Why Should Young Singaporeans Invest In Property Market?
Investing in Singapore’s property market is one of the best options for young working adults in this tough economic situation. There are various reasons that make property investment in Singapore a significantly profitable one. The first reason is the interest rate of the loans which is low in Singapore. It is quite manageable to borrow a large sum of money for young working adults at lower interest rate for buying a property. Hence, the rate of return of the investment always remains on the positive side. The second reason is the guaranteed rental income. A young working professional can easily pay back the loan from the rental income earned from the property. Paying off the loan directly helps rebuilding equity. The third reason is the drop in price. The property market is going through a correction at the moment which makes it a very good option for long term investment.
However, there is no denying that average price of property in Singapore is one of the highest in the world. This is because the country has the highest GDP per capita in the world and one in every six households has a disposable income of more than $1 million. It is true that many people have shied away from investing in Singapore’s property market in the past couple of years due to the high price. The situation is now changing. The government took several cooling measures in 2012 and 2013 in order to prevent formation of a fully-fledged bubble. The measures already started to impact on the buying and selling and are stabilising the market. Barclays recently said that property prices in Singapore will go down by 20% by 2015. The report further forecasted that prices will fall about 5% in 2014 and another 5-15% in 2015 because of the general expectation that short-term interest rates would start climbing in the last quarter of 2015. The cooling measures are also aimed at ensuring that there will not be a crash in future. This means the property market will be more stable in the years to come. If the young working adults invest in properties now, it will give them a good return in future.
Generally speaking, as long as there are investors wanting to grow their money more than what they get from the bank, property investment will always be one of the most attractive options. If one can pick the right buy at the right moment, the investment is bound to yield good returns. The situation is no different in Singapore.
Political stability in Singapore is high, the rule of law is very strong and the government works aggressively with the business community to attract more and more businesses to have their headquarters here. It means a stable demand for both rent and housing will always persist.
Investing in property helps towards wealth creation in the long run. Most rich people around the world have a portion of their investment in the property market. A report of the Forbes said that most of the richest people develop as well as invest in real estate to reap profit from the investment plan. To Singapore’s credit, the average wealth of the people in Singapore comes from the appreciation of the property value than from any other assets. That is why it is a very good option for the young working adults.