Friday, April 1, 2011

Investing in Property is not just about buying Condos!

Hi Guys! It will be very difficult for new couples to own their dream home in the future. With the record pricing developers are paying for the new government land sales, our dreams are further dashed. The fact is that our incomes have not gone up in tandem with the times. International investors have pushed up prices. I highlighted that the Chinese are coming to buy in my earlier blogs. I told my students in advance and they certainly have made a lot of money.

What about the locals then? A new graduate’s starting pay has perhaps gone up by 20 to 30% compared to 5 years ago but our residential property has appreciated by more than 100%. This is in addition to the fact that the developers are really pushing prices to the max. CapitaLand paid over $860 ppr for their Bishan site; they have to sell the site at perhaps over $1500 psf to make a decent profit. Things certainly do not bode well for anyone with no exposure to real estate.

With the strong international fund flows because of the very low interest rate environment, I do not expect prices to adjust until interest rates go up. This is because there is really no where for the hot money to go. However, the pickings are slim for residential investors.

You might want to explore non-residential investments instead. I will share my insights once I ‘m back from Europe for my business trip. I should be back mid April so till then take care.

Channel News Asia (CNA) profiled me on their site; they basically highlighted how I have my firm in the last few years. You might want to check this link out.

Your Friend,
Andy Ong