Equity Focus : The Goat And The Real Estate Market

This post was written for www.hnworth.com, a site targeting high net worth individuals in Singapore.

Have fun reading !

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Enter the lunar new year of the Sheep or Goat or I read, ancient texts have the Dog in this space previously as the Horse replaced the Deer.

I am not sure what this Wooden Goat heralds but Chinese astrologers more or less concur that it will be less temperamental than last year’s Horse.

My Chinese new year observation is that small businesses are still struggling as another spa opens up on Balestier Road. The former tenant, a hardware shop, simply could not cope with the suddent 200% increase in rental of $10,500 from $3,500 previously which the spa could most certainly afford given the high cash intensity and less transparency, making it easy to book profits.

Some landlords have it good these days, unless you happen to be looking to let out our residential investment property in Sentosa perhaps ?

For Asians, real estate investment in the blood and residential investment properties are by far the easiest to understand and manage for the average man on the street investor out there.

With 75% of Chinese wealth tied up in real estate and an estimated 47% for Singaporeans, the percentage greatly outstrips that of the American who has just about 28% of their household wealth parked there.

 

Judging from the number of daily sms-es I receive hawking properties down by Kallang River, commercial units in Paya Lebar and condos in Myanmar, Iskandar and wherever you can name with the except of the Middle East and Africa, I think that real estate investment will always be the cornerstone of many a portfolio in Singapore.

For me, I believe there are more ways to invest in real estate, observing what astute investors did in the past. People like my former boss who loaded up on Keppel Land shares for years before he committed to buying a property.

Stocks, reits, collective investment schemes, land banking, hedge funds and more, it has got me thinking if home ownership is, as Nobel laureate Robert Shiller suggests, worth more than starting a business or paying for education in the case for the lower income bracket which I extend to the wider spectrum of real estate investment.

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