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.

My client’s portfolio

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...

clients profit analysis 2021
Clients profit analysis 2021

Key findings

1. Most properties achieved average 10-20% capital appreciation after holding more than 4 years. *2nd last column.

2. Most areas appreciated around 3-4% p.a. in the past 5 yeas. It could have achieved higher growth rate, if not because of the new cooling measures in July 2018. * graph below.

3. New launch projects appreciate faster than resale properties in general. (15% vs. 5% * graph below) Resale properties are mainly for own stay buyers, who have their own lifestyle preference, investment return may not be their key consideration.

clients profit analysis 2021 - annual return
clients profit analysis 2021 - average profit

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.

The private housing market in Singapore may well end year 2021 on a high note, as the economy continues to recover while the luxury and rental segments could enjoy a boost from foreign demand as more Vaccinated Travel Lanes set up. Mr Wong Xian Yang, Singapore head of research at Cushman & Wakefield, said new launch prices are expected to head north amid rising construction costs and land costs as well as diminishing unsold inventories. Fueled by upgrader demand, bigger units(3/4/5 bedrooms or landed houses) have appreciated by more than 15% in many popular areas, such as D15, D19, D20, etc..

Our observations suggest that buyers’ confidence remains generally intact, buoyed by the low interest rate environment and excess liquidity in the market.

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.
  • Mar 2021 - SkyVue blk 3 owner had took profit and re-invested into a freehold property in the East.
  • Mar 2021 - Tanamera blk 8 owner had cash out and planning an upgrade.