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.