Providend advises investors to diversify their portfolios beyond property, highlighting risks such as market volatility, policy changes, and rising financing costs, despite Singapore’s historical gains in real estate.
Providend has argued that property should not automatically be the largest holding in an investment portfolio, and the Singapore-based advisory firm’s case rests on diversification, liquidity and the changing shape of the local housing market. In a podcast discussion, Tan Chin Yu said many investors favour bricks and mortar because of familiarity and the appeal of tangible assets, but he also warned that property can expose owners to concentration risk, policy shifts and rising financing costs.
That caution sits alongside an important counterpoint: Singapore property has still produced solid long-term returns. Providend’s own figures show that between 1990 and 2025, annualised gains ranged from 4.6% for non-landed homes to 6.2% for HDB resale flats, broadly comparable with the MSCI All Country World Index in Singapore-dollar terms. But the firm also notes that an index is not the same as the return on a specific flat or house, because location, lease length, building quality, age and surrounding supply can push results well above or below the market average.
The firm’s broader warning is that leverage cuts both ways. A mortgage can magnify gains when prices rise, but it can also lock owners into payments when values and rents weaken. Providend points to the 2013-to-2017 downturn, when Singapore’s broad property index fell by about 12%, as an example of how debt, transaction costs and holding expenses can erode the headline return. Those costs include stamp duties, interest, taxes, maintenance, renovation and the practical burden of managing tenants and repairs.
There is also a demographic and policy argument. Providend says past housing gains were helped by rapid population growth, cheap credit and a looser regulatory environment, but that the next 35 years may look different because of low fertility, an ageing population, tighter borrowing rules, higher additional buyer’s stamp duty, new cooling measures and a growing pipeline of homes. In that context, the firm argues that a property-heavy balance sheet can leave investors asset-rich but cash-poor, especially as retirement approaches. Its conclusion is not that property has no place in a portfolio, but that it should usually be one part of a wider mix rather than the dominant bet.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
