Your search results

How Can Real Estate Investment Help You to Combat Inflation?

Posted by Jayson Ang on January 28, 2023

| 0

TLDR

When it comes to real estate investments in Singapore amidst rising inflation rates, consider strategies such as capitalizing on property price increases, adjusting rental rates, opting for fixed-rate mortgages, and investing in revenue-producing properties for retirement savings. Focus on properties with short-term leases, passable price increases to tenants, and those in desirable locations. With the current market conditions and potential future scenarios, it might be the right time to make a well-thought-out plunge into real estate investment.

Inflation rates have risen 2.5% to 3.5% this year, and bank loan rates surpassed HDB’s 2.6% rate. In light of these increasing figures, how can you use real estate to protect yourself against inflation?

Singapore’s core inflation has been on the upswing, with projections suggesting it will peak in the first quarter of 2023 – surpassing its previous forecast range of 2.5% to 3.5%. Meanwhile, supply chain disruptions, restrictive labour market conditions, and higher commodity prices have all contributed to a marked spike in consumer prices. It’s no wonder our wallets feel a bit lighter than usual – and it looks like they’ll stay that way for a while!

Are you worrying about inflation taking a toll on your finances? I’ve found a great solution: investing in real estate to counteract the rising costs of mortgage rates!

What Real Estate Inflation Hedging Strategies Can Benefit You?

The Rise Of Inflation Spurs A Rise In Property Prices

With raw material costs on the rise, property prices are bound to go up. Real estate and rental income have a tendency to remain steady even with inflation, and investors have the potential to reap greater rewards than the market when it comes to inflation.

Rising Inflation Has A Tendency To Push Up Rental Costs

It’s clear that as property prices rise, so does rent. Taking advantage of this, why not charge a higher rent on your property to make your monthly repayments more manageable and cover the cost of upkeep? Even better, if your rental costs exceed inflation, you’ll be earning a steady stream of passive income!

Your Mortgage Payments Will Decrease With Time

When it comes to buying a property, if you opt for a fixed-rate loan, the cost will be based on the property’s value at the time of purchase. On the other hand, if you decide to rent, your costs could rise with the value of the property, but you could save in the long run if you go for a fixed-interest mortgage, as inflation will take its toll.

Your Retirement Funds Can Be Safeguarded From The Adverse Consequences Of Inflation

In a few years, your retirement funds won’t be worth nearly as much as it is today due to inflation; hence, your purchasing power will be hindered. To protect your retirement savings from inflation, owning a revenue-producing property could be a helpful solution.

The Range Between The Bid And Breakeven Prices For New Launches Will Be Greater

As labour costs and raw material prices rise, the difference between the breakeven/launch price and the bidding price of new launches will widen significantly.

Property Values Are Often Seen To Rise In The Long-Run

Property prices in Singapore are expected to keep soaring as residential properties tend to appreciate over time due to population growth, land demand, infrastructure upgrades and other contributing factors. Many investors have identified real estate investments as an ideal way to protect themselves against inflation.

During Inflation, What Kind Of Real Estate Investment Should I Seek Out?

Properties With A Short-Term Lease

Rather than long-term property leases that could miss out on the rewards of inflation, short-term leases have the advantage of often resetting rental rates to prevailing market levels.

Property Owners Can Pass On Price Increases To Their Tenants

Investing in residential properties or any other asset that enables you to capitalize on rising rental rates during periods of inflation is a lucrative endeavour. Conversely, investing in a commercial space in a shopping mall could result in little reward if retailers opt to shut down shop.

Properties Highly Sought-After In Desirable Locations

Having tenants that bring in income, especially on a short-term lease, is essential; and properties located in desirable locations generally don’t have difficulty attracting interested tenants. Therefore, it’s critical to pay attention to the location and durability of your property. It’s a great idea to keep an eye out for the following:

Where upcoming MRT stations are being located
Future projects within an area
The government’s infrastructure plans

Is Now The Ideal Moment To Make A Plunge Into Real Estate Investment?

Due to inflation, those wishing to own a home may now be required to allocate more money for mortgage payments as some banks have raised their fixed-interest rates.

But, when you opt for a fixed-rate loan to purchase a home, it won’t be affected by inflation for the duration of the fixed-period. This could be quite beneficial for you, since you’ll be paying for the value of the home at the time of purchase rather than its potentially inflated cost.

Additionally, you may wish to research other mortgage loan options that feature fixed-interest rates that remain consistent.

Data.gov.sg has highlighted a significant increase in the private property market in the past 10 years, increasing from 53.6% in 2010 to 2020. With such a rise, investors can anticipate the value of their home investments to appreciate.

Even during the pandemic, the property market remained resilient, resulting in the government introducing stricter measures, such as higher ABSD rates, tighter TDSR ceilings and a decrease in the LTV limit for HDB loans.

Necessary steps must be taken to avoid the risk of a destabilising correction in the future. Consequently, borrowers should anticipate a rise in interest rates in the coming years. However, as a buyer, you reap the rewards of investing in a home right now, with many condo developments offering early bird discounts, allowing you to gain even more.

In the long run, investing in real estate is typically a safe bet despite inflation. The key is to select an income-producing property strategically, and be in a financial position to make this a long-term commitment. This could prove rewarding with rental and capital value growth, thereby strengthening your buying power until retirement.

Should You Buy, Sell or Wait?

If you’re reading this, you must be trying to figure out the best course of action right now: is it the right time to buy or sell?

It’s difficult to give an exact answer since everyone’s situation is unique and what works for one person may not necessarily work for you.

I can bring you a wealth of on-the-ground experience and a data-driven approach to provide clarity and direction. From beginners to experienced investors, our top-down, objective approach will help you on your real estate journey.

I can help you by:

Offering Strategic Real Estate Advice – I can help create a comprehensive plan to guide you through your property journey.
Connecting Your Home with the Perfect Buyers – Through stunning visuals, an effective communication strategy, and an in-depth knowledge of the market, we’ll ensure your home is presented in the best possible way to fulfill your goals.

You May Also Like …

All Buying Tips Opinion Selling Tips

Singapore’s Property Jungle: A Guide to Every Development Type

Jayson Ang – October 12, 2025 –

TLDR Singapore’s real estate market features a diverse mix of property types—public HDB flats, executive condominiums, private condos, landed homes...

Mandarin Top 5

Exploring Singapore: The Top 5 Surprising Facts You Never Knew

Jayson Ang – March 13, 2025 –

Singapore, a city-state in Southeast Asia, is known for its rich cultural heritage, diverse population, and vibrant food scene. This...

All Blog Posts Selling Tips

Thinking of Selling Your Home in 2024? 5 Vital Realities Every Seller Must Face

Jayson Ang – November 27, 2024 –

TLDR From 2022 to 2024, Singapore's housing market underwent significant changes, with a shift from scarcity to a boom in...

All Buying Tips Opinion

Debunked! 6 Popular Property Myths of 2023, Including the 99-1 Loophole – Legal or Not?

Jayson Ang – January 4, 2024 –

TLDR This blog post delves into various aspects of the Singapore property market, including topics such as decoupling, 99-1 property...

All Buying Tips

Buying a Mega Development Condo? Here are 5 Overlooked Issues You Should Know

Jayson Ang – April 20, 2024 –

TLDR In the world of mega-developments, living in a large condo with over 700 units can bring challenges like ongoing...

All Buying Tips Opinion

How En-Bloc Sales of Condominiums Turned into a Speculative Exit Strategy in Singapore

Jayson Ang – August 2, 2025 –

TLDR En-bloc sales—where owners collectively sell an entire property for redevelopment—have become a key feature of Singapore’s private property market,...

Mandarin Top 5

Top 5 Factors : Why Now Is the Perfect Time to Invest in Singapore’s Real Estate Market – Insider Analysis!

Jayson Ang – March 15, 2025 –

Singapore's real estate market has always been an attractive investment destination for both local and international investors. The city-state's stable...

All Opinion

What Might Occur If We Ease Property Cooling Measures?

Jayson Ang – July 21, 2025 –

TLDR To assess if Singapore’s property cooling measures are working, compare our actions with China, which is applying the opposite...

All Blog Posts

SP Utilities Guide – Quick Guide To Setting Up Utilities In Singapore For Your New Home

Jayson Ang – April 16, 2023 –

TLDR Setting up utilities in Singapore for a new home is hassle-free. Contact SP Services for electricity and water accounts,...

All Blog Posts Opinion

Unlock the Potential of Your Home: 5 Reasons to Start Selling Now

Jayson Ang – June 6, 2023 –

TLDR When considering selling your home, several key indicators can help you determine if it's the right time to make...

All Opinion Selling Tips

Punggol Northshore HDB Flats Reaching MOP: Navigating the Resale Window

Jayson Ang – January 26, 2026 –

TLDR In 2025, around 1,765 HDB flats from Northshore Residences I & II and Northshore StraitsView in Punggol’s Northshore will...

Mandarin Top 5

Top 5 Tips for First-Time Chinese Buyers Looking to Invest in Singapore Today

Jayson Ang – May 31, 2023 –

Top 5 Tips for First-Time Chinese Buyers Looking to Invest in Singapore Today Here are the top 5 tips for...

Mandarin Top 5

Top 5 Rules for Investing in Singapore’s Property Market – Expert Insights!

Jayson Ang – October 15, 2024 –

Investing in Singapore's property market has long been considered a lucrative and stable investment option. With its robust economy, strong...

All Buying Tips Opinion Selling Tips

Timing the Market: Lessons from Singapore’s Property Price Fluctuations

Jayson Ang – December 18, 2025 –

TLDR Singapore’s property market has seen price declines during major crises such as the 1985-1989 pre-recession, 1996-1998 Asian Financial Crisis,...