You don’t have to live in Singapore to know that our little isle is known for its strong economic growth, job stability, superb educational system, conducive business environment and world-class healthcare. It’s an obvious choice when it comes to a location to invest in, so it’s no surprise that Singapore’s clean slate rep attracts an influx of foreign immigrants and investors.
Singapore’s overall real estate market has grown over the years. Singapore’s commercial real estate is expected to reach $140B this 2015, with a transaction volume of $43 billion in the last quarter of 2014.
Why You Should Invest In Real Estate
- Residential Use
Remember how you used to make a ‘Wish List’ on your Livejournal when you were a teen? As an adult, one of the items on your wishlist, even if it’s not written down, is probably your own home.
Between the security, stability and flexibility that owning your own home gives you, when it comes to wise financial decisions, based on the current rates, rental is still higher than mortgage. It makes more sense for most to invest in their own home.
For those who are looking to buy a residential property, prices fell 4% last year according to reports. Property analysts predict that you can expect a double digit decline in the price of residential real estate this year, especially the high end ones.
- Investment
Buying low, sell high – a motto that will benefit anyone, including real estate investors. A boom, a slump and a recovery will always happen in real estate property values. Currently, the price of residential real estate has been declining over the last few years. However, in the long term, property prices is mostly expected to appreciate. The value of Singapore’s property had increased significantly over the last 25 years.
To some, buying a property is also a hedge against inflation.
- Rental
For some investors, collecting rents is the first immediate return they enjoy. Most buyers rent throughout their ownership period, before realising the capital appreciation of their property.
Rental generates a passive source of income for its owners. Regardless of industrial, commercial or a residential property, rental market in Singapore has become promising given its economic openness to foreigners.
Although the renting is a practical mean of profiting from your assets, the gross rental yields in Singapore remain poor, ranging between 2.35% to 3%, lowest it has been in decades. However, if you look at leasehold property in the mass market district, where you initial capital outlay is smaller, you can net a rental yield above 5%.
If you are looking to buy a property to rent, do note that rental rates are influenced by demand, economic situation, Singapore’s growth, number of foreigners inflow and supply.
Find out where we are in the Singapore Housing Cycle .
If you are curious on what to expect, the complicated rules, or wondering which type of property you should purchase, keep checking back on our Property section!
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