and organisation in the National Tournament. He is also active in track and fields, participated in school events and national events and got a bronze medal for his Long Jump events and a silver medal in his 100M run.
Water sports in another area he is interested, obtained a few medals for his canoeing competition. He conquered Mount Kinabalu in East Malaysia, Mount Tahan and Mount Ophir in East Malaysia.
He is enlisted into National Services as Naval personnel, a Section IC in his department. Appointed to Acting Platoon Sergeant during his Reservist.
During school times, he is a class monitor and a school prefect during his primary school time. Become a youth leader in a later stage. With all the exposal created him a leader by nature, able to train and guide people.
Starting to run in own business in the year 1995 and ended his business in years 2013. This allows him to be able to communicate at all levels in society. Joining the Real Estate Industry in the year 1995 as a part-timer, after he ended his business in 2013, he focuses on Real Estate consultation, not only starts to invest in property himself, he also assisted more than 350 property investors to build their wealth in property investment.
With the hand on investment himself, he will be able to provide you with the real-time property insight and strategic planning for your property investment through Property Wealth Planning System.
WhatsApp Peter if you need any assistant. If you do like this article, please give me some comments and like.