Investing in Singapore Property (Part 2)
We have discussed in the previous blog on “Why Invest in Property” and have established that property investment is very profitable if done right, and can even contribute to your financial freedom by offering you with passive income.
In this new blog on Singapore property, let’s talk about why invest in Singapore property, as compare to investing in properties in other countries.
Singapore real estate market has always been sought after by investors locally and internationally. For foreign buyers of Singapore property, traditionally many of them are from Indonesia, Malaysia, Hong Kong, China, as well as Europe and US. Many of them are from nearby Southeast Asia countries too, like Thailand and Vietnam.
Many wealthy foreign buyers like to buy properties near Orchard area in Singapore, due to its prime location and other appealing factors, but some like to buy in different locations like Central Business District, Sentosa, and even in city fringe locations, like Novena, Farrer Park, Queenstown, and others.
Here we discuss some of the major reasons why invest in Singapore property, and what make it so appealing to foreign property investors.
Economy and Wealth:
Singapore is a first world country, the only first world country in Southeast Asia and one of the few first world countries in Asia, along with Japan and Hong Kong. In terms of economy, it’s one of the best in the world.
According to many studies and reports, Singapore is one of the top 4 financial hubs in the world, right up there with London, New York, Hong Kong, and Tokyo. Also, in terms of income per capita, which is a good measure of the wealth of the country, Singapore ranks in top 10 in the world. In fact, Singapore also ranks top 10 in the world when it comes to millionaire density.
These facts alone have shown that Singapore is a prosperous country, in terms of economy growth as well as the wealth of the people.
And the open nature of its economy, couple with the facts that Singapore has one of the lowest corporate and individual income taxes in the world, has make Singapore extremely attractive and appealing in attracting MNCs to set up businesses here and foreign wealthy individuals to move to Singapore to work and live here.
In addition, Singapore strategic location as the gateway to Southeast Asia also attract many international and regional companies to set up offices and headquarters here, and therefore creating more high-paying jobs and wealth in Singapore.
With more high income and high net worth foreigners move to Singapore to work and live here, the demand for properties are constantly increasing, both for the rental as well as capital appreciation of the property.
Political Stability:
Singapore is known to be a safe and politically stable country, especially in Southeast Asia where its neighbours suffer constantly from political instability.
This is especially important for foreign investors because they want to invest in property in a country where it’s stable and safe, so that they won’t be expose to unnecessary risks and their properties will not go down significantly in value due to unrest or changing of government.
In that sense, it explains why many high net worth individuals from Indonesia like to invest in Singapore and diversify their investment and portfolio here, because they know that their assets in Singapore will be safe, as compare to their country. Investing in Singapore property offers a peace of mind, and is a great way to diversify their wealth and protecting their asset.
Currency Strength:
Singapore Dollar is the strongest currency in Asia, and is growing in strength constantly over the years, especially against the currencies of the neighbouring countries like Malaysia and Indonesia.
That is another strong and compelling reason why the wealthy individuals from Malaysia and Indonesia like to buy property in Singapore. They enjoy appreciation on 2 fronts, appreciation from the property itself, as well as currency appreciation as Sing Dollar is also appreciating against Ringgit and Rupiah.
The same principles apply to other countries too, not just Malaysia and Indonesia.
The strong fundamental and foundation of Singapore’s economy will ensure that its currency will continue to stay strong and appreciating in the future.
World Class Infrastructure, Medical, and Education:
As a first wold country, Singapore offers world class level of infrastructure (Including transportation), medical, and education. It also offers a big pool of highly educated workforce due to its world class education system.
These are important requirements when it comes to attracting companies to set up offices and headquarters here, as they need to attract world class talents from all over the world to move to Singapore to work and live here.
These world class level of infrastructure, medical, and education, as well as a modern and liveable city, offer a high quality of lifestyle, and hence serve as a compelling factors in attracting foreign direct investment, MNCs, foreign ultra high net worth individuals to make Singapore their home. And it directly benefits the property market in Singapore.
Some of the notable foreign high net worth individuals that move to Singapore and called it home include Co-Founder of Facebook, Eduardo Saverin, and renowned hedge fund manager Jim Rogers.
Land Scarce Singapore:
Singapore is a small country by land size, one of the smallest in Asia. As of 2018, the population in Singapore stands at 5.8 millions, and it’s expected to increase to 6.9 million by 2030.
It means the supply of land is limited, despite government effort of reclaiming more lands from sea. With the increasing population and therefore higher demand for properties, and the short supply of limited land, this demand-supply relationship will ensure the value of Singapore properties are always protected and appreciating.
Unlike other nearby countries where they have vast sizes of land like Malaysia and Indonesia, Singapore will never experience the “oversupply” of properties issue.
Oversupply is a common issue in property market face by many other countries, where developers build more and more properties and the supply eventually outstripped demand. And when that happens, the value of properties will be affected and going down in prices. Rental return also affected negatively as a result of oversupply of property.
In Singapore, due to the limited land supply and ever increasing population, the oversupply issue are unlikely to happen and therefore give property investors confidence and peace of mind when it comes to their investments.
Prestige:
As a first world country and enjoying reputation as a world class city, Singapore properties are both highly sought after and prestigious, especially those luxury condos in prime locations like Orchard Road.
To many, it’s a prized assets and trophy homes that represent status and prestige, just like owning a high end property in prime locations of Manhattan and London. Owning a piece of high end condo in prime location in Singapore says a lot about the owner and its status. And therefore, a lot of the ultra luxury condos in Orchard and other city locations command huge premium.
So other than making financial sense when it comes to buying Singapore real estate, it also fulfil the emotional needs for the prestigious ownership of a luxury real estate in Singapore.
Summary:
Above are some of the reasons why an overseas investor should invest in Singapore property and the value it delivers.
However attractive it sounds, investing in property carry certain level of risk, which can be significantly reduce with the help of a professional real estate consultant like us.
If you are thinking of investing in Singapore property, we have many years of experience in helping investors getting their right investment property and helping them in renting it out for rental income.
Feel free to contact us HERE for non obligated discussion.
Regards,
Jack Ooi
Professional Real Estate Consultant (Singapore)
Contact Us HERE
Youtube Channel: https://www.youtube.com/channel/UCsttVaUP9IxNhryysHizwbg
