While property progression is a sound way of securing your future and retirement plan, many people tend to get scared of the concept because of some myths. Some of the most common myths are:
1. HDB Flats are a Sign of Investment
Buying an HDB flat means that you have an investment on the side, and its value will keep increasing as time passes. This is not correct at all! There is a major hike, approx. Around 12% in the prices of HDB flats. The government has put various measures in place to deal with the scenario, which eventually led to lower demand and lower prices.
2. Asset Progression Needs Tons of Money
To get into asset progression, one needs to have a lot of money to invest. This is incorrect as well. One must have around 8% to 10% of the buying price to begin their journey if you don’t own a property, but if you do, you don’t even need that. There are tons of funding plans that can assist you throughout. Buyers often overestimate their real financial and CPF requirements.
3. Price Equates Profit
The pricier the property, the higher the profit. This is once again completely false. While it might feel like you are upgrading by buying an expensive property, it doesn’t always equate to more profit. Keep in mind that no correlation exists between the profit size and the price of the property. What’s more, a majority of times, it’s even challenging to profit from pricier properties instead of affordable ones. This is because the number of buyers available for affordable properties is always higher.
4. Not Taking Time in Consideration
Any real estate agent will tell you that the most important thing is to act quickly. Your whole wealth growth strategy might be ruined if you make a hasty choice or enter at the wrong time. You may lose a wonderful opportunity if you procrastinate too long. For Singaporean buyers, the loan-to-value ratio is an important consideration. Because of limited market entrance, the maximum quantity of loans you are eligible for may also decrease.
Use your CPF Strategically
When you have decided not to waste away your CPF on purchasing real estate, you can start by investing it in different regions that can boost your portfolio. The easiest options include buying stocks, buying property, or transferring the amount to CPF Special Account.
Make sure that you spend an ample amount of time researching your options before you make a decision. The first step in any asset progression journey is staying informed. Gauge Singapore landed property price trends, conduct a thorough analysis of your financial situation, and manage the risk in the most efficient way possible.
Reach us if you’d like some help with your own real estate port folio. We’d love to help!