Profile of the Typical Singapore Property Investor

By Getty Goh (guest contributor)

Property is a hot topic these days and it seems like everyone is jumping onto the property bandwagon. In my line of work, I often come across seminar participants who ask me where they can find good property deals. What many of them fail to realize is that finding good deals is only half of the solution. The other half is having a good understanding of their investment profile (i.e. risk appetite, investment horizon, budget, holding power, etc). Very often, the difference between a profitable deal and a non-profitable deal is determined by an investor’s ability to hold on to the investment, regardless the market condition.

To better help my seminar participants, my company, Ascendant Assets Pte Ltd, has developed a proprietary Property Investor Profile Survey (PIPS) to help our clients better understand their individual investment profile. After doing the survey, we will score them based on a scoring system that ranges between 1 and 50. Investors who score close to 1 tend to be more most risk adverse while those who score closer to 50 are generally more aggressive. Based on out PIPS, we were able to draw many interesting conclusions on the typical Singapore property investor.

Profile of the typical Singapore property investor

The typical Singapore property investor has an average score of 27.9. This would put them in the Balanced Category. Investors belonging to this profile are typically long terms investors who are prepared to hold on to their investments for more than 10 years.

The typical property investor has been working for quite a while and has accumulated some cash for his/her property investments. The average age is 46 and 82% of the respondent are married.

The typical Singaporean property investor is fairly cash rich. Almost 42% are holding on to between S$100,000 – S$400,000 of cash on hand. The breakdown of the amount of cash they have is shown in Figure 1 below.

Source: Ascendant Assets Pte Ltd

Risk Appetite

In terms of risk appetite, typical Singapore property investor is generally quite risk averse. This can be inferred as more than half (56%) feel that protecting against losses was more important that earning high returns (See Figure 2).

Source: Ascendant Assets Pte Ltd

The conservative nature of property investors is reinforced as 69% of respondents disagreed to the following PIP survey statement, “I am comfortable with large declines in value if there is a potential for higher returns” (See Figure 3). This indicates that most investors are unwilling to accept large declines in value even if it means the potential for higher returns and property investors are generally not the speculative type.

Source: Ascendant Assets Pte Ltd

Our findings are congruent to the fact that unlike the more liquid assets (i.e. stocks, commodities, Forex), property investors are looking for a secure mechanism to grow their wealth. For those of you who would like to know what your investment profile is, please drop us an email at research@ascendantassets.com. We’d gladly provide you with a complimentary analysis so that you will be able to make a more informed decision for your next purchase.

To conclude, let me share a quotation from Sun Tze, the military strategist and author of the Art of War wrote, “I**f you know your enemies and know yourself, you will not be imperiled in a hundred battles.” Similarly, apart from knowing the property market, if you know yourself well, you would be able to “avoid peril in a hundred investments”.

By guest contributor Getty Goh, Director of Ascendant Assets, a real estate research and investment consultancy firm.