I found a property in Singapore. It's got everything that I want. It's got a rental yield that's unheard of, that will easily cover my mortgage plus give me some income. Even if S'pore's Swap Offer Rate rises to 3.5% in 2012, my yield will still cover my interest + some of my principle. It's strategically located near a place that will be redeveloped into something huge. It's a rare find.
My worry, a big one at that, is what if the economy goes into a double dip? Will I have ammunition left to buy more properties when everything is cheaper? Will the value of my properties drop so much that the banks ask me to top up? Could I have timed my purchase better? More importantly, will my property continue to rise due to the catalysts? I recalled Chiltern Park bucking the trend and rising even during the financial crisis. Is this another "Chiltern Park"?
We are at mid cycle. I am more bearish on properties than on stocks because properties have an element of supply overhang from 2011 onwards. I can see mickey mouse units' prices tumble. Seriously, who the hell wants to live in a rabbit hole 500 - 700 square feet? It's just a developer's gimmick to buy land bank through en bloc and then increase the average selling price through smaller units. When all these studios are finally being completed in 2011 to 2012, the shit hits the fan because the owners will find no tenants.
Always return to the fundamentals. 2-bedroom and 3-bedroom units are the best buys because it caters for single expats, newly married couples and small families. There are 3.9 people to a household in Singapore so on average 3 bedrooms are just nice. I tried living in a studio once. It's impossible.
If I buy now, the economy must avoid a double dip and my new place must gain interest. I believe it will.
