I decided not to decouple and decided to invest overseas instead

Making sure they score the right goal for their property investment journey, Alex and Shimin decided against decoupling when the environment changed

Making sure they score the right goal

I first met Alex and Shimin in their relatively new condo of about a year old. This was after they had sold their HDB flat and upgraded to a private property. They are your typical Singaporean couple who had first gone on the BTO route and decided to exit their first property after achieving their MOP. The upgrade for them was necessary as their second boy had just come along and they were looking for more space to accommodate the bigger family. Moreover, they wanted to stay closer to Alex's alumni school so that both his sons could enroll into them when the time comes for primary school education.

During the conversations, Alex excitedly told me that they bought the new condo under a 99-1 structure, providing them an option and a low-cost way to decouple when they are ready to invest in another Singapore property. They didn't want to jump straight into a single ownership for this condo as they wanted to adopt a wait-and-see approach and at the same time, they were exploring the possibility of investing overseas as well. We took time to discuss the advantages of each option and they decided to stay on the sideline for a while more as they wanted to build up for savings to stay on the prudent side.

To decouple and buy another condo or stay put?

Decoupling and buying another property no longer makes sense for them

1.5 years later and recently, Alex asked for a catch up at his place as he was ready to venture into his next property investment. Sitting in the same living room with Alex and Shimin, I asked them what has changed for them in the last 1.5 years?

They managed to save up more money from their bonuses and regular savings and they felt more comfortable & prudent now to buy the next investment property. However, they have dropped the entire idea of decoupling and investing in another Singapore property. Alex said:

"Even with more savings today, the property that we could potentially buy here just got smaller and further away; it has become less desirable from our investment perspective. We couldn't catch up with the rising prices and felt constantly left behind and didn't want to risk buying at a high. Even if we decouple and save on ABSD, prices here are still ridiculously high and we are less convinced of the potential returns.

Alex and Shimin's investment plan has evolved over the past 1.5 years, as they have decided against decoupling when investing in their next property. Some of their other considerations against decoupling were:

1) They felt somehow unease to have one of them being the sole owner of their family home, while the other may have no sense of home ownership over time.

2) Instead of using one of their CPF balance to fund part of their next property purchase, they could have used it to pay down partially on the loan on their existing home, saving on high-interest costs at the moment.

3) Having already spent a substantial amount in buying their Singapore family home, they felt that to invest in another property here would be over-concentrating their resources in one economy. While they have much faith in the Singapore economy, they were hoping for some sort of diversification in their investment strategy.

Look beyond the Singapore market

The couple looks forward to diversifying their investment by buying multiple properties in New Zealand with more affordable price points and friendly tax policy

Over the 2 years, they have also looked at other overseas markets for comparison and found New Zealand to be their favorite spot. He has also been following up on the regular updates that I send to him and was ready to take the next steps. Alex said:

"Buying 1, 2, 3 or more properties in New Zealand with no stamp duty expenses was a huge bonus for us. That gave us something to look forward to, and the confidence to have the ability to build and scale our property portfolio in the long run. With the recent market correction going on in New Zealand, we see it as a great opportunity to enter as we go thru the next phase of market recovery and reap the capital appreciation."

With that, we went through the whole process of identifying for them a new build in New Zealand, while also taking into account their budget and investment objectives. While they are now awaiting the completion of their property, we are already discussing identifying the next one for them to enter. Despite the macro picture remains seemingly gloomy amid a higher interest rates environment, housing fundamentals remain largely intact that will continue to drive prices higher in the next cycle. Alex & Shimin is confident that staying invested throughout will reap them tremendous upside benefits in the long run.

Alex & Shimin is proud of their decision to invest in the New Zealand property market. They are happy that they took a chance and explored the overseas property market. They believe that they can build their wealth through property investment and that New Zealand offers them the opportunity to do so. Their experience shows that with research, patience, and a willingness to explore new avenues, anyone can invest in property, no matter where their background.

Should I Invest abroad, stay put or wait?

If you are reading this, you are probably wondering what your next best steps in your investment journey could be.

Perhaps you are also thinking of decoupling your current property? Will New Zealand market be a right fit for you and your family? Is this a good time to buy an overseas property, or should you wait and see?

Well, everyone’s situation is different. There is no one size fits all advice. What has worked for someone, may not necessarily work for you.

At Brickzwealth New Zealand, our aim is to bring clarity to your investment decisions with extensive on the ground experience for the overseas market.

Whether you are a first time property investor or a seasoned buyer with a portfolio, we are here to provide an honest and objective view to your investment journey.

We can help you by:

1) Providing Strategic property advice that best fit the outcome you desire
2) Identify & spot investment opportunities that align with your goals

Kick-start a conversation with us today. Invest differently. Inspire your future.

Ryan Quah
Founder
Brickzwealth New Zealand