With a significantly trending uptick in average property price per sq. ft. in the past decade and the property price-to-income ratio projected to hit a multi-year high; is the Singaporean ambition of investing in property an impossible dream?
Property investing has always been thought of as the surest way to grow wealth but with the changing economic landscape, many are finding it increasingly difficult to make it part of their investment strategy. In fact, there is opinion that “properties might not be as in demand in the future as investors hope, with Singapore’s population expected to peak by 2045 if it continues on its current trajectory. With tight immigration policies, it might also be difficult for property buyers to find tenants who want to meet their rental prices.”
This is where REITs come in to ‘save the day’ – so speaking as to offer an alternative option for eager real estate investors. Recapping my earlier article “Get Real About Investing In Real Estate”; by investing in REITs you are essentially ‘investing’ in real estate without purchasing the physical property. I also advise my clients to use it as a diversification strategy with intention to reduce risk. You can enjoy more diversity in your portfolio without the expenses of owning and managing these properties. The reality of real estate investing is: You need money to make money. The low liquidity of real estate means you need to have enough capital for the long term, and that might not be for everyone.
With soaring prices and diminishing sizes of new launches, property investment might not hold the charm it used to have. For investors looking for other options, REITs will definitely be an appealing alternative to include in your investment portfolio. Do speak with me if you are interested to learn more about REITs, and I will be happy to show how you can integrate it in your investing strategy.