Why Asset Progression?

Asset value increase

Real estate is a good asset investment class to grow your wealth. Swapping to the right property can help to increase your overall asset value while providing you and your family with a comfortable shelter and a lifestyle upgrade.

Leverage

Real estate also provides you with leverage from the banks, allowing you to maximise your investment returns with your capital. For instance, $1 million property will only requires $250k of cash downpayment (with the remaining $750k as loan from the bank assuming a 75% LTV) while the full $1 million worth of property asset appreciates and provides you with an inflation hedge.

Source: Squarefoot. High Park Residences transaction data.

Forced Savings

The monthly mortgage payments of a higher value property can sound like a big amount. However, the payments are in fact a form of forced savings, as the money paid toward the property is not all “spent”, rather it is “invested” and can be unlocked from the property value when you sell it in the future.

Retirement

Going through the right property journey can help to grow your asset value sufficiently such that you and your family retain the flexibility to unlock its value in your golden years for retirement.

Property Market Outlook

Source: Data from data.gov.sg and MAS

The Property Market in Singapore has increased steadily over the past decades. There are volatile periods when there are economic crises, notably during the 1997 Asian Financial Crisis and the 2008 Global Financial Crisis. However, the property market has always recovered from the lows and continued to grow. There are a few takeaways.

1. Overall trend is up

The market has increased over the years as property prices are also affected by the wider economic environment, where inflation affects building materials and construction costs. There are also other factors at play which increases the property prices, such as overall housing demand and the increasing wealth of residents living in Singapore

2. Time in the Market > Timing the Market

Property owners have benefitted from property price increases over the long term despite volatile periods. Short term speculators who time the market may make (or lose) a lot of money. It is not advisable to speculate as it is risky. The property measures put in place (such as the seller stamp duty) has also discouraged speculators from short-term property trading. It is important to have holding power (with the ability to service your mortgage and have a safety reserve fund), and a slightly longer time horizon when invested in the market.

3. A Highly Stabilised Market

The government has put in place cooling measures from the 2010, to stabilise the property market and keep it away from speculators. This has create a stable market environment and reduced volatile movements since the introduction of these measures. We expect the government to continue to monitor and safeguard the market to create a safe environment for the various stakeholders in the market.

What Can I Do?

STEP 1

Do your financial calculations to check if you are ready for Asset Progression. This involves detailed calculations on the cash proceeds from the sale of your property, the mortgage amount you are able to secure and service and the amount of CPF you can utilise.

STEP 2

Shortlisting the right property for your purchase. This is the most crucial step as purchasing the right property can help safeguard and grow your capital. Real estate is a multi-faceted product and needs to be carefully considered before making a decision to purchase. We help to incorporate our experience and our proprietary property selection framework to help you with the most ideal purchase.

STEP 3

Set your plan in motion. We can help you with the sale and marketing of your current property, the purchase of the new property, timeline planing, perform all the necessary due diligence checks and help to recommend accompanying services in your Asset Progression journey such as mortgage loan, conveyancing service etc.

  • While this is true in a general sense, there are different lifecycle stage to each property and hence changing to another property which has more growth can still make a significant difference to your portfolio.

  • Depending on the type of property you purchase (whether a resale or new property), various accommodation types can be considered. If your new property is move-in condition, you might be even able to move directly to your new property.

  • There are always opportunities in the market. We recommend a longer term horizon when purchasing a property with safety reserve fund. Being able to stay solvent will help you ride out volatility. On the contrary, waiting out is an opportunity cost.

  • Real estate is good class of asset to allocate and grow your capital and net worth. It is also a form of forced savings and a place of accommodation. Contact us to find out more.

FAQs