The bull: No better time than now to take the plunge

By Joyce Teo - Dec 9, 2006
The Straits Times
DR CLEMEN Chiang may not be a full-time property investor but the astute entrepreneur reckons there has never been a better time to enter the property market than now.

Only 32, he has already made his 'millions' from options trading. He has also bought two properties for investment.

'We've already gone through the worst - the financial crisis in 1997, the 9/11 attack, the Iraq war in 2002 and Sars in 2003. There's only one way up for the property market,' says the founder and chief executive of Freely, a company that teaches options trading.

The Government's plan for a two-point hike in GST to 7 per cent will only make Singapore more competitive because it will allow for a cut in direct taxes, he says.

'More people will then really consider this island a viable place to live, work and play,' he says.

KEEN EYE FOR INVESTMENT: Dr Chiang, who bought a Central unit early last year for $745,000 and says he already sits on paper gains of 15 to 20 per cent. Photo/ Mugilan Rajasegeran

'We may have more casinos and every casino will bring more dollars, more traffic to the country.'

Dr Chiang, who has a PhD in finance, believes that Singapore is the best island to invest in because it is part of the supply chain of oil, one of the world's most important commodities.

'In a rising oil price environment, Singapore is positioned to seize the opportunity because of her commercial interests in offshore oil rigs, petrochemical production and transportation of oil within South-east Asia - the world's most untapped offshore oil reservoirs.'

Asia will also benefit as the US economy continues to grow, he says. He notes that the Dow Jones Industrial Average, for example, has crossed the 12,000 mark which is a historical one.

He also believes that the presidential elections in the United States two years later will mean a fiscal boost for the world's largest economy.

'In the past, in the two years before the election, the government will inject money into the economy to create jobs, offer more contracts and so on to win the voters back,' he says.

Dr Chiang is a member of the Young Entrepreneurs' Organisation, which groups the founders of businesses with gross annual revenues exceeding US$1 million (S$1.5 million).

His properties include a 646 sq ft studio office unit at Central, atop the Clarke Quay MRT Station, and a three-storey terrace house in Serangoon.

He bought the Central unit early last year for $745,000 and says he already sits on paper gains of 15 to 20 per cent.

'We bought it because the integrated resort (IR) will be up in 2009. Over $5 billion worth of investments will pour into Singapore,' he says.

'My agent has been briefed to off-load it at $200,000 more. If buyers don't come, the longer I hold, the more profits I will sit on,' he says confidently.

Similar-sized units at the Central were sold at $1,274 psf in June this year, up from the $1,153 psf price that Dr Chiang paid.

'If you're looking at participation in the sub-sale market, you should look at a property that has the potential to move in a short time. You have to consider the needs within the area and the IRs,' he says.

Dr Chiang is renting out his Serangoon house to an expatriate for $5,000 a month, which covers his monthly mortgage of $4,500.

Everyone should invest in the property market, declares the property bull. But it should be at a level at which they are financially comfortable, he cautions.

He says property buyers could also look at the investment as a compulsory form of savings - that is, setting aside a portion of their monthly income to invest in an asset that will appreciate through time.

Dr Chiang adds: 'The foundation of all great businesses stands on investing in properties.'

McDonald's business, for example, is not about selling hamburgers. They are actually using the cash generated from the business to finance the real estate which they occupy, he says.

This is because properties will appreciate through time, from as short as six months to as long as 20 years, he says.

An investor must thus possess the 'financial muscle' to wait out this period because of mortgage obligations.