This report is for those who are trying to figure out their next step in the light of the ABSD measure that has aroused much attention in the real estate industry. How are you going to protect your financial interests? What should you do with the property on your hand?
The market is rife with news of the Additional Buyer Stamp’s Duty implemented by the government as a cooling measure for the private property market. At first glance, it may seem like you will be hard hit by the expected decreased demand. However, if you seize the opportunity now, you can lock in a significant amount of profits in cold, hard cash just like a fellow investor:
He purchased a 4th floor unit of Caspian in 2009 and has recently sold it at a profit of $342, 700! A worthy investment indeed considering the short span of time.
Good news for you here: You can do it too!
Strong foreign interest has caused a significant hike in the prices of the private property market and this is the time to let go of your property for a return on your initial investment. A bird in the hand is worth two in the bush, so instead of sitting on pure paper gain, wouldn’t it be better if you can convert this into cash profits?
It has been about a week since ABSD is implemented. We are expecting an initial price stagnation with correction coming subsequently. Any new measures would generate market sentiments and it is human nature for people to wait it out. What this means is that your potential buyers will probably hold off their purchases to observe the market.
A reduce in demand only mean one thing – the selling price of your property would not be on the rise anymore. As of now, the value of your property is going to remain where it is where depreciation will come as time pass. A bane for the owner, for you!
Despite the inevitable decrease in demand that will impact the selling prices of private property, a free fall is not likely to occur because:
- HDB prices are still increasing 5 to 10% on a yearly basis. Those on the borderline might still opt for an entry level priced private property.
- Foreign owners of private property will turn to renting their houses instead of purchasing more properties to avoid incurring the ABSD.
- Transactions of property are mitigated or held off. With little price movements, free fall is unlikely.
Foreign investors experience the greatest impact under the new measure so demand from that sector will decrease significantly. However, Singaporeans still account for the majority (85% according to Straits Times Credo Research) of purchases of mass market private property so sufficient demand is still sustained.
HDB upgraders who have netted a profit of > $200,000 after selling HDB flat will still want to advance into private housing. It is pretty evident that the government want to shift the influence of price movement from foreign investors to these HDB upgraders!
So How This Concern Me?
Prices would be hard to predict – that you and me can be sure of. The media’s constant coverage of the ABSD would only fuel market sentiments so the best time to lock in your profits is now! Take control of the situation instead of being passive. The smart thing to do is to let go of the property now during the uncertain period than leaving it up to chance with your profits.
By doing this, you capital is safe in your own pockets again. Now, using the profits (the money of your buyer), you can start to invest in areas that are not affected by the new measures.
This is true, but think about it this way, none of us knows for sure exactly how much the price fluctuation would be. Would you rather subject yourself to a passive situation where your investment is vulnerable to any change in the policy or market sentiment?
Time is money.
Don’t waste your time trying to hope for the situation to improve. I will show you how you can restructure your investment portfolio and direct other people’s cash to areas that will generate a passive income, at no risk of using up your personal capital.
Just contact me here and I’ll be happy to help with you with a one to one complimentary consultation.
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