Asked by Anonymous
Is it still worth it to go through the hassle of purchasing a second property in Singapore in current times - with stamp duty and rising interest rates. And limited capital appreciation. I know that in our parents' time, property investment is the way to go - or so it seems. But how about now? How does it compare to say, UT or insurance? Can someone enlighten me? Thanks!
Current times are currently in a pear shape for Singapore - we used to have a lot of opportunity and demand, but its considerably less now because there just aren't as many people to fill these slots in. We compensate with foreigners, which is fine but its not to the same effect.
Additionally, affordable housing policies means that the government will compensate via taxes, which is exactly what they did.
There are some plus points - if you enjoy management, and challenging yourself to get an above market-value deal, especially if you get and flip a good location, you'll get a substantial amount of rent before selling it at a profit - but those come with risks, time and a lot of active management.
Even then, I'd be impressed if you can yield an annualized double-digits yield across a 10year period. For example, if you buy a property at $600,000 and sell it ten years for $888,000, its a $288,000 gain.
That's substantial, but when you actually do the math its less than a 4% annualized yield. You could get more from your CPF, and even more from investing.
Investing in funds will also allow you much more liquidity and flexibility while saving time on management.
I'd love to consult you on this if you're comfortable - we could easily put together a fairly balanced, diversified portfolio that can yield 7% or more.
You can reach out to me below.