Singapore Property Outlook—the way i see it.

To those who have been skeptical and been standing on the sideline and waiting for the property bubble to burst, well brother, you could be in for a long haul. I have long maintained that since the last one that was “pricked” by a legislative needle and coincided with the regional financial crises of 1996/7, there ain’t got no property bubble since. Not just yet.

At present, all factors are pointing to a strong and stable property market with another round of upward momentum in store. And Minister Mentor Lee recently came forward to say that there is no bubble in our property market. The man has got all the statistics and the experts working for him , so what better assurance can you get? So if you still prefer to stand on the sideline and wait for the bubble to burst, I have got a good suggestion for you. Let me touch on that at the end.

The figures are out and showing the first half 2010 GDP hitting 18%. Isn’t this amazing? This phenomenal figure is really mind-boggling, minding the Credit Crunch that rocked the world financial system happened only not too long ago in 2007. Remember, stocks across the board were then dropping like ten pins at the bowl. And now, most analysts are in agreement that ——- our GDP will hit at least 15% for 2010. It looks like we can start ordering fat turkey and Dom Perignon for Christmas. Following that, it was officially announced we need 100,000 foreign workers immediately to cope with the explosive growth. More and more tourists are coming and we all know the integrated resorts have certainly helped to provide the X-magnetic factor. Talk to any taxi drivers and the sincere ones will tell you business very good as there are more passengers to pick and choose. Take a drive to Geylang or Serangoon part of Little India and you can be caught in a traffic jam even at 3 in the afternoon, a clear sign of good business starting early . With the general election coming —-some say this year end and some say early next year—-there will be more goodies and good news from the government. The feel good feeling must be generated and prevailed for reasons that we all know too well. With money lining up pockets of those who have and those who have made it , the buying spree and spin-offs must come. In the Singapore context, investing your money in property is the best, well-proven, and time tested form of growing and protecting your asset. Those who have little, work and save hard to buy that one roof over the head, and the first step has alway been the HDB path. Those who can afford go for the private. Those who own one property, aspire to own two. Those who own two, want to own three ……and so on. Many property investors that I know, have dreamed to retire a successful landlord. With properties to rent out, you need not work ( or work so hard ) as you now have rental income to supplement. How nice !

It is also everybody knowledge that Singapore property market is buoyant and poised for continuous growth ( I am sure for sometime to come ) as it is constantly augmented by the constant inflow of foreigners coming to work and settle here. Foreign residents who can afford, will go for the private apartments and landed , while those who have smaller budget go for the HDB resale market. Interestingly, according to Alvin Tan of Savills Realtor, 23.2 per cent of private property in 2009 was bought by foreigners. The top three foreign nations buying private homes in 2009 were Malaysia (25.1 per cent) Indonesia (18.4 per cent) and mainland China (16 per cent). These traditional 3 front running nations now has another contender looming close and catching up fast. That is India. In today’s Straits Times, we learn —-of the the 1.79 million foreigners and PRs living in Singapore, almost a quarter or 400,000 plus are from India. The Indian professionals employed by the IT, finance, trading, manufacturing, service sectors , are seeing rising number applying for PR status which allow them to buy into the HDB resale market. Recently , while helping my nephew on a house hunting trip in the HDB resale market, my agent kept reminding my nephew to decide fast if he wants to secure that good unit near the Serangoon MRT. According to her, she has seen growing number of foreign professionals snapping up HDB resale in the heartland and most have wisely chosen units near to MRT or light train stations. If you are slow and indecisive, they will beat you to it.

So for those who are side- lined, indecisive, and still waiting for market to drop, my suggestion to you is don’t wait. Do something. Remember habit number one —–Be Proactive. If you think that the price of private property is too high, reaching unrealistic level, gone beyond your reach, you still have a choice. Go and park your money in a big HDB resale flat. I honestly believe the big, modern ones (be it 5-room improved, executive, HUDC ) , well located near MRT and amenities is the best bet with good upside potential. The reasons why this category of HDB is in my opinion the best bet are—–PRs and locals can buy and they are buying them up now, private property market is flooded with too many small ( less than 1100 sq ft and mickey mouse) units asking above $1000psf and that is pricy. Hence a well located big HDB, with many still priced at around $400 psf in the resale market is really value for money. So if property price still keep going upward ( and God knows when it will stop ) and refuses to come down, at least you still have a HDB roof over your head. Also after 3 years, you can rent it out and get a monthly return that will far exceed your monthly installment that you pay to the bank .

While some are unhappy with this state of affair, most of the more than 90 percent Singaporeans who own one or more properties are not complaining. You see, when they see the price of their own property goes up, it gives them a feeling of stability, satisfaction, and abundance.

Best regards and have a blessed day.

Moses Tan.

The writer Moses C.M Tan was a senior bank officer with United Overseas Bank for more than 30 years and played a significant role in growing the bank’s home loan, credit card, and branch banking business. He called it a day in 2004 and is now a loan specialist and spend most time helping his clients in arranging financing for their property investment. He has a wide network of friends and associates in the banking industry and is therefore best able to obtain for his clients the best loan package tailored to their specific needs. Besides loan brokering, he does consulting, training of bank officers, head hunting for banks. He has a wealth of knowledge in the financing and marketing of residential /commercial properties, and has helped many of his friends and associates in making the right choice in this alluring area of investment. After all, the key to making money, saving money and protecting your money in property investment is all about making the right choice in WHEN to buy, WHAT to buy, HOW much to pay, and WHERE to borrow.

Moses Tan Chee Meng
Synergy Business Network.
Mobile: 96359288.

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