You want hard evidence that people actually made a lot of money from property investments?
In this post, I’ll show you one example, based on data from URA (see post on how to check property prices).
Valley Park is a nice 999-yr (almost freehold) condo development in the heart of River Valley area, very accessible and near to amenities, and just a stone’s throw from Great World City.
At the end of 2006, the psf value of the apartments in Valley Park are all 3 digits, ranging from $807psf to $991psf, with average being $884psf. A small one-bedroom was selling for just $660k, while larger units were fetching $1.5 million thereabout.
Come end 2007, the psf values of Valley Park condominiums rose to 4 digits, with an average of $1336psf for the 2nd half of 2007 up to October.
That’s an amazing 50% increase in just 1 year. With leverage (e.g. bank loan), you can easily get 100% or even 200% return on your investment.
Small units are now fetching prices above $1 million. Big ones are transacting at above $2 million. A 1,701 sq ft unit was sold for $2.7m just a couple months back.
You could have made these profits. That is, if you bought a unit one year ago.
But no one knows if now is the right time to invest in property.
2 Comments
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You’re right that it’s near impossible to time the property market, although, there’s actually more certainty than trying to time the stock market.
At the peak of the current global crisis, Singapore real estate prices fell more than 30% at end 2008-early 2009. Of course, these prices have gone back up and infact, surpassed the previous highs.
Bottom line is Singapore property prices will almost certainly trend up in the long-term due to limited land space and rising population/migrants. But since you cannot time the market, you better damn well make sure you have enough reserves to tide you through any unexpected economic crisis otherwise you’re screwed!