Capital Appreciation Via Investment in Real Estate

According to the Ministry of Trade and Industry in Singapore, the country’s economy expanded by nearly 2.5 percent in Q1 2017 and its set to grow by 3.5 percent this year from previous projections of 2.2 percent. Having the most advanced economy in Southeast Asia, Singapore is arguably the financial hub for the region.

This is buoyed by growing manufacturing activity, improving bilateral trade accounts and the influx of tourists in the country. Strategically located along the Strait of Malacca, openness to foreign investment, government supported business ventures, along with many other factors, make Singapore a safe haven for your property market investments. Investments in Real Estate tends to bring in capital appreciation through its investments in real estate. There are many investments in Singapore and capital appreciation through Singapore properties is one of them.

Investments in Real Estate in Singapore

Facts About Singapore As Real Estate Hub
• Strong Rule of Law: According to the World Bank Ease of doing business Q2 2017, Singapore is one of the best places to invest.

• Political Stability: Its now over decades and the country has never witnessed any instability or civil unrest, making it attractive for an investor.

• Relatively Stable Currency: For the past 5 years, the Singapore Dollar has been efficient for any global transactions.

• Strategic Location: With a GDP per capita of USD 90,531 behind Qatar and Luxembourg, the country is strategic for high-end investors looking to gain from their property investments since Singaporeans can afford luxurious life.

• Policy Measures: The loan obligation that one shouldn’t exceed 60% of gross monthly income was scrapped for mortgages. Rental taxes are as low as 10%.

• Increasing Foreign Investment: About 38% of Singapore’s population is foreigners. Indeed, foreign investment in the real marked went up 5-fold from the previous year of USD 4.1 Billion.

How To Invest In The Real Estate Market
• The Real Estate Investment Trusts (REITs): Singapore is a center for REITs in Asia. REITs ensure that investor’s liquidity is secure on a daily basis.

Capital Appreciation Via Investments in Real Estate Singapore

As shown by the 2017 Bloomberg analytics, the benchmark FTSE ST REIT Index (FTSREI) in Singapore, the index performed better than the broader Straits Times Index (STI). FTSREI recorded a return of +19.7 percent for past five years compared to the STI index which only recorded a 3.2 percent gain. Both capital gain via selling and renting are desirable.

Comparably, REITs in Singapore outperformed those in Japan, Australia, U.S and even Hong Kong as indicated by the Bloomberg and CLSA data of Q2 2017. In fact, a similar 10-year bond yield for Singapore government outpaced U.S one by a difference of nearly 2.5 percent profit.

• Own Property: One may buy or construct properties in Serangoon, Central, or Woodlands area which are popular with expats and closer to key airports. Bloomberg shows average property yield in Singapore is 3.5- 6% and with a cost of loan averaging 1.5%, it’s profitable.

Gaining Capital Via Rental and Selling Singapore Properties

For keen property investors, Singapore’s real estate market has both strengths and weaknesses; however, its strength outweighs the weakness. Real estate market for this country is highly efficient and based on the fact that English is an official language, it means you might not need to deal with translations and any form of bureaucracy.

Going ahead, we expect Singapore’s robust rule of law, political stability, stable currency, and its strategic location to drive property prices up. In addition, comparable city-states such as Lichtenstein, Monaco, or Hong Kong may increase demand for rental space in the Asia region as they are pricier than Singapore. This makes Singapore a more attractive place for real estate investment.