Investing in real estate or buying property in Singapore can be very profitable. However, like every other profitable endeavour, it comes with several risks. Here are the things you need to consider while investing in real estate in Singapore.

Property Risks #1: The Fluctuating Prices

In Singapore, the market was previously saturated with people wanting to buy property due to the stable Singapore environment. The demand was higher than the supply and sellers were able to set prices as high as they wish. This led to higher property prices.

The high demand and low competition trend in real estate are however reversing. Many developers are releasing new projects and supply has outstripped demand. Property prices have been slowly declining.

Any investors looking to purchase a property in Singapore have to ensure that they enter at the right timing.

Property Risks #2: Tedious Bureaucratic Processes

The government of Singapore has strict bureaucratic processes for real estate projects. These processes are necessary in order to obtain approval for projects and fulfilling the pre-requisites before the property can be sold.

However, some developers tend to overlook these processes. In fact, 7 such projects with a total of 574 homes have recently been identified. They have the planning approval from the Urban Redevelopment Authority but lack the pre-requisites for sale.

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City Development’s and IOI’s South Beach project are among these projects.

In fact, some prestigious project such as YTL Corporation’s 89-unit development at Orchard Boulevard is also not exempt from this list.

Read: 5 Property Websites In Singapore To Buy, Rent & Sell Houses

Property Risks # 3: The Turnaround Time

The turnaround time for real estate projects is now faster than before. There was a time when developers took about 43 months to complete a project. This slow turnaround was due to the uncertainty in the real estate market.

Today, things have changed. You can now expect a project to be completed within 5 months.

Property Risks # 4: Legal Risks

Legal work is yet another factor you need to keep in mind. You need to follow the rules and regulations to stay clear of charges and penalties. Make sure you know the rules of property transfer and purchase. You can even consult a real estate agent or lawyer to help you out in this matter.

Property Risks #5: Mortgage Eligibility and Suitability

The Housing and Development Board (HDB) provides housing loans at concessionary interest rates to flat buyers. However, to prove your eligibility, you need to go through a credit assessment and mortgage loan eligibility process.

If you don’t meet the criteria set by the HDB, you can always take the loan from private banks and other financial institutions. Make sure that the Monetary Authority of Singapore licenses whichever bank you choose.

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Property Risks #6: Illiquidity in the Real Estate Market

As mentioned before, the price of real estate in Singapore is rising due to its high demand. So, illiquidity is only a minor risk. But it’s always a good idea to be careful and do your research before you invest in a particular property.

In a Nutshell

Real estate investment has many benefits. You can buy a property and then sell it for profit. You can even give it on rent to have an alternative source of income.

Either way, real estate is a long-term investment. It can help you plan your finances better. It can help you improve your future. Moreover, it can be of a great help after your retirement.

Nonetheless, real estate investment has some associated risks that you need to be aware of. These risks include prices, bureaucratic processes, legalities, and illiquidity. So, if you plan to buy property in Singapore, do so wisely!

Singapore Housing Cycle and Property Measures– Where Are We?

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Founder @ The New Savvy
Anna Haotanto is the Advisor (former CEO) of The New Savvy. She is currently the COO of ABZD Capital and the CMO of Gourmet Food Holdings, an investment firm focusing on opportunities in the global F&B industry. She is part of the founding committee of the Singapore FinTech Association and heads the Women In FinTech and Partnership Committee. Anna is the President of the Singapore Management University Women Alumni. Anna invests and sits on the board of a few startups. Anna is also part of the Singapore Chinese Chamber of Commerce & Industry Career Women’s Group executive committee. Anna’s story is featured on Millionaire Minds on Channel NewsAsia. She hosts TV shows and events, namely for Channel NewsAsia’s “The Millennial Investor” and “Challenge Tomorrow”, a FinTech documentary. Anna was awarded “Her Times Youth Award” at the Rising50 Women Empowerment Gala, organised by the Indonesian Embassy of Singapore. The award was presented by His Excellency Ngurah Swajaya. She was also awarded Founder of the Year for ASEAN Rice Bowl Startup Awards. She was also awarded the Women Empowerment Award by the Asian Business & Social Forum. Anna has been awarded LinkedIn Power Profiles for founders (2018, 2017), Tatler Gen T, The Peak’s Trailblazers under 40 and a nominee for the Women of The Future award by Aviva

2 COMMENTS

  1. […] you’re thinking of being an adult and investing in purchasing a property in Singapore. Way to go! Without sounding like we’re ridiculously biased, Singapore does have many things […]

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