Stocks vs Property - Singapore

[i4value]

If you invest in the stock market or residential properties in Singapore, you probably get about the same return of 3% each over a 20 year period (2002 to 2022). You can see from the chart below that the growth of the Singapore stock exchange index (STI) and the residential price index is about the same from 2002 to 2022. But the STI has a larger drawdown  and is more volatile.



In the Malaysian scene for the same period, the residential price index gained 5% CAGR compared to the KLCI gain of 4 % CAGR. If you want to know more about the Malaysian scene, go to In Malaysia, which has better returns; Stock market or Property?

[Bibi]

if one look at 10 year period, then i believe Spore properties beat its stock market STI hands down.

Even if they are on par based on 20 year period, i think properties still fare far better because of its leverage. A 3% increase on a $1mil property ($100k downpayment cash) is far better than a 3% increase on $100k invested in stocks.

[i4value]

I think we have to be careful when looking at data. If we are comparing apple-to-apple, then we saying that if a person has X dollars and want to invest in either the STI or an index of the Singapore residential properties, there is not much difference between them over a 20 years period.

We should not extrapolate the charts to specific stocks or houses as this will then depend on stock-picking or property investment skills. Along the same line, if you are going to say that you can get financing for property, then you have to look at the selling price 20 years down the road less all the monies you have paid (including principal and interests to the bank) to get the gain.