Client Portfolio Review – How did my buyers’ properties perform?

I strongly believe in helping my client to grow their wealth and achieve their financial goals through sound property investment strategy.

Singapore property market is hard to speculate after 9 rounds of cooling measures. It’s advisable to adopt a mid-long term approach to achieve good returns. Property,however, remains as an attractive asset for both local and foreign investors due to our stable political and economic environment.

I have been keeping track of my client’s portfolio (as table below) on regular basis, so that I could alert them to take necessary actions based on market conditions. Key findings followed after the table...

my clients portfolio 2019
Market Value Updated Oct 2019

Key findings

1. Most properties achieved average 12-24% capital appreciation in the past 4 years. *2nd last column.

2. In fact, many areas appreciated more than 5% p.a. between 2015 to 2019 period. District 9 & 20 even achieved double digit annual growth, which explained why the new cooling measures took place in July 2018. * graph below.

3. New launch projects appreciate faster than resale properties in general. (17% vs. 7% * graph below) Resale properties are mainly for own stay buyers, who have their own lifestyle preference, investment return may not be their key consideration.

my clients portfolio 2019 chart

Property Market Re-cap

2015 was one of the worst period for property market, it's all doom and gloomy. Index had dropped for more than 8 quarters, and there's no signs of market turning, and very few buyers out in the market dare to commit. Yet, looking back, it turns out to be one of the best period to buy.

At the start of 2016, many people were still cautious about the market, waiting price to drop further and hoping government to remove the cooling measures. However, their dream didn’t come true.

Seller Stamp Duty and Total Debt Servicing Ratio restrictions were eased in Mar 2017, coupled with en Bloc fever, property price started to turn in the middle of 2017.

Property market saw a steep rebound from the fourth quarter of 2017 and surged by 11% within 1 year. However, the market softened from July 2018 onwards after government imposed the new property cooling measures.

Private home prices in Singapore bounced to a five-year high in 2Q 2019 after slipping for two quarters, and interestingly, sale of luxury apartments hit 11 year high, fuelled by increased demand from mainland Chinese seeking safe-haven assets. There are plenty of new launch supplies in year 2019. Over 60 projects are in the pipeline to launch.

Despite a pandemic and an economic recession, 2020 has been a surprising year for the property market. The sales took a hit during the lock-down period, however it rebounded immediately after it entered phase 2. Various measures, such as allowing borrowers to defer their loan repayments, and allowing six months extension for developers to complete their projects, have probably prevented homeowners and developers from slashing prices. The new curbs on the reissuance of OTPs did cause a slight pull-back in market, it did not change the market direction of registering positive returns of 2.2% eventually.

Buyers need to be extremely cautious in choosing the right properties. In my view, less than 10 projects worth investing at this moment. (Refer to my top 5 best rated investment properties). Most of the other launches are overly priced due to hefty land cost developers paid. Island wide, new launch prices have jumped by almost 50% over 3 years, while resale price only inched up 9%, a clear imbalance between the 2 markets.

Client’s portfolio Action

Aug 2019 – Sims Urban Oasis blk2 owner had took profit and re-invested into a better location property at One Pearl Bank.

Sep 2019 - SkyVue blk 3 owner expanded his portfolio by investing into another unit at Avenue South Residences.