How To Determine The Best Options For Homeowners By Understanding The Key Criteria In Investment

February 16, 2021

As we swiftly push through Q1 of 2021, what can we say about the current state of Singapore's property market? Despite the pandemic, sales volume have spurred due to pent-up demand following the circuit breaker and the reopening of Phase 1. Despite high demand from foreign buyers, the government's cooling measures, namely the Total Debt Servicing Ratio (TDSR) and the Mortgage Servicing Ratio (MSR), have kept property prices stable and resilient. Low interests rates are cheapening housing loans, and new launch sales are on the rise thanks to competitive sales strategies from developers. Altogether, we can safely say that the pandemic has not deterred buyers from taking to the property high-streets. 

With the current buzz around Singapore's property market, you may be looking to enter the real estate ring yourself? Investing in property can offer stability and higher returns but it also comes with many risks. Hence, investors and homeowners—especially new ones—must remain prudent in their purchase to ensure a successful investment. To help you, we will be discussing how to find the best options on the market today by understanding the key criteria for investment, as suggested by PropNex's James Gan. 


1. Entry Price 

Before entering the real estate market, you must first understand how to accurately compare various markets and properties.  Less seasoned buyers often make the mistake of underestimating the affordability of a property before purchasing. As an investor, it is essential to keep up to date on influencing factors, such as the state of the economy, changes to existing policies, and the current dynamic between supply and demand, all of which will affect your entry price.

Avenue South Residence is an example of an affordable choice. Along with good location and access to many amenities, its entry price is reasonable. Additionally, the upcoming transformation plans near the project are hard to miss! The Greater Southern Waterfront will lead to significant development in the area, increasing land value.

Indeed, with a lower purchase price, the higher the upside potential. Therefore, your entry price is crucial in determining your capital growth. Do note that housing prices will continue to appreciate as the population grows and land becomes more scarce.


2. Transformation Plans

Besides a strategic location, plans for future developments will be an important consideration to make when selecting a property with strong growth attributes. 

It comes as no surprise that a property with greater opportunities for future development holds more value. One good example includes Jurong’s massive makeover from industrial to commercial use. The government's plans to transform the area into Singapore's second Central Business District (CBD) has already had rippling effects on prices—average price from $500psf rose to $1,600psf after transformation.Appreciative developments like the Greater Southern Waterfront will surely increase land value over time, attracting more potential buyers along the way.


3. Exit Strategy

Having a clear exit strategy is by far the most important criteria of all. At some point in your ownership, you will have to decide whether to sell or rent out your property. Therefore, knowing the liquidity of a property is vital to ensure it has a strong resale demand. High liquidity means the property is easy to sell at market value. As an investor, this is something you need to consider for both capital appreciation or rental income. 

The next obvious question to ask: Whether to hold on to your existing property or consider upgrading? With the current interest rates being at some of the lowest in recent years, it is difficult not to take the opportunity to invest. However, before making any decision, you have to make sure it aligns with your future goals and current financial standing. 

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The value of a property is based on its market appeal. Before making any purchase, identifying the key criteria in investment is an important first step to ensure you achieve your investment goals. This is where our team of expert property consultants can advise you on your best options. Reach out to Property Giant Singapore today, and our agents will be happy to assist you!

The above article is written with reference from SPS2020 webinars, organized by PropNex in collaboration with Mediacorp and 99co.

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