Unfortunately, many beginning investors hearing the words “real estate” and “Singapore” thinking about a pile of money required to invest in such a distant country. If you want to invest in Singapore property market capital may not be a constraint. Today, investors can own real estate through an investment vehicle called Real Estate Investment Trust (REIT).

What are S-REITs?

Singapore REITs (S-REITs) are listed companies on Singapore Exchange (SGX) that raise capital from investors to operate and finance income-producing real estate properties. REITs are required to distribute at least 90% of its taxable specified income to the unit-holders. For this reason, investors will receive dividends from the REITs regularly and potential benefit from the capital gain. Today, more than 35 countries have REITs, including all G7 countries.

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Global property market valuation and the current situation of the real estate market in Southern Asia

After 9 years of the bull market on the global financial markets, we are currently experiencing so-called “everything bubble”. The term refers mostly to developing countries.  Robert J. Shiller, Yale University economics professor and Nobel Laureate for his work on bubbles when asked in the interview what forms bubbles like one we could see on the stock or property market answered: “the reason of the bubbles are… bubbles.” This is neither population nor interest rates. Only an “irrational exuberance”  of a crowd drives prices to its insane levels.

The Shiller-Case Index presents home prices on the US market. We can observe that the home prices are very high now. The global houses are almost back to its level before the financial crisis. Prices were on the current level only twice during the 128 years traced history.

US Home Prices 1890-Present