View Full Version : Leasehold versus Freehold - the Comparison Continues (2016)
Decided to start a new thread for discussion.
It's been cooked many times but we may have fresh perspectives after experiencing 3 years of cooling.
Which situations would FH (and 999 LH) warrant the price premium?
Which situations would LH99 (or LH60) be better bets?
This 99 LeaseHold finally reflect Market valuation.
http://business.asiaone.com/property/news/will-million-dollar-hdb-flats-be-the-new-norm
Today, every HDB flat has an open market value which its owner can realise after staying in the flat for a minimum period. The values of HDB flats today reflect Singapore's growth and prosperity since the 1970s.
However, in 2006, when the rapid population growth far exceeded supply and resale prices soared, both build-to-order (BTO) and resale prices raised the ire of Singaporeans, especially as resale prices surged more than 94 per cent in just a few years.
People have been alarmed at the dramatic rise in public housing costs - particularly with reports of million-dollar resale flats surfacing. This has caused many to wonder if HDB flats will remain affordable for future generations.
Here are some examples of million-dollar resale flats in Singapore:
The first HDB flat to hit this dizzying price level was an executive apartment at Block 149 Mei Ling Street in Queenstown. The unit was sold for S$1 million in 2012 with a cash-over-valuation (COV) of S$195,000. On a high floor, the 1,615 square foot (sq ft) unit offers unblocked views of Queenstown stadium and is close to supermarkets and food centres.
A 1,615-sq-ft executive maisonette near Bishan MRT station was sold for S$1.05 million at the end of 2013, translating to a COV of S$250,000. The unit is on the 20th floor of Block 190 at Bishan Street 13.
In Oct 2014, a similar-sized executive maisonette also in Bishan Street 13 changed hands for nearly S$1.09 million. The 27-year-old two-storey unit is located at Block 194 near a 24-hour food centre and Junction 8 shopping centre.
More recently in March this year, a top-floor unit at City View @ Boon Keng, a Design, Build and Sell Scheme (DBSS) development, was sold for S$1.028 million. On the 40th floor, the unit has higher ceilings in the balcony and living room, compared with units on the lower floors, and offers an unblocked vantage view and a spacious layout of 1,281 sq ft.
Market forces in play
It is good to know that compared to BTO flats, HDB resale prices are primarily determined by market forces. The government cannot simply manipulate prices as there would be many repercussions. On the one hand, artificially lowering prices would benefit those who cannot afford a home; on the other, it will cause much displeasure among those who have recently bought a resale flat, or even the majority of HDB flat owners who are sitting on a tidy paper profit.
While the government has limited maneuverability in implementing policies to affect prices directly, several cooling measures were introduced to indirectly cool HDB resale prices. This includes the the Mortgage Servicing Ratio, Total Debt Servicing Ratio and the removal of COVs.
Meanwhile, with the evolution of the resale market, buyers' tastes have changed and flats are now also valued differently - depending on factors such as location, view, and design. Now, buyers are more willing to pay more for a top-floor flat commanding the best view, compared to a lower-floor unit facing the bin centre.
Appeal of million-dollar flats Buyers will always be willing to fork out huge amounts for homes located in "hot areas" such as Bishan, Toa Payoh, Queenstown and Clementi. The fact that fewer new flats are being launched in these mature estates definitely also helps boost their appeal.
The Bishan maisonettes, for example, are a type of flats that was constructed in the 1980s, and construction of these flat types has stopped with the launch of executive condominiums (ECs) in 1995. Maisonettes are different from most regular flats, having a large floor space of around 150 square metres. Such homes usually command a premium. Pinnacle@Duxton - a famous producer of million-dollar flats - is also not a typical HDB development either. Its location in Tanjong Pagar is not something most flats are blessed with.
One possible way to explain the million-dollar HDB flat trend could be that condo and EC sizes have shrunk. Some extended families need the larger space to have a more comfortable living environment and so they have had no choice but to purchase a HDB unit with the right size, even if they can buy a similar-priced condo with a smaller area. Such million-dollar flats are not many, and even if they are transacted, they do not fully represent the market as they form just a minority of HDB resale deals.
There is no reason to be alarmed because it is uncommon for people to pay such high prices for a HDB resale flat. And with the numerous cooling measures in place, it is even rarer that a buyer can afford to pay such a large quantum for a HDB flat.
What type of property in Singapore should you buy
Buying property is a long term investment. When you're thinking of diving into real estate investment, it's better gather as much information on it as possible.Just like in any part of the world, having a private property is a good decision as there are many benefits. For instance, the property cycle in Singapore over the last years indicates that there is a steady rise in real estate's value. Alternatively, real estate investment can be a source of passive income. You can purchase a property and rent it out. When it comes to investing in real estate, you should ask whether there is easy access to MRT stations, schools, and other essential facilities; the property can be easily resold; and affordability.What are the costs involved in buying a property in Singapore? First, you have to check your stamp duty rate. Based on the market value of the property, you can compute for your Buyer's Stamp Duty (BSD).
Differing value of flats
Today, we have built a unique public housing system that is based on home ownership. It offers Singaporeans not only shelter but also a store of value.
However, Singaporeans have to understand that there are always people who are prepared to pay more for a flat's inherent value - good location, high floor, proximity to good schools, and so on. And these flats usually command a premium that buyers are always willing to pay more for.
But flats with such qualities are few - and we should stop seeing these flats as an indicator of our public housing prices skyrocketing. They are not in fact "warning signs" of uncontrolled housing prices.
The writer is PropNex Realty CEO.
Decided to start a new thread for discussion.
It's been cooked many times but we may have fresh perspectives after experiencing 3 years of cooling.
Which situations would FH (and 999 LH) warrant the price premium?
Which situations would LH99 (or LH60) be better bets?
Be prepare for LH60 or less for Marina Bay Area.
Be prepare for LH60 or less for Marina Bay Area.
So HDB and downtown LH better or good enough.
How about private in the different regions CCR, RCR and OCR?
So HDB and downtown LH better or good enough.
How about private in the different regions CCR, RCR and OCR?
Depend on what the buyer buy the property for.
For Capital appreciation, now already history.
For the Long term, Capital appreciation now is the best time to buy CCR FH.
For self-stay who care, only the buyer care.
HDB and downtown LH is already at its peak.
They most likely going for 60 years LH then suddenly everything looks so cheap.
If people are buying property to burn their money, they can do anything with it!
Other than that, you should just remember about our discussion below about Raintree Gardens enbloc, and how you would have been short-changed for owning 99-years leasehold properties!
And yes, you should ignore what minority claimed because he is just making up a BUNCH of BULLSHITS and LIES! (and he has demonstrated to be a FINANCIAL IDIOT, and would you take financial planning and investment advice from a FINANCIAL IDIOT, or even believe what he claimed about financial matters - like on CPF Life having "BETROTH" and CPF Life buys insurance from insurance company?!) :devilish:
minority,
As usual, more nonsense and bullshit and lies about financial investment from you, a PROVEN FINANCIAL IDIOT, who claimed CPF Life has "BETROTH" and that CPF Life buys insurance from insurance company.......
So, what more except BULLSHIT and LIES can we expect from you??????????
Again, better to show what BUNCH of LIES and BULLSHIT you are sprouting with numbers (otherwise people may think I am making empty talk):
You claimed: "The 175-unit estate, known as Raintree Gardens, was launched for collective sale in September. The purchase price roughly works out to about S$1.89 million per unit."
Wow! Looks great, until we dived deeper into the details!
"The 201,405 sq ft plot, next to Kallang River and near Potong Pasir MRT station, has just over 70 years of lease left. It is zoned for residential use with a 2.8 plot ratio."
"UVD is looking to develop the 201,405 sq ft site to house about 750 units. Overall, it is paying about $797 per sq ft per plot ratio (psf ppr), including the premium paid to top up the lease to a fresh 99 years and for redevelopment of the site to a gross plot ratio of 2.8."
So, total costs of buying the Raintree Gardens land and topping up to 99-years land lease = S$797 * 201405 * 2.8 = S$449.45 Millions!
Now, we know that the 175 owners of Raintree Gardens were only paid a total of $334.2 million!
That means, if Raintree Gardens is a FH property instead of 99-years LH property with only 70 years land lease left, the owners will get additional = $449.45M - $334.2M = $115.25 Millions!
In other words, if Raintree Gardens is a FH property instead of 99-years LH property with only 70 years land lease left, the owners would have gotten average S$2.57 MILLIONS (instead of just S$1.90 Million)!
In other words, if Raintree Gardens is a FH property instead of 99-years LH property with only 70 years land lease left, the owners would have gotten about +34.48% (or +S$670k) MORE!
Wow! FACTs show that: Like that I better buy FH and get paid $2.57M or +34.48% MORE for enbloc than just $1.90M !
minority,
The above FACT just shows that 99-years LH property will keep dropping in value as their lease runs down to 0!!!
Raintree Gardens owners are lucky! They managed to sell NOW before the value of their property fall more as their land lease runs down! And the price fall will just accelerate the closer the land lease is to 99-years deadline!
minority,
FACT! Please talk FACT! Don't just BULLSHIT and LIE whatever way you LIKE!
Another key difference between LH and FH emerged from the Shunfu Ville Enbloc.
When a property reaches or exceeds 30 years old, especially for LH where the land starts to depreciate faster, enbloc becomes ever so much likelier. This is especially so for small sites that are pocket-friendly for developers. It's good if you are a buyer of a new or relatively new property (say below 15-20 years old) in avoiding SSD, but it is a risk if you are a buyer when the property is more than 25 years old.
FH property - in view of the owner's internal estimation of the value of land, and the slower/non depreciation of land, en bloc is much less likely even at 30 years old. The risk however, grows when it is 40 or 50 years old when maintenance costs might be much higher?
In UK, where manpower costs are much much higher than Singapore, there are many properties even >100 years old! They don't seem to have maintenance cost issues, what more in Singapore?
Furthermore, maintenance costs is only an issue for small estates, those much less than 100 units. So, in such case, NEVER EVER buy a property in SMALL ESTATE!
Actually, FACT is, when you enbloc, on the surface, you seem to get good money and save on some maintenance fees, but you can't even buy a similar property at the same location!
Many of these disputes and many dissenting owners on ENBLOC seem to centre around LH property estate whose lease are running down to less than 70 years old and many owners are anxious to quickly flip before they can't even find any buyers!
No wonder they are so anxious to sell when price and market sentiment is bad, like now!
Another key difference between LH and FH emerged from the Shunfu Ville Enbloc.
When a property reaches or exceeds 30 years old, especially for LH where the land starts to depreciate faster, enbloc becomes ever so much likelier. This is especially so for small sites that are pocket-friendly for developers. It's good if you are a buyer of a new or relatively new property (say below 15-20 years old) in avoiding SSD, but it is a risk if you are a buyer when the property is more than 25 years old.
FH property - in view of the owner's internal estimation of the value of land, and the slower/non depreciation of land, en bloc is much less likely even at 30 years old. The risk however, grows when it is 40 or 50 years old when maintenance costs might be much higher?
In UK, where manpower costs are much much higher than Singapore, there are many properties even >100 years old! They don't seem to have maintenance cost issues, what more in Singapore?
Furthermore, maintenance costs is only an issue for small estates, those much less than 100 units. So, in such case, NEVER EVER buy a property in SMALL ESTATE!
Actually, FACT is, when you enbloc, on the surface, you seem to get good money and save on some maintenance fees, but you can't even buy a similar property at the same location!
Many of these disputes and many dissenting owners on ENBLOC seem to centre around LH property estate whose lease are running down to less than 70 years old and many owners are anxious to quickly flip before they can't even find any buyers!
No wonder they are so anxious to sell when price and market sentiment is bad, like now!
Singapore environment do not permit building more than 50 years old, the deterioration is very bad.
Do not permit? Is there such thing?
If do not permit, government should sell HDB flats and land with 50 years lease, not 99 years.........
Deterioration is bad? That is an issue of maintenance (and not because of being old)......
Ardmore Park is already passed 20 years old, but it's transacted price is even higher than the other condos nearby - Reason?
Very simple, it is MUCH OLDER, but it was built with MUCH HIGHER QUALITY, and MUCH BETTER MAINTAINED!
If people want to pay CHEAP and LOW Maintenance fund (like those living in Mass Market Condos), there is no way you can keep the estate well maintained!
Just like CIRCLE Line MRT only a few years already keep having breakdown problem.... NEW doesn't mean no problem........
Singapore environment do not permit building more than 50 years old, the deterioration is very bad.
Freehold property has the poorest rental yield when compare to leasehold. If u are hoping for developer enbloc your condo it is still very long way maybe 40years. 40yrs is such a long time. During this time u r earning low yield. Not a smart choice for investment. Most freehold r far from Mrt.
When buying most important is affordability so u can meet monthly payment without stress. Buy what is affordable.
Below link r the disadvantages of freehold:
http://blog.moneysmart.sg/property/freehold-property-why-its-not-as-great-as-it-seems/
Lower yield because of slightly higher price, but you get to prevent asset depreciation because of your 99-years land lease running down (since once less than 70 years, there will be very few buyers)......
Is it any wonder why all those 99-years LH property owners are trying to quickly flip to others when their property is past 20 years old;
and other owners trying desperately to en-bloc their estate quickest possible when approaching 30 years old, even when market sentiment and hence price is bad, like now?! :highly_amused:
Freehold property has the poorest rental yield when compare to leasehold. If u are hoping for developer enbloc your condo it is still very long way maybe 40years. 40yrs is such a long time. During this time u r earning low yield. Not a smart choice for investment. Most freehold r far from Mrt.
When buying most important is affordability so u can meet monthly payment without stress. Buy what is affordable.
Below link r the disadvantages of freehold:
http://blog.moneysmart.sg/property/freehold-property-why-its-not-as-great-as-it-seems/
LH next to mrt and amenities will be no different from FH in the first 20-25 years
Cheaper for own stay and higher yield for investment
Decided to start a new thread for discussion.
It's been cooked many times but we may have fresh perspectives after experiencing 3 years of cooling.
Which situations would FH (and 999 LH) warrant the price premium?
Which situations would LH99 (or LH60) be better bets?
Higher yield???
Cheaper for own stay???
No true lah!
You can only collect rents for 99 years for 99-years LH property,
vs collect rental FOREVER for Freehold property,
so if you compute over long-term, which has much higher cash flow and hence MUCH HIGHER GAIN (considering MUCH HIGHER cash flow and property asset value will not drop to ZERO at end of 99 years)?
Simple math only lah, why people don't understand it can only be FH property?!
On the surface, 99-years LH property has higher yield and cheaper for own stay,
but in reality people are worst off over long-term..........
The only reason to buy 99-years LH property is because they can't afford Freehold (at same locality), that is all (and hence have to bear with lower cash flow and asset depreciation drop to ZERO over long term)..........
LH next to mrt and amenities will be no different from FH in the first 20-25 years
Cheaper for own stay and higher yield for investment
Agree with you
But if horizon is just over 20 years, that is sell,
yield is higher
Higher yield???
Cheaper for own stay???
No true lah!
You can only collect rents for 99 years for 99-years LH property,
vs collect rental FOREVER for Freehold property,
so if you compute over long-term, which has much higher cash flow and hence MUCH HIGHER GAIN (considering MUCH HIGHER cash flow and property asset value will not drop to ZERO at end of 99 years)?
Simple math only lah, why people don't understand it can only be FH property?!
On the surface, 99-years LH property has higher yield and cheaper for own stay,
but in reality people are worst off over long-term..........
The only reason to buy 99-years LH property is because they can't afford Freehold (at same locality), that is all (and hence have to bear with lower cash flow and asset depreciation drop to ZERO over long term)..........
ccreporter
15-10-16, 09:22
Even fh can get rental 'forever', the rental income will need to discounted into present value. I have not really calculated it, so cant comment which one has better return.
ccreporter
15-10-16, 09:24
I was wondering. If i am a person looking for rental income.
Shall i go for a fh or use the money to buy 2 small lh.
Beside cost, 2 small lh can probably diverse the risk caused by location, fire, bad tenant.. ..
I was wondering. If i am a person looking for rental income.
Shall i go for a fh or use the money to buy 2 small lh.
Beside cost, 2 small lh can probably diverse the risk caused by location, fire, bad tenant.. ..
But it also entails double the work to manage two tenants. Quite a hassle if too many.
It is the lower risk method somewhat, but the taxes paid are also higher if these are your first 1-2 properties.
Your scenario cannot be considered as well thought of and can't possibly be realistic, because 1 FH cannot buy 2 LH (as of now, though it may become possible in future).....
I was wondering. If i am a person looking for rental income.
Shall i go for a fh or use the money to buy 2 small lh.
Beside cost, 2 small lh can probably diverse the risk caused by location, fire, bad tenant.. ..
Your scenario cannot be considered as well thought of and can't possibly be realistic, because 1 FH cannot buy 2 LH (as of now, though it may become possible in future).....
It has been a reality for some time if he meant CCR FH with OCR LH.
Well, novice property investors will need to go another recession then they will learn that during bad recession, they will have no tenants in OCR (regardless of OCR FH or LH) at a sustainable rent (that can cover their mortgage instalment and all other costs)...........
It has been a reality for some time if he meant CCR FH with OCR LH.
Cost recovery for the OCR MMs is 1,500 thereabout if one can buy below 500K. Cost recovery for CCR FH MM also minimum 3k I think. It's a fair asituation.
Well, novice property investors will need to go another recession then they will learn that during bad recession, they will have no tenants in OCR (regardless of OCR FH or LH) at a sustainable rent (that can cover their mortgage instalment and all other costs)...........
When there is NO TENANT, you can consider your cost recovery to be ZERO, and basically what matters is how long you can last without rental income (and I doubt there are a large number who can last like from 1998-2005 without tenant or even half of the time)..... :pirate:
The past 1 year of even OCR MMs being forced sold at rock bottom price already tells us what we know.......
Cost recovery for the OCR MMs is 1,500 thereabout if one can buy below 500K. Cost recovery for CCR FH MM also minimum 3k I think. It's a fair asituation.
When there is NO TENANT, you can consider your cost recovery to be ZERO, and basically what matters is how long you can last without rental income (and I doubt there are a large number who can last like from 1998-2005 without tenant or even half of the time)..... :pirate:
The past 1 year of even OCR MMs being forced sold at rock bottom price already tells us what we know.......
There is already a tenant, it whether you want to rent or not and at what rental.
http://www.straitstimes.com/singapore/50-workers-found-crammed-into-two-condo-units
https://sharonanngoh.com/2009/08/01/are-residents-allowed-to-rent-to-foreign-workers/
PRIVATE apartments cannot be used as workers’ dormitories. However, to be classified as a dormitory, a unit needs to accommodate more than eight workers. So it is perfectly legal for a private apartment owner to rent to foreign workers, as long as there are no more than eight of them.
The management corporation, says Mr Chan Kok Hong, managing director of CKH Strata Management, cannot restrict owners from doing this.
But Mr Teo Poh Siang, who runs estate management firm Wisely 98, says: ‘Units rented to foreign workers are usually very badly maintained and overcrowding is a prevailing issue.’
Common property may be damaged as a result. ‘The value of the property may be affected if foreign workers occupy more and more units,’ he says.
A recent case involving the illegal partitioning of apartments at The Grangeford condo in Leonie Hill has raised questions about this contentious issue. The estate was sold en bloc in 2007, but leased out by its buyer to a company called Ideal Accommodation. The master tenant illegally partitioned the 140 apartments into 600 smaller units to earn more rent from tenants, who included expatriates, local professionals and students.
The authorities are clear on this, however, and draw the line at partitions put up for commercial purposes in condos. Ideal has been told to remove its partitions.
After you rent your unit to foreign workers, not only that your unit cannot find buyer in future, your estate's other units difficult to find buyers, and your selling price and rent will go down the drain.........
Short-term gain will be followed by long-term pain........
There is already a tenant, it whether you want to rent or not and at what rental.
http://www.straitstimes.com/singapore/50-workers-found-crammed-into-two-condo-units
https://sharonanngoh.com/2009/08/01/are-residents-allowed-to-rent-to-foreign-workers/
PRIVATE apartments cannot be used as workers’ dormitories. However, to be classified as a dormitory, a unit needs to accommodate more than eight workers. So it is perfectly legal for a private apartment owner to rent to foreign workers, as long as there are no more than eight of them.
The management corporation, says Mr Chan Kok Hong, managing director of CKH Strata Management, cannot restrict owners from doing this.
But Mr Teo Poh Siang, who runs estate management firm Wisely 98, says: ‘Units rented to foreign workers are usually very badly maintained and overcrowding is a prevailing issue.’
Common property may be damaged as a result. ‘The value of the property may be affected if foreign workers occupy more and more units,’ he says.
A recent case involving the illegal partitioning of apartments at The Grangeford condo in Leonie Hill has raised questions about this contentious issue. The estate was sold en bloc in 2007, but leased out by its buyer to a company called Ideal Accommodation. The master tenant illegally partitioned the 140 apartments into 600 smaller units to earn more rent from tenants, who included expatriates, local professionals and students.
The authorities are clear on this, however, and draw the line at partitions put up for commercial purposes in condos. Ideal has been told to remove its partitions.
Long term rent till mortgage serviced. After that renovate and retire.
What is the issue?
After you rent your unit to foreign workers, not only that your unit cannot find buyer in future, your estate's other units difficult to find buyers, and your selling price and rent will go down the drain.........
Short-term gain will be followed by long-term pain........
Long term rent till mortgage serviced. After that renovate and retire.
What is the issue?
But have to qualify to say that I don't recommend renting to that many. Rent to 3 or 4 persons per unit, what is the issue?
How much can you get from renting to 3 to 4 foreign workers per unit?
But have to qualify to say that I don't recommend renting to that many. Rent to 3 or 4 persons per unit, what is the issue?
How much can you get from renting to 3 to 4 foreign workers per unit?
Define foreign workers.
https://scontent-hkg3-1.xx.fbcdn.net/v/t1.0-9/13645185_10207880729749068_2707114384842676599_n.jpg?oh=0cb59253ea9c9be2b72026de65ec44c1&oe=58A771B5
The recent Central Imperial MM transaction of 470K highlights another potentially confounding issue in this debate.
FH value can grow better and faster only if there are no microlocation issues.
Maybe an equally priced, similarly sized 99LH at an equal macrolocation but no microlocation issues (say Kallang or something) in 2011 can outrun the FH with microlocation issues by now?
Any big data expert on this?
Don't need big data, rent collected must be higher or equal to mortgage loan servicing. Otherwise income must be able to top up the difference. Call saving.
Don't need big data, rent collected must be higher or equal to mortgage loan servicing. Otherwise income must be able to top up the difference. Call saving.
That is definitely true but applicable to both FH and LH.
The more interesting analysis is to compare them right now when market rentals are depressed.
Then if market goes worse check again. When and if market recovers we can compare one more time.
Then everyone has a better understanding of what it means to have FH versus LH.
sometimes i confuse on HDB valuation. People seem to believe the LH does not matter for HDB.
For example:
HDB at 53 Geylang Bahru, size 1259 sqft, built in 1974, sold for 635,000.
Private apartment Textile Centre, size 1163 sqft, TOP in 1970, sold for 700,000.
Both are 3 bedrooms, almost comparable size, but quantum wise is quite close.
sometimes i confuse on HDB valuation. People seem to believe the LH does not matter for HDB.
For example:
HDB at 53 Geylang Bahru, size 1259 sqft, built in 1974, sold for 635,000.
Private apartment Textile Centre, size 1163 sqft, TOP in 1970, sold for 700,000.
Both are 3 bedrooms, almost comparable size, but quantum wise is quite close.
700K single transaction may not be so accurate. Many around 800K. So actual valuation should be 750K.
Investment needs easier to convince to let go, but HDB near central are regarded as homes generally. That's my guess.
Anyway LH apartments at 45 year mark every few year affect the mortgage amount and TDSR a lot.
HDB valuation now is according to willing buyer and willing seller, it use to be under HDB controlled Valuation.
How people value the freehold property assuming looking for capital appreciation?
We know developer does not need to top up when en bloc FH, so should FH land value is comparable to recent GLS 99 LH around that area?
If assessing from underutilized GFA, then it does not matter FH or LH.
HDB valuation now is according to willing buyer and willing seller, it use to be under HDB controlled Valuation.
True but need to qualify for Loan quantum still.
How one values is different from how another values. And how the master landlord allows everyone to value the property is important as well.
How people value the freehold property assuming looking for capital appreciation?
We know developer does not need to top up when en bloc FH, so should FH land value is comparable to recent GLS 99 LH around that area?
If assessing from underutilized GFA, then it does not matter FH or LH.
This recent article provides some answers to my questions :).
https://zuuonline.sg/investment/real-estate/the-difference-between-a-leasehold-and-a-freehold-property-in-singapore/
How people value the freehold property assuming looking for capital appreciation?
We know developer does not need to top up when en bloc FH, so should FH land value is comparable to recent GLS 99 LH around that area?
If assessing from underutilized GFA, then it does not matter FH or LH.
sometimes i confuse on HDB valuation. People seem to believe the LH does not matter for HDB.
For example:
HDB at 53 Geylang Bahru, size 1259 sqft, built in 1974, sold for 635,000.
Private apartment Textile Centre, size 1163 sqft, TOP in 1970, sold for 700,000.
Both are 3 bedrooms, almost comparable size, but quantum wise is quite close.
This recent article provides some answers to my questions :).
https://zuuonline.sg/investment/real-estate/the-difference-between-a-leasehold-and-a-freehold-property-in-singapore/
Yah still in line with loan quantum and how much master landlord allows to value, But it's a good summary!
People always go for limited edition when they buy things. Just follow the same principle.
Yah still in line with loan quantum and how much master landlord allows to value, But it's a good summary!
every single development is somehow unique :p ?
People always go for limited edition when they buy things. Just follow the same principle.
You are not wrong. You should observe the general price trend of properties older than 20 years between FH and LH in the same vicinity.
every single development is somehow unique :p ?
every single development is somehow unique :p ?
He means, you think which is rarer and get that which is rarer if it's within budget and meets your needs equally.
But being new can also be rare.
New is rare?
Oh I can see that new developments now come with usable area that is only 80% or even less of the total floor area you paid for (like super big air-con ledge, planter areas, balconies etc), and with inferior furnishings, worksmanship, quality, 1 small swimming to serve 600+ or more units, also 1 tennis court or even NONE for the same 600+ units, 1 small gym etc..........
These attributes are also rare indeed compared to older condos!
He means, you think which is rarer and get that which is rarer if it's within budget and meets your needs equally.
But being new can also be rare.
Hehe relax.
Anyway new is a temporary thing. All condos age one day anyway
So marry an old lady as they all age someday. Honestly, if Vivian Chow I am perfectly fine with the rarity.
New is rare?
Oh I can see that new developments now come with usable area that is only 80% or even less of the total floor area you paid for (like super big air-con ledge, planter areas, balconies etc), and with inferior furnishings, worksmanship, quality, 1 small swimming to serve 600+ or more units, also 1 tennis court or even NONE for the same 600+ units, 1 small gym etc..........
These attributes are also rare indeed compared to older condos!
Vivian still look good even at 30 or 50.
Condo aged 20 years feel like in their mid age oready :p
Hehe relax.
Anyway new is a temporary thing. All condos age one day anyway
So marry an old lady as they all age someday. Honestly, if Vivian Chow I am perfectly fine with the rarity.
That is why you have to look at the "inherent beauty" (like Freehold or Leasehold) lol!
E.g. Leasehold at 50 years old, wow! VERY VERY FEW even want to buy!
Freehold at 50 years old, their market value is as good as relatively new leasehold.........
So simple many of the others here don't understand? (Or refuse to acknowledge otherwise they scared they will be unable to flip their leasehold aging "babies" since people understand and don't want to buy from them???)
And there are those who cite SLA saying 20 years old 99-years Leasehold property has value that is only 8% below Freehold?
Ha ha ha! Think think think!
99 Years leasehold, left 79 years, means value is only 79/99 = 80% of a NEW Leasehold nia! (and not comparable to Freehold)!
If they can, they will also want to tell you 50 years old 99-years Leasehold could have value that is only 10% below freehold (so that you all can just buy 99-years Leasehold since Gov don't want to sell you Freehold!)
Vivian still look good even at 30 or 50.
Condo aged 20 years feel like in their mid age oready :p
Please pay attention TB.
Both these examples show contrary to what you are saying.
In fact, future GLS will all be 99LH. Industrial shortened to 30yr LH but still have the same demand and price.
Even Hillford PC sold with 55 years left after TOP was fully sold out in 1 day.
sometimes i confuse on HDB valuation. People seem to believe the LH does not matter for HDB.
For example:
HDB at 53 Geylang Bahru, size 1259 sqft, built in 1974, sold for 635,000.
Private apartment Textile Centre, size 1163 sqft, TOP in 1970, sold for 700,000.
Both are 3 bedrooms, almost comparable size, but quantum wise is quite close.
That is why you have to look at the "inherent beauty" (like Freehold or Leasehold) lol!
E.g. Leasehold at 50 years old, wow! VERY VERY FEW even want to buy!
Freehold at 50 years old, their market value is as good as relatively new leasehold.........
So simple many of the others here don't understand? (Or refuse to acknowledge otherwise they scared they will be unable to flip their leasehold aging "babies" since people understand and don't want to buy from them???)
And there are those who cite SLA saying 20 years old 99-years Leasehold property has value that is only 8% below Freehold?
Ha ha ha! Think think think!
99 Years leasehold, left 79 years, means value is only 79/99 = 80% of a NEW Leasehold nia! (and not comparable to Freehold)!
If they can, they will also want to tell you 50 years old 99-years Leasehold could have value that is only 10% below freehold (so that you all can just buy 99-years Leasehold since Gov don't want to sell you Freehold!)
One's man meat is another poison
Both examples are 99-years leasehold properties, and as with all 99-years leasehold properties, at the end of their 99-years lease, their values will all GO TO ZEROoooooooooooooo.......... :smiley_simmons:
In fact, their values should actually be NEGATIVE because owners need to forked out money to engage contractors to tear down and clear the buildings and return just empty land to the government (and not with the expired buildings still standing on the land and just return to the government with the buildings on it)!
So, no contradiction about my comment at all! :drinking_coffee_ico
Please pay attention TB.
Both these examples show contrary to what you are saying.
In fact, future GLS will all be 99LH. Industrial shortened to 30yr LH but still have the same demand and price.
Even Hillford PC sold with 55 years left after TOP was fully sold out in 1 day.
Sg cars also 10 year lease but even left 1 year leasehold is worth something.
Get it?
Both examples are 99-years leasehold properties, and as with all 99-years leasehold properties, at the end of their 99-years lease, their values will all GO TO ZEROoooooooooooooo.......... :smiley_simmons:
In fact, their values should actually be NEGATIVE because owners need to forked out money to engage contractors to tear down and clear the buildings and return just empty land to the government (and not with the expired buildings still standing on the land and just return to the government with the buildings on it)!
So, no contradiction about my comment at all! :drinking_coffee_ico
As you said "Cars" wah, can 't see how cars can be compared to properties??? :tongue3:
Do you have 99-years leasehold cars?
Can you buy a car at $500,000 and sell at $1,000,000 10 years later? :scared-2:
Sg cars also 10 year lease but even left 1 year leasehold is worth something.
Get it?
As you said "Cars" wah, can 't see how cars can be compared to properties??? :tongue3:
Do you have 99-years leasehold cars?
Can you buy a car at $500,000 and sell at $1,000,000 10 years later? :scared-2:
For both yes. You have FH cars in Malaysia.
If you buy a car during 08 or 09 you will make a tidy profit if you sold 2 or 3 years later.
In both cases the focus is on the use of the car to generate income or values.
In 2017 or 2018 if you renew COE at 50k and in 2019 if COE goes to 100K, your car will be worth 80 to 90K.
Utility and replacement value bro. House left 1 year lease also can live in for 1 year or rent out for 1 year.
And it seems that you are ignorant that at the end of the 99-years lease, the owners have to forked out money to demolish the buildings before returning EMPTY land to the Government........
For both yes. You have FH cars in Malaysia.
If you buy a car during 08 or 09 you will make a tidy profit if you sold 2 or 3 years later.
In both cases the focus is on the use of the car to generate income or values.
In 2017 or 2018 if you renew COE at 50k and in 2019 if COE goes to 100K, your car will be worth 80 to 90K.
Utility and replacement value bro. House left 1 year lease also can live in for 1 year or rent out for 1 year.
And it seems that you are ignorant that at the end of the 99-years lease, the owners have to forked out money to demolish the buildings before returning EMPTY land to the Government........
OK then the last year of rent give to Govt.
How about having 2 years of lease left?
And it seems that you are ignorant that at the end of the 99-years lease, the owners have to forked out money to demolish the buildings before returning EMPTY land to the Government........
This is a very interesting comment. Has been a real case of this happening in Singapore before? If the owners refuse to demolish the building, is there legal recourse from the Govt against them?
While I dont disagree that this is the rule, I would really be very interested to see whether it has been enforced.
Amber Woods
08-12-16, 11:35
This is a very interesting comment. Has been a real case of this happening in Singapore before? If the owners refuse to demolish the building, is there legal recourse from the Govt against them?
While I dont disagree that this is the rule, I would really be very interested to see whether it has been enforced.
There is no precedent case before. What the government is likely to do is to give eviction order to recover the land with the building intact. When it is time to redevelop the land, the government will call for tender to sell the land which the developers will have to cost into their bids the cost of demolishing it.
There is no precedent case before. What the government is likely to do is to give eviction order to recover the land with the building intact. When it is time to redevelop the land, the government will call for tender to sell the land which the developers will have to cost into their bids the cost of demolishing it.
The fact that there is no precedent tells you how likely this is going to happen.
Anyway, I doubt the costs will be high.
http://www.cvconslt.com/list_of_demolition_project.htm
If I were a developer, I will surely buy up any leasehold left with less than ten years if the price is reasonable. Very unlikely until last year still nobody wants to buy haha...
Authority will price it to the prevailing market rate then in that area and reset the tenure to 99 or less (people cannot afford 99 year lease then as $psf will be higher), and sell it. Do you think it will be lower rate than today with all the printing of money?
The fact that there is no precedent tells you how likely this is going to happen.
Anyway, I doubt the costs will be high.
http://www.cvconslt.com/list_of_demolition_project.htm
If I were a developer, I will surely buy up any leasehold left with less than ten years if the price is reasonable. Very unlikely until last year still nobody wants to buy haha...
Authority will price it to the prevailing market rate then in that area and reset the tenure to 99 or less (people cannot afford 99 year lease then as $psf will be higher), and sell it. Do you think it will be lower rate than today with all the printing of money?
I suspect the market will have only properties with 60 year leases by then. But TB says worthless wor...
Given the govt's obsession with urban renewal, I doubt they will let any building go beyond 30-40 years unless there's a strong case for conservation. They can exercise their right to acquire old derelict buildings by compensating the owners market rates even if there are no developers to enbloc it. Just put it back into 'storage' then GLS it again when times are better.
I can't really see a LH condo here in Singapore literally living out it's entire 99 year lease.
gentlemanofleisure
08-12-16, 14:17
There is at least one 99 LH in River Valley area that's already 30 years old.
Just have to study it's pricing.
Actually have a few if 30 years old.
Park West, West Bay... Several more lah.
Any one that is more than 50 or 60 years old will be more relevant?
There are some industrial 30 LH already or near expired, should the action taken to be representative for residential 99 LH?
There are many LH reaching 40-50 yo soon, though most of them resided in prime area so likely will get en bloc one day.
will be interesting to see if same treatment is accorded to both public and private residential when the LH runs out.
will be interesting to see if same treatment is accorded to both public and private residential when the LH runs out.
It won't be exactly the same treatment. HDB serves public function and while lease may be shortened or space might be more compact, it is a necessary endeavour to undertake.
As for private, the growing costs of running such an old place plus steepening lease depreciation plus the value adjustment of the land by authorities will allow a price gap for developers to come in. One big reason why LHs always get enbloc after a certain number of years.
any test cases for LH condos yet, that is lease allowed to run out without en bloc?
if LH always get en bloc, then FH and LH not much of a difference
It won't be exactly the same treatment. HDB serves public function and while lease may be shortened or space might be more compact, it is a necessary endeavour to undertake.
As for private, the growing costs of running such an old place plus steepening lease depreciation plus the value adjustment of the land by authorities will allow a price gap for developers to come in. One big reason why LHs always get enbloc after a certain number of years.
any test cases for LH condos yet, that is lease allowed to run out without en bloc?
if LH always get en bloc, then FH and LH not much of a difference
That's why I said earlier much also depends on how much master landlord allows to value.
So far LH condo always manage to en bloc before 99 years. Because of realistic view toward lease value. Never heard of HDB lease depleted also.
The only danger group is the 60 year lease like some Geylang landed, and maybe in future Hillford? Because owner valuation is always higher than what Developers are willing to pay.
Only heard of FH condo enbloc fail and fail and fail.
a gentle warning from minister to old HDB buyer. Do not assume gov have unlimited budget to do charity.
http://www.straitstimes.com/singapore/housing/dont-assume-all-old-hdb-flats-will-become-eligible-for-sers-warns-lawrence-wong
http://m.imgur.com/AWJqHAI?r
a gentle warning from minister to old HDB buyer. Do not assume gov have unlimited budget to do charity.
http://www.straitstimes.com/singapore/housing/dont-assume-all-old-hdb-flats-will-become-eligible-for-sers-warns-lawrence-wong
As promised - no resale value
http://m.imgur.com/AWJqHAI?r
How to figure out if an old HDB flat is worth its asking price (http://www.straitstimes.com/opinion/how-to-figure-out-if-an-old-hdb-flat-is-worth-its-asking-price?xtor=EREC-16-1[ST_Newsletter_AM]-20170408-[How+to+figure+out+if+an+old+HDB+flat+is+worth+its+asking+price]&xts=538291)
Chua Mui Hoong
Opinion Editor
Those looking to buy old resale Housing Board (HDB) flats would have cause for hesitation following comments by National Development Minister Lawrence Wong last month.
Perturbed by reports that Singaporeans were forking out big sums to buy old HDB flats, he said buyers should not assume that all old HDB flats will be eligible for the Selective En bloc Redevelopment Scheme (Sers).
.........................
Mr Wong's warning will put a halt to such expectations. As he pointed out, Sers is a highly selective programme. Only 4 per cent of HDB flats have been identified for Sers since it was launched in 1995.
.........................
Taken together, these mean that it is unrealistic to expect HDB flat prices to go up as they age. HDB flats will become "normal" assets with values that should reflect their balance leases.
Yet flat buyers' behaviour does not seem to reflect what we might expect from rational buyers.
A chart from DREA and HDB, published in The Straits Times on March 29, showed that the prices of low-floor flats in Geylang, Toa Payoh and Queenstown plateaued once the flats hit 30 years of age.
This is unusual, as you would expect prices of older flats to continue to decline, as they creep nearer the end of their 99-year lease.
............
As for buyers shopping for a resale flat now, I have a simple word of advice: Don't be seduced by the spacious layouts and convenient amenities of old resale flats into paying too much for them.
How do you know what is too much? You can try a simple formula. Many property transactions are already priced with a psf measure: price per square foot.
Add another indicator: number of years of lease remaining.
Take the example of a Bukit Timah flat of 1,345 sq ft that sold for $950,000, reported in The Straits Times recently. That is $706 psf.
That flat was built in 1974 on a 99-year lease. It thus has 56 years of lease remaining. The price psf on a per annum of balance lease basis is $12.60.
Is that a good price?
Valuers will say that a lease does not depreciate in a straight line. They are of course right. A property's value also depends on factors such as location and its condition. But the advantage of a simple, crude measure like psf per annum is that it allows for simple comparison.
You can use that measure to compare prices with 99-year condos in the vicinity, or with newer HDB flats. (Property portals like SRX and PropertyGuru can do all house hunters a favour and add this new indicator.)
At High Oak condo nearby, a 1,271 sq ft unit sold in December for $995,000 or $783 psf. With 78 years left, that's $10 psf pa.
Arguably, the condo is a better buy than the HDB flat, at a lower psfpa amount, and for a newer development that comes with facilities.
................
Aging 99-years leasehold properties with lease less than 70 years old........
If you own such properties, or even ever considering to buy such properties, WATCH OUT!
MND Minister Lawrence Wong is giving you warning!
ST Editor Ms Chua Mui Hoong is giving you warning!
What is the real PRICE of an aging 99-years leasehold properties, e.g. a 99-years leasehold private properties with say 70 years of lease left vs a 99-years one vs a freehold one?
Simple, you look at the Price $ PSF p.a. value lor!
E.g. a new 99-years leasehold properties is priced at $1500 psf.
So Price $ psf p.a. = 1500/99 = $15.15.
VS an aging 99-years leasehold properties with 70 years lease left is priced at $1200 psf.
So Price $ psf p.a. = 1200/70 = $17.14.
So, the 70 years leasehold property is more expensive than the 99-years leasehold property!
Now VS a freehold private property is priced at $1800 psf.
So Price $ psf p.a. = 1800/9999999999 = $0.000000001.
Wow! The freehold property is REAL CHEAP!!!!!!!!!!!!!!!!!
How to figure out if an old HDB flat is worth its asking price (http://www.straitstimes.com/opinion/how-to-figure-out-if-an-old-hdb-flat-is-worth-its-asking-price?xtor=EREC-16-1[ST_Newsletter_AM]-20170408-[How+to+figure+out+if+an+old+HDB+flat+is+worth+its+asking+price]&xts=538291)
Chua Mui Hoong
Opinion Editor
Those looking to buy old resale Housing Board (HDB) flats would have cause for hesitation following comments by National Development Minister Lawrence Wong last month.
Perturbed by reports that Singaporeans were forking out big sums to buy old HDB flats, he said buyers should not assume that all old HDB flats will be eligible for the Selective En bloc Redevelopment Scheme (Sers).
.........................
Mr Wong's warning will put a halt to such expectations. As he pointed out, Sers is a highly selective programme. Only 4 per cent of HDB flats have been identified for Sers since it was launched in 1995.
.........................
Taken together, these mean that it is unrealistic to expect HDB flat prices to go up as they age. HDB flats will become "normal" assets with values that should reflect their balance leases.
Yet flat buyers' behaviour does not seem to reflect what we might expect from rational buyers.
A chart from DREA and HDB, published in The Straits Times on March 29, showed that the prices of low-floor flats in Geylang, Toa Payoh and Queenstown plateaued once the flats hit 30 years of age.
This is unusual, as you would expect prices of older flats to continue to decline, as they creep nearer the end of their 99-year lease.
............
As for buyers shopping for a resale flat now, I have a simple word of advice: Don't be seduced by the spacious layouts and convenient amenities of old resale flats into paying too much for them.
How do you know what is too much? You can try a simple formula. Many property transactions are already priced with a psf measure: price per square foot.
Add another indicator: number of years of lease remaining.
Take the example of a Bukit Timah flat of 1,345 sq ft that sold for $950,000, reported in The Straits Times recently. That is $706 psf.
That flat was built in 1974 on a 99-year lease. It thus has 56 years of lease remaining. The price psf on a per annum of balance lease basis is $12.60.
Is that a good price?
Valuers will say that a lease does not depreciate in a straight line. They are of course right. A property's value also depends on factors such as location and its condition. But the advantage of a simple, crude measure like psf per annum is that it allows for simple comparison.
You can use that measure to compare prices with 99-year condos in the vicinity, or with newer HDB flats. (Property portals like SRX and PropertyGuru can do all house hunters a favour and add this new indicator.)
At High Oak condo nearby, a 1,271 sq ft unit sold in December for $995,000 or $783 psf. With 78 years left, that's $10 psf pa.
Arguably, the condo is a better buy than the HDB flat, at a lower psfpa amount, and for a newer development that comes with facilities.
................
Why like that, every time doesn't give the truth about HDB valuation.
Facts and figures will decide up or down.
Bought 5 room HDB in 1995 for 250,000. (SGD 225,600 + 10% levy)
Lease start 1 July 1997.
http://www.propertyguru.com.sg/singa...istings/sale/1
Now selling at SGD 650,000 Valuation Price: S$ 632,000.
Rental at SGD 2800.
http://www.propertyguru.com.sg/singa...istings/rent/1
2017 - 1997 = 20. lease balance 79 years
79 x 12 x 2800=SGD 2,654,400.
Don't know selling at the above price can drop by how much.
Oops, I forget to factor in inflation.
http://www.propertyguru.com.sg/listing/hdb-for-sale-27-balam-road-20603216
Selling S$ 650,000
Valuation price S$ 632,000
3 Bedrooms 2 Bathrooms
27 Balam Road, 370027 Geylang Estate
Type HDB Apartment For Sale
Size 1356 sqft
PSF S$ 479.35 psf
https://www.google.co.il/maps/place/27+Balam+Rd,+Block+27,+Singapore+370027/@1.3302742,103.8840652,17z/data=!3m1!4b1!4m5!3m4!1s0x31da178befc72dc1:0x1ce4b46bb45aa821!8m2!3d1.3303628!4d103.8862615
Service by two MRT Line. CC and DT line.
MacPherson MRT Station (CC10/DT26) is an underground Mass Rapid Transit station on the Circle Line and the future Downtown Line
Mattar MRT Station (DT25) is a future underground Mass Rapid Transit station on the Downtown Line
Look down on Landed property everyday.
https://sg1-cdn.pgimgs.com/listing/20603216/UPHO.86729172.V800/27-Balam-Road-Macpherson-Potong-Pasir-Singapore.jpg
Can see the tower on a fine day from the bedroom window.
http://www.singaporenbeyond.com/wp-content/uploads/2016/05/ayer-rajah-telephone-exchange-e1464334192256.png
Look down on Landed property everyday.
The view is so ugly! :scared-2:
And how many years of lease left?
http://www.propertyguru.com.sg/listing/hdb-for-sale-27-balam-road-20603216
Selling S$ 650,000
Valuation price S$ 632,000
3 Bedrooms 2 Bathrooms
27 Balam Road, 370027 Geylang Estate
Type HDB Apartment For Sale
Size 1356 sqft
PSF S$ 479.35 psf
https://www.google.co.il/maps/place/27+Balam+Rd,+Block+27,+Singapore+370027/@1.3302742,103.8840652,17z/data=!3m1!4b1!4m5!3m4!1s0x31da178befc72dc1:0x1ce4b46bb45aa821!8m2!3d1.3303628!4d103.8862615
Service by two MRT Line. CC and DT line.
MacPherson MRT Station (CC10/DT26) is an underground Mass Rapid Transit station on the Circle Line and the future Downtown Line
Mattar MRT Station (DT25) is a future underground Mass Rapid Transit station on the Downtown Line
Look down on Landed property everyday.
https://sg1-cdn.pgimgs.com/listing/20603216/UPHO.86729172.V800/27-Balam-Road-Macpherson-Potong-Pasir-Singapore.jpg
That is why you don't know how to count...., cannot give the truth about FREEHOLD property valuation...
If you buy a freehold property, say a 3BR in 1995 for $600k, lease = 999999999 years.
Monthly rental = $4500 pm.
Rental income = $4500 x 12 x 999999 years (vs 79 years only!) = MORE THAN $53.99 BILLIONS! :drinking_coffee_ico
Why like that, every time doesn't give the truth about HDB valuation.
Facts and figures will decide up or down.
Bought 5 room HDB in 1995 for 250,000. (SGD 225,600 + 10% levy)
Lease start 1 July 1997.
http://www.propertyguru.com.sg/singa...istings/sale/1
Now selling at SGD 650,000 Valuation Price: S$ 632,000.
Rental at SGD 2800.
http://www.propertyguru.com.sg/singa...istings/rent/1
2017 - 1997 = 20. lease balance 79 years
79 x 12 x 2800=SGD 2,654,400.
Don't know selling at the above price can drop by how much.
Oops, I forget to factor in inflation.
How to figure out if an old HDB flat is worth its asking price (http://www.straitstimes.com/opinion/how-to-figure-out-if-an-old-hdb-flat-is-worth-its-asking-price?xtor=EREC-16-1[ST_Newsletter_AM]-20170408-[How+to+figure+out+if+an+old+HDB+flat+is+worth+its+asking+price]&xts=538291)
Take the example of a Bukit Timah flat of 1,345 sq ft that sold for $950,000, reported in The Straits Times recently. That is $706 psf.
That flat was built in 1974 on a 99-year lease. It thus has 56 years of lease remaining. The price psf on a per annum of balance lease basis is $12.60.
Is that a good price?
Valuers will say that a lease does not depreciate in a straight line. They are of course right. A property's value also depends on factors such as location and its condition. But the advantage of a simple, crude measure like psf per annum is that it allows for simple comparison.
You can use that measure to compare prices with 99-year condos in the vicinity, or with newer HDB flats. (Property portals like SRX and PropertyGuru can do all house hunters a favour and add this new indicator.)
At High Oak condo nearby, a 1,271 sq ft unit sold in December for $995,000 or $783 psf. With 78 years left, that's $10 psf pa.
Arguably, the condo is a better buy than the HDB flat, at a lower psfpa amount, and for a newer development that comes with facilities.
................
I wonder if she had done her research :roll eyes: I'm surprised a PSC Cambridge Govt Scholar would write such a poorly researched article!
Base on the details (1345 sqf, 56 year left), it's Queens Rd Blk 1/2 Old Point Block. Why take High Oak as comparison? At least use D'Leedon.
http://www.propertyguru.com.sg/listing/20509495/for-sale-d-leedon-former-farrer-court-
Transacted prices for small 3-bedder are around $1,500 psf or $16 psf/ annum basis according to her crude measure. In this light, there is no argument which is more value for money.
Read my nick three times and you can understand her choice of property examples. The pent up demand situation is beyond imagination.
But dividing by the total number of years still only gives an indication. There are many factors to consider beyond size and lease.
Like TB pointed out, for her method of calculation, an OCR FH MM unit anywhere on the island is worth more (infinity) as a CCR 99LH giant bungalow. That simply cannot hold water. Common sense still has to prevail.
I wonder if she had done her research :roll eyes: I'm surprised a PSC Cambridge Govt Scholar would write such a poorly researched article!
Base on the details (1345 sqf, 56 year left), it's Queens Rd Blk 1/2 Old Point Block. Why take High Oak as comparison? At least use D'Leedon.
http://www.propertyguru.com.sg/listing/20509495/for-sale-d-leedon-former-farrer-court-
Transacted prices for small 3-bedder are around $1,500 psf or $16 psf/ annum basis according to her crude measure. In this light, there is no argument which is more value for money.
Reporter, I write what I want you to read.
Reader, I read what I want to know.
Don't Know, Don't want to know and refuse to know.
99 years leasehold HDB will be thing of the past soon, still waiting for durian to drop?
Now, the government and MND Minister Lawrence Wong has already said it clearly, please take heed:
Your 99-years leasehold property VALUE will become ZERO at the end of 99-years lease.
Obviously if over more than 99 years, an OCR FH MM unit is still more valuable than a CCR 99-years LH bungalow (which has a value of ZERO at the end of 99 years lease)........ :samurai-killa:
And for people who strongly embraces and advocate 99-years leasehold properties and claiming they have no differences from freehold properties, please note 1 thing: Their purpose is to FLIP their property to you before 20 years lease is over (so that you can and willing to take over their "babies", otherwise where to find buyers?!)
All the above is already COMMON SENSE enough.
If people still cannot come to their senses and acknowledge the above fact, they really is more stupid than a pig!
Read my nick three times and you can understand her choice of property examples. The pent up demand situation is beyond imagination.
But dividing by the total number of years still only gives an indication. There are many factors to consider beyond size and lease.
Like TB pointed out, for her method of calculation, an OCR FH MM unit anywhere on the island is worth more (infinity) as a CCR 99LH giant bungalow. That simply cannot hold water. Common sense still has to prevail.
Read the full news in this link............ (http://www.straitstimes.com/singapore/home-worries-surface-as-lease-expiry-looms)
People who buy leasehold properties will always have 1 BIG REGRET:
*** Not selling/flipping their leasehold properties when it is still young and can command good prices! ***
Home worries surface as lease expiry looms (http://www.straitstimes.com/singapore/home-worries-surface-as-lease-expiry-looms)
Mr Lim Kah Chin and his wife Teo Kim Guat, 66, are among the estimated 30 households - out of 190 private landed homes - still living in Geylang Lorong
Mr Lim now regrets not selling his unit some 10 years ago.
ST PHOTO: LAU FOOK KONG
PUBLISHED 4 HOURS AGO
Ng Jun Sen
From the age of 13, Madam P.C. Koh has lived at her terraced house in Geylang Lorong 3.
Now 70, she is facing the prospect of being homeless in less than three years' time.
That is when the 60-year lease of her property runs out. Come 2020, it will be returned to the state and its value will plummet to zero.
She said in disbelief: "My home is still standing. I don't understand how it can be worth nothing. Will I still have a home to live in?"
The short answer is no. In a statement, the Singapore Land Authority (SLA) reiterates the Government's stance: Its general policy is to recover land upon lease expiry.
The reality of an expiring lease is slowly seeping in for an estimated 30 households - out of 190 private landed homes - still living in the Geylang Lorong 3 estate.
This is especially after National Development Minister Lawrence Wong's recent cautionary note on buying older leasehold properties.
Although directed at owners of Housing Board flats, Mr Wong's comment was a stark reminder that all leasehold properties, whether public or private, will eventually go back to the state upon lease expiry.
..............................
As for Mr Lim, he now regrets not selling his unit around 10 years ago, when a unit was sold for around $200,000. He paid $35,000 for the two-storey terraced house in 1987. "I stayed on as I needed a roof over my head. This place was also where I met my wife, so I couldn't bear to move," he said.
Whatever sentimental reason he had for staying faded with the expiring lease. Neighbours who moved out were replaced by temple operators and foreign worker quarters, and the once-lively neighbourhood has lost its vibe. A rat problem has forced residents to build knee-high partitions at doorways to keep out the pests. "We will be lucky if there is any buyer at all, with only three years of lease remaining," said Mr Lim.
Reporter, I write what I want you to read.
Reader, I read what I want to know.
Don't Know, Don't want to know and refuse to know.
99 years leasehold HDB will be thing of the past soon, still waiting for durian to drop?
Read the full news in this link............ (http://www.straitstimes.com/singapore/home-worries-surface-as-lease-expiry-looms)
People who buy leasehold properties will always have 1 BIG REGRET:
*** Not selling/flipping their leasehold properties when it is still young and can command good prices! ***
Home worries surface as lease expiry looms (http://www.straitstimes.com/singapore/home-worries-surface-as-lease-expiry-looms)
Mr Lim Kah Chin and his wife Teo Kim Guat, 66, are among the estimated 30 households - out of 190 private landed homes - still living in Geylang Lorong
Mr Lim now regrets not selling his unit some 10 years ago.
ST PHOTO: LAU FOOK KONG
PUBLISHED 4 HOURS AGO
Ng Jun Sen
From the age of 13, Madam P.C. Koh has lived at her terraced house in Geylang Lorong 3.
Now 70, she is facing the prospect of being homeless in less than three years' time.
That is when the 60-year lease of her property runs out. Come 2020, it will be returned to the state and its value will plummet to zero.
She said in disbelief: "My home is still standing. I don't understand how it can be worth nothing. Will I still have a home to live in?"
The short answer is no. In a statement, the Singapore Land Authority (SLA) reiterates the Government's stance: Its general policy is to recover land upon lease expiry.
The reality of an expiring lease is slowly seeping in for an estimated 30 households - out of 190 private landed homes - still living in the Geylang Lorong 3 estate.
This is especially after National Development Minister Lawrence Wong's recent cautionary note on buying older leasehold properties.
Although directed at owners of Housing Board flats, Mr Wong's comment was a stark reminder that all leasehold properties, whether public or private, will eventually go back to the state upon lease expiry.
..............................
As for Mr Lim, he now regrets not selling his unit around 10 years ago, when a unit was sold for around $200,000. He paid $35,000 for the two-storey terraced house in 1987. "I stayed on as I needed a roof over my head. This place was also where I met my wife, so I couldn't bear to move," he said.
Whatever sentimental reason he had for staying faded with the expiring lease. Neighbours who moved out were replaced by temple operators and foreign worker quarters, and the once-lively neighbourhood has lost its vibe. A rat problem has forced residents to build knee-high partitions at doorways to keep out the pests. "We will be lucky if there is any buyer at all, with only three years of lease remaining," said Mr Lim. I think this is a wake up call for those who think there is little difference between leasehold and freehold.... there are a few freehold properties in Singapore and many are in the Bukit Timah area..... with tis news I don't tink I would want to sell my freehold condo...and for leasehold condo, if above 10 years I will sell! As for my hdb, as it involves garment policy and future plans, I don't tink I will do anything ...and most likely the next generation will see the money, ...just be happy and don't bother, anyway I didn't pay sky high price for it 😃
If you cleared the loan by 30 years lease, it will be fine with 69 years left. Want to buy good, well maintained LH property in decent location and low price also quite difficult to.
The problem with this landed property with 3 years lease left is, it began with 60 years lease as a replacement for some fire.
There may be some regulations behind enblocing landed property at this location too.
Landed property do not have sinking and maintenance funds and are much harder to gang together for en bloc as well. Maybe the article is about not getting LH landed at all?
I think this is a wake up call for those who think there is little difference between leasehold and freehold.... there are a few freehold properties in Singapore and many are in the Bukit Timah area..... with tis news I don't tink I would want to sell my freehold condo...and for leasehold condo, if above 10 years I will sell! As for my hdb, as it involves garment policy and future plans, I don't tink I will do anything ...and most likely the next generation will see the money, ...just be happy and don't bother, anyway I didn't pay sky high price for it 😃
This article, and the article by Chua Mui Hoong, and the warning from MND Minister Lawrence Wong, are all about 1 thing:
Buying leasehold properties with lease less than 70 years, because you will most lively outlive the lease of your leasehold properties and you will end up "HOMELESS" because the lease of your leasehold properties expired before you die! (and you have no money to buy another one since the one you own expire WORTHLESS!)
My conclusion from all these articles are that:
People who buy leasehold properties will always have 1 BIG REGRET:
*** Not selling/flipping their leasehold properties when it is still young and can command good prices! ***
If you cleared the loan by 30 years lease, it will be fine with 69 years left. Want to buy good, well maintained LH property in decent location and low price also quite difficult to.
The problem with this landed property with 3 years lease left is, it began with 60 years lease as a replacement for some fire.
There may be some regulations behind enblocing landed property at this location too.
Landed property do not have sinking and maintenance funds and are much harder to gang together for en bloc as well. Maybe the article is about not getting LH landed at all?
Not really true. Just ask Pearl Bank Apartment owners, still many possible steps to take. Also can increase density of build up based on revised plot ratios to negotiate.
HDBs and landed have lesser or no recourse for en bloc or SERS as developers have little to gain by selling subsidised housing or 3-4 storey landed for high quantum and lower profits, as compared to other strata models.
This article, and the article by Chua Mui Hoong, and the warning from MND Minister Lawrence Wong, are all about 1 thing:
Buying leasehold properties with lease less than 70 years, because you will most lively outlive the lease of your leasehold properties and you will end up "HOMELESS" because the lease of your leasehold properties expired before you die! (and you have no money to buy another one since the one you own expire WORTHLESS!)
My conclusion from all these articles are that:
People who buy leasehold properties will always have 1 BIG REGRET:
*** Not selling/flipping their leasehold properties when it is still young and can command good prices! ***
Waiting for MND to announce 60 years leasehold HDB and GLS soon.
Waiting for MND to announce 60 years leasehold HDB and GLS soon.
Waited 2-3 years already. I doubt it will happen until after next election at least.
think they will have shorter lease period for HDB flats in prime areas in future like Tanjong pagar (once the port moves) and kampong bugis
They were caught off guard when they launch the 60 years lease at The Hillford.
https://www.iproperty.com.sg/news/8141/The-Hillford-is-popular-among-young-investors-but-60-year-lease-may-pose-financing-hurdle-
Now they made sure they know what they doing with 60 years HDB.
I am sure, anyone who buys will give a damn about the lease.
https://www.youtube.com/watch?v=WnWKwg1VD38
https://www.youtube.com/watch?v=ewZw-WgiJV8#t=156.387174
When Ah Gong says, I want your land, it does not matter what kind of hold you have...
http://www.straitstimes.com/singapore/three-landed-properties-repossessed-by-sla-after-owners-fail-to-move-out-after-deadline
Ai yoh, you telling half-truths lah!
The way you phrase what you say is like you are saying Ah Gong can act like robber and he can take whoever's land he want without any justification???????? :scared-3:
You better cut and paste the full details instead of propagating such "half-truth" as though Ah Gong "act like robber" for no good reason............. :heart-borken:
And guess what?
Moral of the story is that you better don't buy landed properties!
When Ah Gong needs land for "National Development", they will always go around high-rise non-landed strata properties (because too many people to compensate and takes too long to resolve and have to compensate too much since under the amended law they MUST now compensate MARKET PRICE) and cut into landed-properties easier (because easier to acquire as fewer units to compensate, and less people to compensate and less properties and shorter time needed to take over)........
Just don't understand why people will resort to "half-truth" to continue their propaganda that "free hold" is no difference from "99-years leasehold"?!
When Ah Gong says, I want your land, it does not matter what kind of hold you have...
http://www.straitstimes.com/singapore/three-landed-properties-repossessed-by-sla-after-owners-fail-to-move-out-after-deadline
https://fb-s-a-a.akamaihd.net/h-ak-xfa1/v/t1.0-9/18118557_10210346157503221_2932129353569057087_n.jpg?oh=89e3f5430f9f6fabad9e9fa3bfdc7753&oe=599655E0&__gda__=1501968867_376b71fab170b794b3706aa8de634e7f
https://fb-s-c-a.akamaihd.net/h-ak-xfl1/v/t1.0-9/18157593_10210346182743852_6044743854469561286_n.jpg?oh=eec2cc270181c5c48f208e5259ee1872&oe=5985E689&__gda__=1502725286_f31761bb97e8ee1c9b482ac9e4fed7a9
SINGAPORE: Three freehold landed properties at Merpati Road were legally possessed by the Singapore Land Authority (SLA) on Tuesday (Apr 25), as part of the land acquisition process for the future Mattar MRT station on Downtown Line 3 (DTL3) and surrounding developments.
The owners of 27, 29 and 33 Merpati Road were served notice this morning by a team of SLA officers led by deputy chief executive Simon Ong, but none of them surrendered their keys to the authorities.
Their neighbours in 12 other landed houses along Merpati Road and Jalan Anggerak have already moved out by the Tuesday deadline.
Homeowners had been given close to seven years to move after the 15 properties were acquired by authorities in 2010 as part of redevelopment efforts around the Mattar MRT station.
The original deadline to hand over the acquired properties was the end of August 2015 but that was extended four times to Apr 25, 2017.
Channel NewsAsia understands that the three remaining homeowners were offered market compensation amounts ranging between S$1.7 and S$3 million, and that none of them contested the compensation offered. Compensation letters were given to the homeowners in July 2011.
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SLA said it also offered various assistance measures, including advance payment of 40 per cent of their compensation, priority balloting for HDB flats if eligible and a waiver of housing loan restrictions.
A resident of 29 Merpati Road, 60-year-old George Oh, declined to comment on the amount of compensation offered for the acquisition but said it was not enough. Mr Oh, who lives in the house with his two brothers, said his younger sibling works in the area as a mechanic and wanted a deadline extension due to the proximity to his workplace.
However, he said the family will move out once their new home is ready. "We already got our HDB flat through SLA help so we are still renovating and once it's done, we’ll move out gradually," said Mr Oh, adding that the house at Merpati Road was bought by his father in 1974.
Occupants of units 27 and 33 did not respond to SLA officers and the possession notices were placed in their mailbox.
An elderly resident of unit 27, who wanted to be known only as Mr Loh, later said he did not know that officers had come by. Speaking in Mandarin, he said his family - his son, daughter-in-law and daughter - would have no choice but to move as all his neighbours have done so.
An enforcement notice for the possession will be served on Wednesday and owners will have another 28 days to vacate. If they do not move out, authorities will apply for a court order to take over the properties, which could take three to six months.
Once all the properties have been handed over, road alignment and infrastructure works will start. These include the building of high-density residential developments which SLA said will allow more people to benefit from future rail infrastructure in the area.
Read more at http://www.channelnewsasia.com/news/singapore/sla-takes-legal-possession-of-3-landed-homes-on-merpati-road-8791026
Ah gong took my ancestors land what... 100K compensation now can easily sell for hundreds of million.
And now force the landed index to skydive then acquire so many pieces of land all around, FH or otherwise.
I'm not complaining actually - it's for a better Singapore eventually.
Ai yoh, you telling half-truths lah!
The way you phrase what you say is like you are saying Ah Gong can act like robber and he can take whoever's land he want without any justification???????? :scared-3:
You better cut and paste the full details instead of propagating such "half-truth" as though Ah Gong "act like robber" for no good reason............. :heart-borken:
And guess what?
Moral of the story is that you better don't buy landed properties!
When Ah Gong needs land for "National Development", they will always go around high-rise non-landed strata properties (because too many people to compensate and takes too long to resolve and have to compensate too much since under the amended law they MUST now compensate MARKET PRICE) and cut into landed-properties easier (because easier to acquire as fewer units to compensate, and less people to compensate and less properties and shorter time needed to take over)........
Just don't understand why people will resort to "half-truth" to continue their propaganda that "free hold" is no difference from "99-years leasehold"?!
peppertail
26-04-17, 00:58
When Ah Gong needs land for "National Development", they will always go around high-rise non-landed strata properties (because too many people to compensate and takes too long to resolve and have to compensate too much since under the amended law they MUST now compensate MARKET PRICE) and cut into landed-properties easier (because easier to acquire as fewer units to compensate, and less people to compensate and less properties and shorter time needed to take over)........
Just don't understand why people will resort to "half-truth" to continue their propaganda that "free hold" is no difference from "99-years leasehold"?!
Not true. If the land is needed for an essential public infrastructure project they will acquire it regardless of the title or type of housing. Rochor Centre is a good example.
Rochor road HDB flats and HDB shophouses?
Rochor road HDB flats they have no cheaper alternative, because if they re-route, it will hit Sim Lim Square or Sim Lim Tower and other commercial buildings around those stretch...... So acquiring those already very old Rochor HDB flats is CHEAPER.....
It is all about whether there is CHEAPER option.............
So HDB flats are CHEAPEST acquisition option, followed by landed properties being the NEXT CHEAPEST option available where each piece of land owned by 1 owner, compensation definitely cheaper than a piece of land vertically up 30 storeys have to compensate 30 owners.........
Also, they are now paying market rate isn't it?
Unless you are like Kelonguni trying to imply that they are like robber now robbing people of their land and paying significantly below market price?
Not true. If the land is needed for an essential public infrastructure project they will acquire it regardless of the title or type of housing. Rochor Centre is a good example.
I actually did not say they did not pay market rate.
But that Freehold does not always mean one can gain from the indefinite lease. If the Govt chooses to take over your place at a time when prices are depressed, your gains will still be capped and not far off from another Leasehold development, even if they paid the prevailing market rate.
The demand will be stronger if it was cheaper, just as you have said, and therefore LH in general will be cheaper than FH...
Rochor road HDB flats and HDB shophouses?
Rochor road HDB flats they have no cheaper alternative, because if they re-route, it will hit Sim Lim Square or Sim Lim Tower and other commercial buildings around those stretch...... So acquiring those already very old Rochor HDB flats is CHEAPER.....
It is all about whether there is CHEAPER option.............
So HDB flats are CHEAPEST acquisition option, followed by landed properties being the NEXT CHEAPEST option available where each piece of land owned by 1 owner, compensation definitely cheaper than a piece of land vertically up 30 storeys have to compensate 30 owners.........
Also, they are now paying market rate isn't it?
Unless you are like Kelonguni trying to imply that they are like robber now robbing people of their land and paying significantly below market price?
Now, since you agreed that Ah Gong are indeed paying market rate NOW, then they are NOT acting like robber right? If so, your statement that "Freehold does not always mean one can gain from the indefinite lease" will obviously be FALSE!
Why?
Very simple:
If NOW they are paying market rate, then it is clear that your freehold property will hold their value because the longer you hold, the more valuable it is (as it won't depreciate like 99-years leasehold properties), and FH owners will not be afraid that their properties and land will be robbed, because in the case their FH properties has been acquired by Ah Gong, they will pay you = $(FH market value) at that moment in time.
In comparison, if you own 99-years leasehold properties, and say Ah Gong now want to acquire your 99-years leasehold properties when your property is 60 years old, so, they will only pay you like (39/99)x$(FH market value) = (0.39)x$(FH market value)!
So, it is clear the longer the government waits to acquire your 99-years leasehold properties, the less you will be compensated even if at market rate!
If you go to the extreme, say Ah Gong acquire your 99-years leasehold property when your property is 98 years old, then Ah Gong only need to pay you (1/99)x$(FH market value) = (0.01)x$(FH market value)!
That is to say, if FH property beside your 98-years old LH property is valued at market price of $1M, then Ah Gong will only compensate $10k ! That is indeed hilarious indeed! :hopelessness:
As to your statement: "LH in general will be cheaper than FH.."
well, we all know that new 99-years LH is only like 10-20% cheaper than FH only currently, and many people are either IGNORANT or they are just wanting to FLIP their property quickly because once the 99-years LH property is like 50 years old, it is only worth 49% of the FH property, and when your LH property is 80 years old, it is only worth 19% of the FH property! . It is clear that the longer you hold your LH property, the poorer you will become! :topsy_turvy:
I actually did not say they did not pay market rate.
But that Freehold does not always mean one can gain from the indefinite lease. If the Govt chooses to take over your place at a time when prices are depressed, your gains will still be capped and not far off from another Leasehold development, even if they paid the prevailing market rate.
The demand will be stronger if it was cheaper, just as you have said, and therefore LH in general will be cheaper than FH...
Supposing it's 1 million (LH) versus 1.2 million (FH).
The 200,000 difference if compounded at 2.5% over 98 years becomes 2.3 million. Even 70 years (after loan repaid) also 1.15 million difference leh. What does it mean har?
Now, since you agreed that Ah Gong are indeed paying market rate NOW, then they are NOT acting like robber right? If so, your statement that "Freehold does not always mean one can gain from the indefinite lease" will obviously be FALSE!
Why?
Very simple:
If NOW they are paying market rate, then it is clear that your freehold property will hold their value because the longer you hold, the more valuable it is (as it won't depreciate like 99-years leasehold properties), and FH owners will not be afraid that their properties and land will be robbed, because in the case their FH properties has been acquired by Ah Gong, they will pay you = $(FH market value) at that moment in time.
In comparison, if you own 99-years leasehold properties, and say Ah Gong now want to acquire your 99-years leasehold properties when your property is 60 years old, so, they will only pay you like (39/99)x$(FH market value) = (0.39)x$(FH market value)!
So, it is clear the longer the government waits to acquire your 99-years leasehold properties, the less you will be compensated even if at market rate!
If you go to the extreme, say Ah Gong acquire your 99-years leasehold property when your property is 98 years old, then Ah Gong only need to pay you (1/99)x$(FH market value) = (0.01)x$(FH market value)!
That is to say, if FH property beside your 98-years old LH property is valued at market price of $1M, then Ah Gong will only compensate $10k ! That is indeed hilarious indeed! :hopelessness:
As to your statement: "LH in general will be cheaper than FH.."
well, we all know that new 99-years LH is only like 10-20% cheaper than FH only currently, and many people are either IGNORANT or they are just wanting to FLIP their property quickly because once the 99-years LH property is like 50 years old, it is only worth 49% of the FH property, and when your LH property is 80 years old, it is only worth 19% of the FH property! . It is clear that the longer you hold your LH property, the poorer you will become! :topsy_turvy:
Don't understand how you get $1.15M difference.
If indeed $200k compounded at 2.5% p.a. over 98 years is $2.3M,
then a freehold property worth $1.2M now compounded at say 5% p.a. over 98 years will become = S$143.1M !
You will definitely argue, why 5% p.a. for property price increase?
Obviously property, being an illiquid asset, it has to have higher return over the long-term to attract investors (vs your $200k money invested in liquid asset - If you like, you can use 5% compounded return for your $200k money saved!).
Meanwhile, your 99-years leasehold property at 98 years old is worth = S$0.01M !
Ok, you can say you saved $2.3M.
Even then, after 98 years, a FH owner excess earnings over a 99-year LH owner = S$143.1M - S$0.01M - S$2.3M = S$140.79M ! !!!!!!!!!!!! (WOW!)!!!!!!!!!!!!!!!!!!!!
Supposing it's 1 million (LH) versus 1.2 million (FH).
The 200,000 difference if compounded at 2.5% over 98 years becomes 2.3 million. Even 70 years (after loan repaid) also 1.15 million difference leh. What does it mean har?
Better still, my last few years investment record gains are over 10%.
Let's discount to 8%.
200k compounded 8% only for 98 years gives me... 377.2 million leh.
How much is your 100 year old flat worth again 98 years later?
Don't understand how you get $1.15M difference.
If indeed $200k compounded at 2.5% p.a. over 98 years is $2.3M,
then a freehold property worth $1.2M now compounded at say 5% p.a. over 98 years will become = S$143.1M !
You will definitely argue, why 5% p.a. for property price increase?
Obviously property, being an illiquid asset, it has to have higher return over the long-term to attract investors (vs your $200k money invested in liquid asset - If you like, you can use 5% compounded return for your $200k money saved!).
Meanwhile, your 99-years leasehold property at 98 years old is worth = S$0.01M !
Ok, you can say you saved $2.3M.
Even then, after 98 years, a FH owner excess earnings over a 99-year LH owner = S$143.1M - S$0.01M - S$2.3M = S$140.79M ! !!!!!!!!!!!! (WOW!)!!!!!!!!!!!!!!!!!!!!
Better still, my last few years investment record gains are over 10%.
Let's discount to 8%.
200k compounded 8% only for 98 years gives me... 377.2 million leh.
How much is your 100 year old flat worth again 98 years later?
i only login just to say you are amazing.
please le, work in temasek or gic :not-worthy:i want my cpf :) if you do, i thank you. i am sure other singaporeans will also thank you :)
no need minimum sum to be raise every year, and also can withdraw at 55.
btw, %-wise, approximately how much asset in real estate, and in the other "investment"?
I failed to see your logic!
You keep telling us 99-years leasehold properties are good investment, and keep wanting to buy more!
Yet property prices, even if freehold, will probably earn you 5% p.a. compounded over the long term!
On the other hand, your 99-years leasehold properties will become $ZERO at the end of 99-years old!
Since your investment returns are so good, why not just put all your $1M into investment and over 98 years compounded at 8% pa will become = $1,885.9M i.e. $1.88 BILLIONS !!!!!!!!!!!!!
Why so stupid use that $1M to buy 99-years LH propertiesand see it earn 5% pa in short term and then become $ZERO at the end of 99-years?
Your claims just doesn't tally and something must be amiss here?
Like may be you have say $10M net worth but you put $500k into investment and by luck earns 10% p.a. over a short term but the rest of your money like $9.5M put in savings account earning almost 0% interest and claiming "my last few years investment record gains are over 10%."????????
If your overall investment record gains (inclusive of all your net worth and capital) is so impressive as you claimed, like over 10% p.a. over the long term (which few people do), you are saying that you are even better than Temasek and GIC! :tongue3:
If with your that kind of calculation, I can also tell you that "my last few years investment record gains are over >30%!!!!!!!!". :doh:
Not bluffing! I ever had a stock that I sold at a profit of >500% over 3 years or >140% p.a. compounded! :onthego:
Better still, my last few years investment record gains are over 10%.
Let's discount to 8%.
200k compounded 8% only for 98 years gives me... 377.2 million leh.
How much is your 100 year old flat worth again 98 years later?
Haha, I am only kidding with Teddybear since he also based on property ridiculous 5% compounded growth over 98 years.
Even SG from third world till today, the average compounded gain is only 3.6%.
Don't take it so seriously yah?
i only login just to say you are amazing.
please le, work in temasek or gic :not-worthy:i want my cpf :) if you do, i thank you. i am sure other singaporeans will also thank you :)
no need minimum sum to be raise every year, and also can withdraw at 55.
btw, %-wise, approximately how much asset in real estate, and in the other "investment"?
LH balance 95 years
Price: $1m
Rental: $36,000 per year for 95 years with zero value at end of 99 years (assuming net rental)
FH
Price: $1.2m (say $0.2m higher than LH)
Rental: same at $36,000 per year forever (assuming net rental)
Is above a good comparison? Is TB the guru in this forum who has the answer which is a better investment? I see he posts everything.
Post everything yes he does.
But he admits to being a faulty clock right only twice a day, although I have shown that he is actually a clock with no hands.
His agenda is OCR crash, but can't differentiate for sure where is actually OCR.
LH balance 95 years
Price: $1m
Rental: $36,000 per year for 95 years with zero value at end of 99 years (assuming net rental)
FH
Price: $1.2m (say $0.2m higher than LH)
Rental: same at $36,000 per year forever (assuming net rental)
Is above a good comparison? Is TB the guru in this forum who has the answer which is a better investment? I see he posts everything.
OCR private property prices sure crash in near future!
Don't understand why people want to keep denying that it will not crash? (as though like forever it won't?)
Property prices always go in cycles (always peak and crash), and the last crash was in late 2008/early 2009, so it is likely to crash by or before 2022, but even more likely to be earlier than that....
Post everything yes he does.
But he admits to being a faulty clock right only twice a day, although I have shown that he is actually a clock with no hands.
His agenda is OCR crash, but can't differentiate for sure where is actually OCR.
That's what you said about 2017 or 2018. Now is 2022.
By the time the crash comes, my second property would have been fully paid up! Shiok!
OCR private property prices sure crash in near future!
Don't understand why people want to keep denying that it will not crash? (as though like forever it won't?)
Property prices always go in cycles (always peak and crash), and the last crash was in late 2008/early 2009, so it is likely to crash by or before 2022, but even more likely to be earlier than that....
Fully paid?
More like already FLIPPED out for a profit?
Cannot hold too long because will become $ZERO ultimately..... :onthego:
That's what you said about 2017 or 2018. Now is 2022.
By the time the crash comes, my second property would have been fully paid up! Shiok!
My second is a freehold unit.
Fully paid?
More like already FLIPPED out for a profit?
Cannot hold too long because will become $ZERO ultimately..... :onthego:
smellyfish
27-04-17, 21:21
LH balance 95 years
Price: $1m
Rental: $36,000 per year for 95 years with zero value at end of 99 years (assuming net rental)
FH
Price: $1.2m (say $0.2m higher than LH)
Rental: same at $36,000 per year forever (assuming net rental)
Is above a good comparison? Is TB the guru in this forum who has the answer which is a better investment? I see he posts everything.
This seems to be the logic... and so if you can choose between a freehold shack in Pulau Ubin and a leasehold apt in marina one for the same price, choose the freehold in Ubin, because even if you can only rent it out for $1, over the next 3 billion years until the sun burn out, you would have made back $3billion.
This seems to be the logic... and so if you can choose between a freehold shack in Pulau Ubin and a leasehold apt in marina one for the same price, choose the freehold in Ubin, because even if you can only rent it out for $1, over the next 3 billion years until the sun burn out, you would have made back $3billion.
So does this forum guru teddybear shares the above view?
I like to hear his expert opinion and which investment would he choose?
Case 1: LH balance 95 years
Price: $1m
Rental: $36,000 per year for 95 years with zero value at end of 99 years (assuming net rental)
Case 2: FH
Price: $1.2m (say $0.2m higher than LH)
Rental: same at $36,000 per year forever (assuming net rental)
So sorry, only know Southbank.
Now that Minister Lawrence Wong, a credible person in the Government has shot the WAKE UP CALL on Perils of owning ageing leasehold properties, it is more difficult for those telling LIES about how many good 99-years Leasehold properties are in the HOPE OF FLIPPING AT OBSCENE PRICE of their AGING properties to OTHERS to hold their "BABIES"..........
You can read more here....
https://www.theedgeproperty.com.sg/content/perils-owning-ageing-leasehold-properties
Perils of owning ageing leasehold properties
By Cecilia Chow / The Edge Property | April 21, 2017 12:00 PM MYT
.............
The two HDB owners are representative of many others staying in ageing leasehold properties who became worried, following National Development Minister Lawrence Wong’s blog post on March 24. It was intended to caution buyers against paying high prices for older HDB flats on the assumption that their flats would automatically be eligible for the Selective En-bloc Redevelopment Scheme (SERS).
Wong wrote, “In fact, for the vast majority of HDB flats, the leases will eventually run out, and the flats will be returned to HDB, which will in turn have to surrender the land to the State.” He added, “As the leases run down, especially towards the tail-end, the flat prices will come down correspondingly.”
.......................
JLL’s Tan advises owners of private residential projects on leasehold sites to be aware that, as the lease gets shorter, the differential premium that developers have to pay gets higher. “This will eat into their sale price,” he says.
For Rio Casa, if the differential premiums were included, the total land cost would amount to $649.8 million, according to SLP Research (see chart). SLP’s Mak points out that the differential premiums account for about 30% of the total land cost for some of these HUDC estates.
condoforum guru teddybear with 10k+ posts... is silent on this one.
where is your vigour and trolling skills which had been shown time and time again in this forum in virtually all topics.
come on and troll me!
So does this forum guru teddybear shares the above view?
I like to hear his expert opinion and which investment would he choose?
Case 1: LH balance 95 years
Price: $1m
Rental: $36,000 per year for 95 years with zero value at end of 99 years (assuming net rental)
Case 2: FH
Price: $1.2m (say $0.2m higher than LH)
Rental: same at $36,000 per year forever (assuming net rental)
anythingwhatever
01-05-17, 22:02
condoforum guru teddybear with 10k+ posts... is silent on this one.
where is your vigour and trolling skills which had been shown time and time again in this forum in virtually all topics.
come on and troll me!
Actually he has a point lah... If tenure is the only consideration, Freehold would win of course.
However, when people buy properties, aside from tenure, also have to consider many other factors such as:
- Location
- Facilities
- Amenities
- Price
- etc
So the buyers will make their own trade-offs and choose accordingly. Each has their own market segments and customer base.
Who would want to reply to troll like you??????? :moon:
condoforum guru teddybear with 10k+ posts... is silent on this one.
where is your vigour and trolling skills which had been shown time and time again in this forum in virtually all topics.
come on and troll me!
There you go.... you just replied, King Troll!
You just replied to me but NO BALLS to give your opinion on below?
Is below a trick question? Or you are a wussy pussy bear who doesn't know how to analyse?
If you dun know how to analyse or simply NO BALLS to give an answer, I will accept that coz you are just a TWIT!
I like to hear his expert opinion and which investment would he choose?
Case 1: LH balance 95 years
Price: $1m
Rental: $36,000 per year for 95 years with zero value at end of 99 years (assuming net rental)
Case 2: FH
Price: $1.2m (say $0.2m higher than LH)
Rental: same at $36,000 per year forever (assuming net rental)
Who would want to reply to troll like you??????? :moon:
Yes bro, that's why people like you in this forum is contributing with valuable comments which makes a forum a lively place to read and learn.
Since that teddybear likes to talk about LH vs FH only and spreading his shit, I gave him a simple example but he has no balls to reply.
So I just want the other forummers to know that he is not only a clock with no hands but also someone who is a twit and a troll with 10k+ posts.
He is like an expert in financials but then no balls to reply on my simple example.
Actually he has a point lah... If tenure is the only consideration, Freehold would win of course.
However, when people buy properties, aside from tenure, also have to consider many other factors such as:
- Location
- Facilities
- Amenities
- Price
- etc
So the buyers will make their own trade-offs and choose accordingly. Each has their own market segments and customer base.
Case study for analysis:
https://www.google.com.sg/amp/s/kopitiambot.com/2017/05/05/lum-chang-acquires-one-tree-hill-gardens-for-s65m-in-first-en-bloc-deal-this-year/amp/
Got 20% premium or only about 4% above new LH99 land price?
You be the judge.
tonymontana
06-05-17, 02:28
of course FH better lor.
Case study for analysis:
https://www.google.com.sg/amp/s/kopitiambot.com/2017/05/05/lum-chang-acquires-one-tree-hill-gardens-for-s65m-in-first-en-bloc-deal-this-year/amp/
Got 20% premium or only about 4% above new LH99 land price?
You be the judge.
thank you for pointing it out.
what LH99 land price is used for comparison?
if compare with one tree hill mansion,
from URA data, 99LH from 1973 (55 years remaining).
ONE TREE HILL MANSIONS 1,440,000 - 1,615 Strata 11 to 15 892 Mar-17
ONE TREE HILL MANSIONS 1,400,000 - 1,625 Strata 11 to 15 861 Jul-16
ONE TREE HILL MANSIONS 1,630,000 - 1,615 Strata 01 to 05 1,010 Feb-15
ONE TREE HILL MANSIONS 1,700,000 - 1,615 Strata 11 to 15 1,053 Sep-14
seems to be like one tree hill gardens seems to be getting a good deal ($1664psf) compare to one tree hill mansions (~$890psf).
will watch whether one tree hill mansions will be enbloc.
by the way, is it a right comparison between one tree hill mansions vs one tree hill gardens?
like right we will have 1 (<10 years old) FH vs 1 new LH, back to back.
Martin Place Residence (MPR) vs Martin Modern (MM).
indicative prices say MM will be priced at higher psf than MPR.
if MM psf > MPR psf, who would buy MM ?
or would MPR price rise to match that of MM ?
People buying 99-years leasehold properties dreaming of en bloc should just wake up to reality, like this 99-years leasehold property en bloc deal!
Because of the lease running down, the properties are only en bloc at $518 psf ppr! :doh:
Read this news:
Oxley-led consortium secures Rio Casa for $518 psf ppr in en bloc deal
(http://www.businesstimes.com.sg/companies-markets/oxley-led-consortium-secures-rio-casa-for-s575m-in-en-bloc-deal)
A CONSORTIUM comprising Oxley Holdings, KSH Holdings, Lian Beng Group and the private investment firm of Super Group's Teo family has secured a residential property in Hougang for S$575 million.
The property known as Rio Casa is a former HUDC estate that has been privatised and sits on a land area of about 36,811.1 square metres.
ted differential premium of S$208 million is payable to the state for the top-up of the lease and for the development of the site to a gross plot ratio of 2.8.
I failed to see your logic!
You keep telling us 99-years leasehold properties are good investment, and keep wanting to buy more!
Yet property prices, even if freehold, will probably earn you 5% p.a. compounded over the long term!
On the other hand, your 99-years leasehold properties will become $ZERO at the end of 99-years old!
Since your investment returns are so good, why not just put all your $1M into investment and over 98 years compounded at 8% pa will become = $1,885.9M i.e. $1.88 BILLIONS !!!!!!!!!!!!!
Why so stupid use that $1M to buy 99-years LH propertiesand see it earn 5% pa in short term and then become $ZERO at the end of 99-years?
Your claims just doesn't tally and something must be amiss here?
Like may be you have say $10M net worth but you put $500k into investment and by luck earns 10% p.a. over a short term but the rest of your money like $9.5M put in savings account earning almost 0% interest and claiming "my last few years investment record gains are over 10%."????????
If your overall investment record gains (inclusive of all your net worth and capital) is so impressive as you claimed, like over 10% p.a. over the long term (which few people do), you are saying that you are even better than Temasek and GIC! :tongue3:
If with your that kind of calculation, I can also tell you that "my last few years investment record gains are over >30%!!!!!!!!". :doh:
Not bluffing! I ever had a stock that I sold at a profit of >500% over 3 years or >140% p.a. compounded! :onthego:
People buying 99-years leasehold properties dreaming of en bloc should just wake up to reality, like this 99-years leasehold property en bloc deal!
Because of the lease running down, the properties are only en bloc at $518 psf ppr! :doh:
Read this news:
Oxley-led consortium secures Rio Casa for $518 psf ppr in en bloc deal
(http://www.businesstimes.com.sg/companies-markets/oxley-led-consortium-secures-rio-casa-for-s575m-in-en-bloc-deal)
A CONSORTIUM comprising Oxley Holdings, KSH Holdings, Lian Beng Group and the private investment firm of Super Group's Teo family has secured a residential property in Hougang for S$575 million.
The property known as Rio Casa is a former HUDC estate that has been privatised and sits on a land area of about 36,811.1 square metres.
ted differential premium of S$208 million is payable to the state for the top-up of the lease and for the development of the site to a gross plot ratio of 2.8.
According to this article http://www.channelnewsasia.com/news/singapore/rio-casa-sold-for-s-575m-in-en-bloc-deal-8883450, each owner stands to receive about $2 million for their unit.
The units are all above 1600 sq ft so didn't they get paid more than $1000 psf ?
tonymontana
26-05-17, 07:50
Oxley very busy eh these days.
575m is a good price for that site. Dont think the owners of the enbloc units are complaining much.
tonymontana
26-05-17, 07:52
According to this article http://www.channelnewsasia.com/news/singapore/rio-casa-sold-for-s-575m-in-en-bloc-deal-8883450, each owner stands to receive about $2 million for their unit.
The units are all above 1600 sq ft so didn't they get paid more than $1000 psf ?
I think it's a reasonable deal for their ageing property. The older rio casa , as is common for older properties, have less intensified usage of the land area. The new development GPR is increased to 2.8, so expect a lot more units based on increased GFA.
add in construction cost and misc cost to the 518psf GFA, the launch price for the new development is likely above 1000psf even for larger units. Hope oxley don't do their thing and flood hougang with hundreds of MM units. :p
If you buy something for less than half a million, live in there for close to half a century, and have it sold for 3 times or more the price you paid, in part because of increased plot ratio, why do you care whether the site is leasehold or freehold?
This is one perfect example Teddy.
The other forumer has already answered your question:- because of plot ratio increase!
In terms of actual price based on $PSF PPR (based on new plot ratio), it is indeed only $518 psf ppr! That is the most important thing that developer considers, not how much each owner will get.
People would have to think whether their properties would have their plot ratio increased by the government, particularly when most new 99-years leasehold estates are now having plot ratio of 2.1 or more (and more commonly 2.8 as in this case)? :distress:
According to this article http://www.channelnewsasia.com/news/singapore/rio-casa-sold-for-s-575m-in-en-bloc-deal-8883450, each owner stands to receive about $2 million for their unit.
The units are all above 1600 sq ft so didn't they get paid more than $1000 psf ?
I think it's a reasonable deal for their ageing property. The older rio casa , as is common for older properties, have less intensified usage of the land area. The new development GPR is increased to 2.8, so expect a lot more units based on increased GFA.
add in construction cost and misc cost to the 518psf GFA, the launch price for the new development is likely above 1000psf even for larger units. Hope oxley don't do their thing and flood hougang with hundreds of MM units. :p
Given that nowaday the 99-years leasehold properties already have plot ratio mostly of 2.8, you expect the plot ratio to increase again like Rio Casa? Fat hope! :biggrin-new:
People should not just "copy" blindly, and should also not "believe" blindly............ :pirate:
If you buy something for less than half a million, live in there for close to half a century, and have it sold for 3 times or more the price you paid, in part because of increased plot ratio, why do you care whether the site is leasehold or freehold?
This is one perfect example Teddy.
Rio Casa was completed in 1986.
Assuming an initial lump sum purchase payment of $400,000 in 1986.
The PV of $400,000 based on 2.5% compounding is about $850,000. This is the figure for normal incremental of asset value.
But I doubt that it was $400,000, which could buy much better ones in 1986.
There were 6 sales transacted last year, congratulations to the lucky six. Too bad for those who just sold.
Amber Woods
26-05-17, 09:33
The government has stop increasing plot ratio for land where private property now sit so as to prevent owners getting a windfall without any effort. The government only increases the plot ratio on vacant land and HDB's land via SER and where HDB flats now sit. Developer who acquire private land via en bloc will still be subject to its existing plot ratio. However, the developer can after acquiring the land apply for higher plot ratio if the neighboring plots have higher plot ratio by paying the differential premium.
bargain hunter
26-05-17, 10:51
If you buy something for less than half a million, live in there for close to half a century, and have it sold for 3 times or more the price you paid, in part because of increased plot ratio, why do you care whether the site is leasehold or freehold?
This is one perfect example Teddy.
even the buyers who bought last year paid no more than $845k. after deducting off max ABSD + SSD still huat.
Rio Casa was completed in 1986.
Assuming an initial lump sum purchase payment of $400,000 in 1986.
The PV of $400,000 based on 2.5% compounding is about $850,000. This is the figure for normal incremental of asset value.
But I doubt that it ddwas $400,000, which could buy much better ones in 1986.
There were 6 sales transacted last year, congratulations to the lucky six. Too bad for those who just sold.
Rio Casa in 1986 likely less than $100k. Yesterday developers paid $710ppr including lease top up. Likely new condo at this area will launch at $1300psf..
I think it's a reasonable deal for their ageing property. The older rio casa , as is common for older properties, have less intensified usage of the land area. The new development GPR is increased to 2.8, so expect a lot more units based on increased GFA.
add in construction cost and misc cost to the 518psf GFA, the launch price for the new development is likely above 1000psf even for larger units. Hope oxley don't do their thing and flood hougang with hundreds of MM units. :p
Actually I was trying to say that the owners got a good deal. The $518 psf ppr isn't relevant to the owners.
Actually I was trying to say that the owners got a good deal. The $518 psf ppr isn't relevant to the owners.
Likely new launch at $1300psf. Developers spent $710ppr.
$575m to owners and $208m lease top up and redevelopment of site to 2.8 plot ratio.
So total cost: $575m + $208m= $783m
bargain hunter
26-05-17, 15:11
Likely $1300psf. $710ppr.
$575m to owners and $208m lease top up and redevelopment of site to 2.8 plot ratio.
that will help kingsford waterbay move some of their 11xxpsf units.
Why not relevant?
If the property is a freehold, then the owners will get about $783 MILLIONS (and not $575M)!
The owner will get paid $705 psf ppr for the properties!
That is, they will get 36% MORE! (=(705-518)/518)
And this is just yester-year!
In future, all newer 99-years leasehold properties will not get en bloc anymore because government is NOT going to increase your plot ratio any more! Fat hope of en bloc and cashing out before their properties lease run out and their 99-years leasehold property value goes to $ZERO! :distress:
Actually I was trying to say that the owners got a good deal. The $518 psf ppr isn't relevant to the owners.
Likely new launch at $1300psf. Developers spent $710ppr.
$575m to owners and $208m lease top up and redevelopment of site to 2.8 plot ratio.
So total cost: $575m + $208m= $783m
Good attempt. At 36% higher price tag developers won't buy.
Govt will not set plot ratio higher but will have to change max plot ratio to allow developers the option to increase plot ratio.
Don't listen to the rubbish about Govt not increasing plot ratio. If surrounding similar purpose plots increase in plot ratio, the vicinity's max increases as well.
Else how to renew buildings in SG?
Why not relevant?
If the property is a freehold, then the owners will get about $783 MILLIONS (and not $575M)!
The owner will get paid $705 psf ppr for the properties!
That is, they will get 36% MORE! (=(705-518)/518)
And this is just yester-year!
In future, all newer 99-years leasehold properties will not get en bloc anymore because government is NOT going to increase your plot ratio any more! Fat hope of en bloc and cashing out before their properties lease run out and their 99-years leasehold property value goes to $ZERO! :distress:
And this is just yester-year!
In future, all newer 99-years leasehold properties will not get en bloc anymore because government is NOT going to increase your plot ratio any more! Fat hope of en bloc and cashing out before their properties lease run out and their 99-years leasehold property value goes to $ZERO! :distress:
Question, what is the limit for the plot ratio.
Land scarcity is actualy a myth. Gov has enough reserved lands to easily accomodate 7 millions. Not to mention current building heights here probably only half of those in HK.
Amber Woods
26-05-17, 19:09
The only time the government increased the plot ratio while the private property was still standing was for the land around Butterworth area along Tanjong Katong Road. There were then mostly landed properties. In order to motivate the landed owners to move, the government increased the plot ratio while the landed owners were still residing. There was no reason for these owners not to sell collectively then. The government did that because of the need to develop Paya Lebar regional centre, hence these landed properties had to go.
Other than the land Butterworth area, the government has not increased plot ratio for land where private property still standing.
But the sellers do factor in the potential for increased land use intensity if developers bite and apply.
Another example is Pearl apartments, can apply to increase land use intensity.
Ultimately, the Govt has to encourage increased plot ratio everywhere, beginning with the low plot areas.
Currently, there is a GCB area being sold and application made to convert to strata. The price factors in the potential for success in increasing plot ratio. No developer will bite if it's ratio cannot be confidently projected at their target price and intensity. In other words, the application should have some kind of approval for increased land use potential before the developer agrees to buy. This is different in principle to increasing plot ratio when building is standing, but in reality, it reserves the potential to profit for the owners and not new buyers.
The only time the government increased the plot ratio while the private property was still standing was for the land around Butterworth area along Tanjong Katong Road. There were then mostly landed properties. In order to motivate the landed owners to move, the government increased the plot ratio while the landed owners were still residing. There was no reason for these owners not to sell collectively then. The government did that because of the need to develop Paya Lebar regional centre, hence these landed properties had to go.
Other than the land Butterworth area, the government has not increased plot ratio for land where private property still standing.
Land scarcity is actualy a myth. Gov has enough reserved lands to easily accomodate 7 millions. Not to mention current building heights here probably only half of those in HK.
Look beyond the 7 mil in 2030. Plans are probably in progress for 10 mil by 2050.
Open eyes and see how intensely they are building developments along expressways and expanding roads...
Infrastructural competency before population increase. Not a matter of if, but when.
10 Millions and you imagine many people coming to Singapore to be JobLESS?
Ha ha ha!
With Singapore's economy growing at 1 to 3%, you think Singapore has enough jobs for 10M population? :distress:
Look beyond the 7 mil in 2030. Plans are probably in progress for 10 mil by 2050.
Open eyes and see how intensely they are building developments along expressways and expanding roads...
Infrastructural competency before population increase. Not a matter of if, but when.
Look beyond the 7 mil in 2030. Plans are probably in progress for 10 mil by 2050.
Open eyes and see how intensely they are building developments along expressways and expanding roads...
Infrastructural competency before population increase. Not a matter of if, but when.
I think price going to cheong up. Hougang ave 7 will be launched at $1300psf.
https://www.dbs.com.sg/treasures/templatedata/article/generic/data/en/GR/052017/170526_insights_land_hungry_developers_continue_to_bid_up_land_prices.xml
Several Fallacies in your comments:
1) Developers buy without knowing for certain whether they can increase plot ratio
2) Sellers won't sell at $518 psf ppr for their 99-years leasehold properties if there is no increase in plot ratio (because the replacement properties will be much more expensive)
3) If plot ratio is already 2.8 for most new high-rise nowaday, it is most likely there will be no plot ratio increase for next 100 years (ya, your 99-years LH will expire first)!
But the sellers do factor in the potential for increased land use intensity if developers bite and apply.
Another example is Pearl apartments, can apply to increase land use intensity.
Ultimately, the Govt has to encourage increased plot ratio everywhere, beginning with the low plot areas.
Currently, there is a GCB area being sold and application made to convert to strata. The price factors in the potential for success in increasing plot ratio. No developer will bite if it's ratio cannot be confidently projected at their target price and intensity. In other words, the application should have some kind of approval for increased land use potential before the developer agrees to buy. This is different in principle to increasing plot ratio when building is standing, but in reality, it reserves the potential to profit for the owners and not new buyers.
Amber Woods
26-05-17, 21:13
Government's intent is not to let owners benefit from increasing plot ratio while the property is still standing. Developer can apply for increase in plot ratio only after acquiring the land and provided the area around the land has plot ratio higher than the land it has acquired. The ruling is very clear.
10 Millions and you imagine many people coming to Singapore to be JobLESS?
Ha ha ha!
With Singapore's economy growing at 1 to 3%, you think Singapore has enough jobs for 10M population? :distress:
Ahahaha.
So funny ... But true.
Everyone should read PY's Neither Civil Nor Servant.
Just do a simple check on which development after enbloc and torn down, rebuilt with the same plot ratio and height. Which one?
Government's intent is not to let owners benefit from increasing plot ratio while the property is still standing. Developer can apply for increase in plot ratio only after acquiring the land and provided the area around the land has plot ratio higher than the land it has acquired. The ruling is very clear.
tonymontana
26-05-17, 21:40
300psf ppr in 1997 could get a plot in tanjong rhu (leasehold). Land price definitely keeps going up. that is why as long as singapore long term prospect is stable, i'm confident of property here.
anythingwhatever
26-05-17, 21:41
I think price going to cheong up. Hougang ave 7 will be launched at $1300psf.
https://www.dbs.com.sg/treasures/templatedata/article/generic/data/en/GR/052017/170526_insights_land_hungry_developers_continue_to_bid_up_land_prices.xml
Amazing...
tonymontana
26-05-17, 21:42
Rio Casa was completed in 1986.
Assuming an initial lump sum purchase payment of $400,000 in 1986.
The PV of $400,000 based on 2.5% compounding is about $850,000. This is the figure for normal incremental of asset value.
But I doubt that it was $400,000, which could buy much better ones in 1986.
There were 6 sales transacted last year, congratulations to the lucky six. Too bad for those who just sold.
850K was indeed the price paid for units transacted just before rio casa was en blocked (in 2016?). very good ROI!
tonymontana
26-05-17, 21:43
Actually I was trying to say that the owners got a good deal. The $518 psf ppr isn't relevant to the owners.
oh, i see. Yes, good deal.
Government's intent is not to let owners benefit from increasing plot ratio while the property is still standing. Developer can apply for increase in plot ratio only after acquiring the land and provided the area around the land has plot ratio higher than the land it has acquired. The ruling is very clear.
Poor Ambr has repeated the same message BUT he is not reading it right ...
Reminds me of our ABSD, SSD 'debate'.
That ABSD / SSD I do admit I was stuck in a certain mode, and I did admit my error in considering it.
But this, think again. When developers aim to buy and enblockers aim to sell, surely they will consider the POTENTIAL of the increased area's plot ratio, and the chance of success in applying to intensify land use, not to mention the likelihood of already pre-approved conditional allowance to increase land use.
Poor Ambr has repeated the same message BUT he is not reading it right ...
Reminds me of our ABSD, SSD 'debate'.
anythingwhatever
27-05-17, 00:17
https://www.theedgeproperty.com.sg/content/how-spot-next-en-bloc
"Interestingly, tenure (freehold versus leasehold) and location (whether the property is located in Central or Non-Central Region) were statistically insignificant."
But they didn't mention something that I emphasized:
That is, if both freehold and leasehold at same locations get en bloc, the freehold will get a price that is easily 35% to even 100% more than 99-years leasehold (since 99-years leasehold has value of $0 at end of 99-years)!
https://www.theedgeproperty.com.sg/content/how-spot-next-en-bloc
"Interestingly, tenure (freehold versus leasehold) and location (whether the property is located in Central or Non-Central Region) were statistically insignificant."
Amber Woods
27-05-17, 06:15
Just do a simple check on which development after enbloc and torn down, rebuilt with the same plot ratio and height. Which one?
All en bloc sites bought by developers were rebuilt based on existing plot ratio. So far, I have not learnt that any developer attempt to increase the plot ratio after acquiring the land.
Do not be mistaken with existing developments not fully built to their full plot ratio. Many older developments were not built to their full plot ratio when they were constructed to give the development more common space and better quality living unlike current developers who build to their full plot ratio to maximize profits.
That ABSD / SSD I do admit I was stuck in a certain mode, and I did admit my error in considering it.
But this, think again. When developers aim to buy and enblockers aim to sell, surely they will consider the POTENTIAL of the increased area's plot ratio, and the chance of success in applying to intensify land use, not to mention the likelihood of already pre-approved conditional allowance to increase land use.
You are absolutely right, except for the pre-approval part.
Unless I read her wrongly also, Amber is saying that the Developer should not assume a blanket approval when he submits an application to URA. Therefore implying that the system has no pre-approval process; I don't know if this is true but she appears to be an insider to know more.
In other words, the Developer can assess the potential and assume whatever approval but he has to carry the risk should the assessment turns out wrong. Actually the Developer is not stupid la. For example, older condos they all have open carparks which can be rebuilt underground etc.
I think we should all relax, I am sure that the market moves by fundamentals and not by the activity in this or other property forum. There is no bear in property market; how do you short a property market? Anyone who is not vested IS a potential buyer tomorrow, anyone renting today contributes to the rental demand. To me, the more the merrier. No?
https://www.theedgeproperty.com.sg/content/how-spot-next-en-bloc
"Interestingly, tenure (freehold versus leasehold) and location (whether the property is located in Central or Non-Central Region) were statistically insignificant."
This country is so young, when compared to UK for example.
None of the HDB built has crossed the 60th year of 99-years lease, but in another 5-10 years we will see the volume. Then, we should see the advantage of freehold status.
If I am wrong Teddy would already have come in. He is the insider with a blind spot.
But what makes you think Amber is an insider? From the postings, he/she is not even vested in the private market.
You are absolutely right, except for the pre-approval part.
Unless I read her wrongly also, Amber is saying that the Developer should not assume a blanket approval when he submits an application to URA. Therefore implying that the system has no pre-approval process; I don't know if this is true but she appears to be an insider to know more.
In other words, the Developer can assess the potential and assume whatever approval but he has to carry the risk should the assessment turns out wrong. Actually the Developer is not stupid la. For example, older condos they all have open carparks which can be rebuilt underground etc.
I think we should all relax, I am sure that the market moves by fundamentals and not by the activity in this or other property forum. There is no bear in property market; how do you short a property market? Anyone who is not vested IS a potential buyer tomorrow, anyone renting today contributes to the rental demand. To me, the more the merrier. No?
http://www.teakhwa.com/whatisenbloc.htm
https://www.ura.gov.sg/uol/circulars/2012/jun/dc12-06
Additional GPR and storey height proposed will require prior clearances from the Land Transport Authority (LTA) on traffic and car parking matters and from other relevant agencies. Such proposals must also comply with all development control guidelines for PW developments such as the use quantum controls, building setbacks, etc.
https://www.ura.gov.sg/uol/master-plan/View-Control-Plans/Building-Height-Plan
https://www.ura.gov.sg/uol/circulars/2000/apr/dc00-08
If I am wrong Teddy would already have come in. He is the insider with a blind spot.
But what makes you think Amber is an insider? From the postings, he/she is not even vested in the private market.
I said she APPEARS to be, not she IS as you wrote.
But whether she is or not is beside the point. Whether she is vested or not, lagi beside th point.
You happy can liao.
If en bloc site is below the baseline plot ratio which is mostly the case for older development, the developer can max it out. But DC is payable. One good eg is Minton
My builder told me a story before.
There was this case which involved a pair of semi-ds; one of them had been reconstructed to 3 storeys, its neighbor was an original 1-storey. A buyer came along, bought the old semi-d, his architect then submitted a BP application for new erection of 3-storeys.
URA denied the application, stating the area height limit etc. URA didn't bother to explain how his neighbor had gained the approval.
No choice, llst. His unit is forever dwarfed by his neighbor's. Not a big deal, but on fengshui perspective the buyer has been unhappy since.
Saying she appears to be, is the same in meaning as you think she is. Surely I can't say what makes you think she appears to be?
If she is not vested and just presents one side of the argument (the not-worth-it side), would you trust her as an insider?
I also think appears to be a her but no way to be sure.
In forum discussion we have our views, but are all trying to learn how things work. Any contrarian views supported by official documents, I will be glad to hear them out.
I said she APPEARS to be, not she IS as you wrote.
But whether she is or not is beside the point. Whether she is vested or not, lagi beside th point.
You happy can liao.
Saying she appears to be, is the same in meaning as you think she is. Surely I can't say what makes you think she appears to be?
If she is not vested and just presents one side of the argument (the not-worth-it side), would you trust her as an insider?
I also think appears to be a her but no way to be sure.
In forum discussion we have our views, but are all trying to learn how things work. Any contrarian views supported by official documents, I will be glad to hear them out.
Think you should read again what she said. Actually what she said are the same as what you said, except the part on the assumption of plot ratio revision. Whether there is a pre-approval process in the system, it is not really important. A lot of things can be 'pre-approved' over a coffee.
A speculation on plot ratio revision, or ABSD revision, is just speculation. You can buy an old condo with speculation that it will be en-bloc'ed; it may happen but then it may not.
So what are the factors that support your speculation?
Look at 2013 Masterplan which drives the so-called decentralisation developments, it is just 4-years old. Of course, you can speculate a plot ratio revision to be in the new Masterplan coming out next year. It may happen but then it may not.
Property is a long term play for me. For now is only buy and buy when can afford. I tend to go for new or near new properties. Not looking at speculation on plot ratio changes by the next Masterplan, but it will definitely happen in 10, 20 years. The longer the horizon, the greater the chance to ultimately reap the benefits like the recent enbloc sales, though that itself is a tough hurdle to clear.
http://m.stproperty.sg/articles-property/singapore-property-news/too-soon-to-bet-on-plot-ratio-hikes-analysts/a/103491
And I did read what Amber said that there is no revision to plot ratio whilst the building stands, but there is half a dozen more ways to intensify. Height restrictions can disappear due to airbase relocation, rezoning of land, change in number of stories allowed for each fixed plot ratio etc. It is not a given at a fixed point or fixed location but it will be a given if you read the signs carefully.
Think you should read again what she said. Actually what she said are the same as what you said, except the part on the assumption of plot ratio revision. Whether there is a pre-approval process in the system, it is not really important. A lot of things can be 'pre-approved' over a coffee.
A speculation on plot ratio revision, or ABSD revision, is just speculation. You can buy an old condo with speculation that it will be en-bloc'ed; it may happen but then it may not.
So what are the factors that support your speculation?
Look at 2013 Masterplan which drives the so-called decentralisation developments, it is just 4-years old. Of course, you can speculate a plot ratio revision to be in the new Masterplan coming out next year. It may happen but then it may not.
With respect to plot ratio revision, my take is that height restriction is more deadly. The Shun Fu enbloc site can't build taller than 30 storeys though plot ratio suggest can be done.
The Payar Lebar area will benefit from a restriction in building height.
Sorry to digress.
Amber Woods
27-05-17, 11:06
You are absolutely right, except for the pre-approval part.
Unless I read her wrongly also, Amber is saying that the Developer should not assume a blanket approval when he submits an application to URA. Therefore implying that the system has no pre-approval process; I don't know if this is true but she appears to be an insider to know more.
In other words, the Developer can assess the potential and assume whatever approval but he has to carry the risk should the assessment turns out wrong. Actually the Developer is not stupid la. For example, older condos they all have open carparks which can be rebuilt underground etc.
I think we should all relax, I am sure that the market moves by fundamentals and not by the activity in this or other property forum. There is no bear in property market; how do you short a property market? Anyone who is not vested IS a potential buyer tomorrow, anyone renting today contributes to the rental demand. To me, the more the merrier. No?
The Master Plan 2014 is the latest on plot ratio for all land in Singapore. Among other things, developer base on the MP 2014 plot ratio to price their bid for en bloc sale. If an existing development baseline is lower than the allowable plot ratio, the developer has to pay the differential premium to maximize the full plot ratio. If the existing baseline is already above the allowable plot ratio (like Amber Skype with existing baseline of 3 but MP 2014 plot ratio is only 2.8), the developer can continue to build base on its existing baseline and hence no differential premium payable.
Thus far, no developer has applied to URA after acquiring the land for higher plot ratio because there is really no incentive for developer to do so because the development charges is rather high. There is no additional profits to be made to apply for increase in plot ratio.
However, (this is my personal assumption and URA has been silenced on this part),
if the surrounding area has plot ratio higher that what the land the developer has acquired, URA may ask the developer to pay for the differential premium or development charges if the developer submit its building plan for approval. My assumption is that URA will want to ensure the plot of land is redeveloped to maximize land used. Having said that, thus far URA has not done so except for HDB Sers land (like Sims Urban) where URA increased the plot ratio to 3.5 (previously was 2.8 when HDB flats were standing there) and tender out the land base on plot ratio of 3.5. This practice by URA is to strictly prevent owners or developers (who already acquired the land) any possible windfalls.
Amber Woods
27-05-17, 11:13
With respect to plot ratio revision, my take is that height restriction is more deadly. The Shun Fu enbloc site can't build taller than 30 storeys though plot ratio suggest can be done.
The Payar Lebar area will benefit from a restriction in building height.
Sorry to digress.
Height restriction will determine if the development is compact or more well spread. Take for example, Sims Urban, the plot ration is 3.5 but there is height restriction because it is near to Paya Lebar Airbase. Hence, developer still maximize the plot ratio of 3.5 and squeeze all the blocks so close to each other. If there is no height restriction, for plot ratio of 3.5, the development is at least 36-storey. Sims Urban is only 18 storey and you will notice the blocks are so close to one another because the developer want to maximize profits.
...
If the property is a freehold, then the owners will get about $783 MILLIONS (and not $575M)!
The owner will get paid $705 psf ppr for the properties!
That is, they will get 36% MORE! (=(705-518)/518)
...
do note that the extra $208mio consist of increased plot ratio & top up lease to 99years.
Good attempt. At 36% higher price tag developers won't buy.
...
is there a difference to the developer paying $600mio (example) to the owners and paying $575mio to owner +25mio (example) to govt to top up lease. both come up to $600 mio.
...
Thus far, no developer has applied to URA after acquiring the land for higher plot ratio because there is really no incentive for developer to do so because the development charges is rather high. There is no additional profits to be made to apply for increase in plot ratio.
...
interesting, applying to Rio Casa's case.
$575mio translates to 575/36811.1/2.1/10.764 = 691psf ppr
$(575+208) translates to 783/36811.1/2.8/10.764 = 706psf ppr
(can somebody crosscheck the figures? like plot ratio.)
perhaps what developer lose in margin (15psf ppr), they more than make up in volume ?
is the 208mio consist wholly of top up lease or does it include increasing plot ratio.
Maybe I did not make it clear. I doubt FH sellers will be content to sell at 36% higher if they did own such a large plot. They may be looking at 66% higher.
do note that the extra $208mio consist of increased plot ratio & top up lease to 99years.
is there a difference to the developer paying $600mio (example) to the owners and paying $575mio to owner +25mio (example) to govt to top up lease. both come up to $600 mio.
In the Landed segment, the price differential between FH and LH is more pronounced than condo or HDB. Partly because a buyer is more aware that he has to price the land, and then the building that sits on the land. Separately. Valuer Aldo does the same way.
In condo or HDB, normally a buyer doesn't do that so consciously. And of course, the land on which the building sits, the title is with MCST and SLA respectively.
I suggest a reading of a report to gain an insight.
https://www.orangetee.com/Research/RED/FreeholdandLeaseholdAnalysis.pdf
In condo or HDB, normally a buyer doesn't do that so consciously. And of course, the land on which the building sits, the title is with MCST and SLA respectively.
https://www.orangetee.com/Research/RED/FreeholdandLeaseholdAnalysis.pdf
Condo, HUDC, Private apartment are strata title, HDB and DBSS are leasing of airspace.
They are different classes of property. To be confused about the classes of property can only lead one to buy DBSS thinking it is private.
There is no land title for HDB and DBSS only leasing document.
Also, MCST doesn't issue land title, they only manage the condo common property.
Condo, HUDC, Private apartment are strata title, HDB and DBSS are leasing of airspace.
They are different classes of property. To be confused about the classes of property can only lead one to buy DBSS thinking it is private.
There is no land title for HDB and DBSS only leasing document.
Also, MCST doesn't issue land title, they only manage the condo common property.
Think you are the one who is confused.
It is strange that a multiple properties owner, AND also a property agent, does not know the basis.
https://www.ifa.sg/hdb-title-deed/
So sorry you so SMART.
I was shown a "Land Title Deed" of a 5 room HDB flat. For those who does not know, it is not a title teed. Instead, many are shocked to see that the “owner” of the flat is merely taking out a lease. It clearly shows that the owner is not an “owner” of the flat. The so called 'Title Deed' is given to the owner when all mortgages are paid. However, what is written on it is a reminder that HDB owners do not really own their flat. The so-called "Title Deed" shows that it is a lease because the property is a 99 years leasehold or perhaps HDB flats are tightly regulated government properties. Likely it is due to these two reasons.
So should we rent instead of “buying” a HDB flat since the latter does not make us owners even if all mortgages are paid up? Well, for a 5 room flat it is not too difficult to rent the entire flat for $2000 per month. Assuming a time horizon of 30 years and that the discount rate is the same as inflation, the present value of this rental is the 2000 x 12 x 30 = $720,000! It is possible to buy a 5 room flat at a much cheaper price than this. Thus, “buying” a 5 room flat is still more worth it.
But most still cannot swallow the hard fact that “owners” of HDB flat do not own the flat!
https://www.99.co/blog/singapore/mcst-management-corporation-strata-title/
PROPERTY NEWS & ANALYSIS
MCST – What is it?
AUGUST 17, 2015
In real estate, MCST stands for Management Corporation Strata Title
Quite a mouthful, but put in plain english, it simply refers to the managing body of a condominium or any compound which has multiple owners and shared public facilities (which are typically condominiums).
When a Management Corporation is contracted to manage an estate it is given a name that looks like this: Management Corporation Strata TItle Plan No. xxxx (where “xxxx” are running numbers).
Why are there MCSTs?
The need for a managing body arises from the nature of private housing in Singapore. Many a Singaporean have found their homes in compounds such as condominiums where numerous owners share common facilities.
These compounds usually come with a swimming pool, small park, gym, security and so on. Naturally, all such public facilities have to be managed, maintained and at times added on to.
This is where the MCST comes in. Seeing that property owners do not wish to constantly manage everything themselves, they delegate a lot of tasks to a separate body – and this body is the MCST.
So what does a MCST do exactly?
It’s difficult to generalise what the job scope of the MCST precisely is. The duties tend to range from managing the day to day cleaning and fixing of the public facilities, to upholding the general health of the compound (e.g. taking care of leakages, mold, pest) to managing its overall security. A good MCST could expand its duties to include community development or even property appreciation.
It is both in the quality of service and the breadth of its tasks that a MCST can differentiate itself from its competitors, and so they often do. While some MCSTs may set out to do the bare minimum, others take initiative and fix problems before you even realize they were there to begin with. Naturally then, most MCSTs fall somewhere between these two extremes.
A good MCST may mean better living at lower management fees.
Procedural details
Let’s take a step back – where does the MCST come from again?
In the early stages near a building’s completion, it is the property developer’s responsibility to arrange the formation of a MCST. It is legally obliged to do so within 2 months from the issuance of the Temporary Occupation Permits (TOP) to the new homeowners.
After the first Annual General Meeting (AGM), the responsibilities of and control over the management is given to the property owners. The shift is a little complex and involves some steps, for which the details are available here (see page 9 and 10).
If all goes well, the owners now have full authority to either keep the present management corporation or to appoint a different one to manage their affairs as the MCST.
It is common, especially amongst the bigger estates, that the owners collectively appoint a management council, which in turn hires a management agent. The management agent is the go-to person, who takes care of all the day to day business, and functions as the liaison between the MCST, the management council, and by extension the property owners.
A comprehensive list of all MCSTs
How to know which MCST does what, and where? You can find the comprehensive list of all MCSTs with all the currently active MCSTs here. The list includes relevant information such as the condominiums information and contact details. Additionally, if you already know either the MCSTs plan number or the name of the development, this website is very helpful in that it allows you to fill them in and it will then give you all the relevant information such as contact details of the manager agent, contact details of the MCST, address development name etc.
How to find your new MCST?
Are you looking for a great MCST and you do not know where and how to find one? Here are some pointers to nudge you in the right direction.
To start off, there are two non-profit organisation whose objective it is to enhance the standard of quality of management corporations: the Association of Management Corporations in Singapore (AMCIS) and the Association of Property & Facility Managers (APFM). One way to go about this would be to inquire with these associations and see if they can help you out, and recommend the better MCSTs.
Another way is to do some homework yourself (which could be a pain, yes, but bear with us, it will be worth it!). Go out there and see them for yourself. In all likelihood, all MCSTs will tell you beforehand that they will be doing a superb job in managing your estate. Yet, to be better informed we recommend you to use their past and current performance as an indicator for future performance. For you, this means that you should check out how management corporations are and have been performing in other estates they are currently managing for.
A Checklist
Make a shortlist of managing corporations that you deem good candidates. As noted earlier, a comprehensive list of all the MCSTs active in Singapore can be found here.
Look up which estates the managing firms are currently managing and add them to a separate list. Again, save time by using this website
Visit the estates and make a detailed observation of the facilities and public spaces.
Lastly—and this is key—go talk to the tenants. Yes the tenants! After all, it is the tenants who see and experience the MCSTs work first hand every day, and they are well-suited to sharing the pros and cons about whether their estate is properly managed or not.
Additionally, you could attend the annual general meetings. While not the most exciting exercise you can think of, you will probably get to hear a lot about the MCST and get a good vibe of how the owners judge the MCST.
http://www.sla.gov.sg/Services/Property-Ownership
The land register shows who owns the land and whether there are encumbrances, such as mortgages or charges affecting the land.
Two land registers co-exist, namely:
The Register of Deeds for Common Law land under the Registration of Deeds Act;
and
The Land Titles Register for titles land under the Land Titles Act.
Think you are the one who is confused.
It is strange that a multiple properties owner, AND also a property agent, does not know the basis.
http://singaporealternatives.blogspot.co.il/2014/04/myth-of-hdb-ownership-do-you-really-own.html
Time to go reading room.
HDB’s “lease agreement” may be one of its kinds in this world because it is made to look so similar to “private ownership” but in legal terms; you do no have any “private ownership” of the land nor property.
1) You are allowed to “trade” on the lease (of rent) for profits and it makes it looks as if you “own” the land and property.
2) Although you can trade your lease but this is subjected to HDB’s approval as it is the rightful owner. HDB, as the owner, dictates on who you can sell the lease to, which race, which nationality… etc. If you really own that HDB flat and land, they have no right to dictate that!
3) But you have absolutely no right whatsoever over that land where your HDB flat sits on. Eg. You cannot fence up the place just like what private condominiums do to keep out “trespassers” because you don’t own it in the first place. i.e. it is NOT considered as “private property”.
4) You can’t have strata titles over the land and property nor decide on whether to Enblock the whole block of flats to sell it to private developers. You can’t initiate that Enblocking but ONLY HDB, the real rightful OWNER of the land could initiate such process to capitalize on the value of the land.
5) You might have paid for the construction of the carparks for your estate via the pricing mechanism dictates by HDB but you do not own these carparks. i.e. you will have to pay rent for using these carparks.
6) You cannot form your own management board to decide on maintenance issues or even for simple landscaping decision. i.e. you can’t even decide what trees to plant in your estate!
7) Anytime the government or HDB want to do anything to your estate, they can just do it without compensation or consent from HDB tenants. For example, HDB can just decide to “monetize” the carpark at the back of your block to build DBSS flats and you have no say nor compensation because you don’t own anything there, though you might have supposedly paid for the building of that carpark.
8) The reason why you have to apply for HDB approval to “sublet” your flat out is basically because HDB is the landlord. This is unlike private property owners where the government or URA has no say over who you can or cannot sublet to.
https://www.ifa.sg/hdb-title-deed/
So sorry you so SMART.
I was shown a "Land Title Deed" of a 5 room HDB flat. For those who does not know, it is not a title teed. Instead, many are shocked to see that the “owner” of the flat is merely taking out a lease. It clearly shows that the owner is not an “owner” of the flat. The so called 'Title Deed' is given to the owner when all mortgages are paid. However, what is written on it is a reminder that HDB owners do not really own their flat. The so-called "Title Deed" shows that it is a lease because the property is a 99 years leasehold or perhaps HDB flats are tightly regulated government properties. Likely it is due to these two reasons.
So should we rent instead of “buying” a HDB flat since the latter does not make us owners even if all mortgages are paid up? Well, for a 5 room flat it is not too difficult to rent the entire flat for $2000 per month. Assuming a time horizon of 30 years and that the discount rate is the same as inflation, the present value of this rental is the 2000 x 12 x 30 = $720,000! It is possible to buy a 5 room flat at a much cheaper price than this. Thus, “buying” a 5 room flat is still more worth it.
But most still cannot swallow the hard fact that “owners” of HDB flat do not own the flat!
I said the title of the land on which a HDB sits, is with SLA. You know SLA?
I wasn't talking about the 'title' of the HDB flat.
Condo, who holds the title of the building aka common pro poetry? Who holds the title of the land on which the building sits?
I said the title of the land on which a HDB sits, is with SLA. You know SLA?
I wasn't talking about the 'title' of the HDB flat.
Condo, who holds the title of the building aka common pro poetry? Who holds the title of the land on which the building sits?
I must have misunderstooded your statement.
In the Landed segment, the price differential between FH and LH is more pronounced than condo or HDB. Partly because a buyer is more aware that he has to price the land, and then the building that sits on the land. Separately. Valuer Aldo does the same way.
In condo or HDB, normally a buyer doesn't do that so consciously. And of course, the land on which the building sits, the title is with MCST and SLA respectively.
I suggest a reading of a report to gain an insight.
http://www.lawgazette.com.sg/2000-9/Sep00-focus3.htm
The conditions governing the leasehold interest in HDB flats may be found in the Housing and Development Act (Cap 129) (the ‘H & D Act’), and in the title and related documents to each flat such as the Agreement for Lease, Supplemental Agreement, Lease, Variation of Lease and the relevant Memorandum of Lease and Variation of Memorandum of Lease.
http://statutes.agc.gov.sg/aol/search/display/view.w3p;page=0;query=DocId%3A%22dfe47bd8-328e-465d-b489-37e3ee37f5e1%22%20Status%3Ainforce%20Depth%3A0;rec=0
tonymontana
27-05-17, 21:02
Also, MCST doesn't issue land title, they only manage the condo common property.
MCST is the body corporate of all lot owners who own the subdivided property (ie comprising all subsidiary proprietors i.e all strata title deed holders of that development strata plan no). The manager of common property is the appointed MA.
tonymontana
27-05-17, 21:13
also, Btw, Goh&Goh building also enbloc (back of envelope calculation puts it at >1000psf ppr). Developers are rushing to do landbanking.
http://www.propertyguru.com.sg/property-management-news/2017/5/153283/goh-goh-building-being-bought-for-s101-5mil-2
You are right about the lease arrangement.
But why is it that, when we are now at the 50th year of the appearance first HDB flats, people are still confused of this arrangement. Why is it that Lawrence Wong found it necessary to remind HDB buyers not to pay big buck for flats with limited remaining lease-years.
For any HDB, there is no land holding involved; the land belongs to the government. There is no building asset involved; the building belongs to HDB. Legally, a 'purchase' should be termed a lease agreement, without the right to a carpark space as well.
In other country, Japan for example, for this kind of arrangement whether or not the land owner is a private entity or the government, the legal term used is "Right-to-Lease". Why is it called Leasehold in Singapore?
You call a HDB flat 99 LH, a condo 99 LH, then mis-pricing will surely follow.
In other forum, someone questioned why lately HDB has started using the legal term "Title" in its communique. What "Title"? Why AGC can allow the usage of "Title" for HDB?
You need to read LKY speeches to fully understand, why, why, why.
HDB is a way of LKY thinking to give back to the people.
But over the years the thinking change.
Everything is in Black and White, no misleading some people Know, some Don't Know and others refuse to Know.
One should read more, ask more and complain less to gain more.
Somebody in this forum has already stated it very clearly the definition of legal status of "HDB flats" for layman, which makes sense to me:
- HDB flat owner owns a 99-years lease of the HDB flat from the government!
Plan simple!
It means, HDB flat owner doesn't really own the HDB flat physically, what they get is just a "lease" title to use the HDB flat unless its 99-years lease expire!
That is why HDB flat should be and ought to be much cheaper than 99-years leasehold private condos and apartments! (because private condos and apartment owners own their private properties but not their LAND which is leased from the Government for 99-years)!
You are right about the lease arrangement.
But why is it that, when we are now at the 50th year of the appearance first HDB flats, people are still confused of this arrangement. Why is it that Lawrence Wong found it necessary to remind HDB buyers not to pay big buck for flats with limited remaining lease-years.
For any HDB, there is no land holding involved; the land belongs to the government. There is no building asset involved; the building belongs to HDB. Legally, a 'purchase' should be termed a lease agreement, without the right to a carpark space as well.
In other country, Japan for example, for this kind of arrangement whether or not the land owner is a private entity or the government, the legal term used is "Right-to-Lease". Why is it called Leasehold in Singapore?
You call a HDB flat 99 LH, a condo 99 LH, then mis-pricing will surely follow.
In other forum, someone questioned why lately HDB has started using the legal term "Title" in its communique. What "Title"? Why AGC can allow the usage of "Title" for HDB?
Somebody in this forum has already stated it very clearly the definition of legal status of "HDB flats" for layman, which makes sense to me:
- HDB flat owner owns a 99-years lease of the HDB flat from the government!
Plan simple!
It means, HDB flat owner doesn't really own the HDB flat physically, what they get is just a "lease" title to use the HDB flat unless its 99-years lease expire!
That is why HDB flat should be and ought to be much cheaper than 99-years leasehold private condos and apartments! (because private condos and apartment owners own their private properties but not their LAND which is leased from the Government for 99-years)!
The difference between RL (Right to Lease) and LH, for LH there is the legal right to for example enbloc, or even to redevelop the building into a hotel if zoning is revised. That is provided all SPs consent is obtained.
LH has all the rights of a FH, except that the rights are limited to 99 years.
RL, the true legal nature of HDB, has no such rights. Units in RL are not even strata.
Please do not mislead people! LH has NO right of a FH
Leasehold - means you lease for that period, that is all!
For owners of 99-years leasehold properties, you lease the land for a period of 99-years from the Government! So you DO NOT OWN the LAND! :tongue3:
That is precisely why at the end of 99-years lease, you MUST return the land to the Government! :pig:
The difference between RL (Right to Lease) and LH, for LH there is the legal right to for example enbloc, or even to redevelop the building into a hotel if zoning is revised. That is provided all SPs consent is obtained.
LH has all the rights of a FH, except that the rights are limited to 99 years.
RL, the true legal nature of HDB, has no such rights. Units in RL are not even strata.
I think he captured it very accurately.
Within 99 years, you have the same full rights as FH to negotiate enbloc at a fraction of enbloc price.
Any changes in potential of the land within 99 years such as removal of height restrictions, surrounding plot ratios, levels allowed, GFA bonus etc, you are entitled to include in your negotiation.
But try to make sure it's concluded before the lease starts to run below 50 years. There will be less negotiation power thereafter although the cheap price makes it more likely for developers to bite.
Please do not mislead people! LH has NO right of a FH
Leasehold - means you lease for that period, that is all!
For owners of 99-years leasehold properties, you lease the land for a period of 99-years from the Government! So you DO NOT OWN the LAND! :tongue3:
That is precisely why at the end of 99-years lease, you MUST return the land to the Government! :pig:
HDB is THE most innovative public housing solution of all governments in history. Kudos to this government.
It wins this accolade hands down; the next most innovative solutions are miles away, pretty much unsighted.
Consider the facts, where else can you find a landlord able to get the following done:
The construction cost of the unit to be leased is completely funded by the tenant
The landlord collects all the rental payments upfront, in one lump sum tax free
The tenant pays for the car parking
The tenant pay the property tax
The tenants pay to upkeep the building estate and other miscellaneous fees
The tenants pay for all the repairs in the rental, including periodic refurbishment due to wear and tear
The landlord retains the right and flexibility to impose condition for subletting
The landlord retains the right to terminate the lease, aka confiscating the flat etc
These can only be achieved by giving a tenant the right of transferability, that is by allowing the lease agreement to be transferred. This is unique for lease agreement, the transferability converted the lease agreement to a marketable instrument. This is actually a beautiful, innovative solution.
The true beneficiary of this arrangement, other than the landlord it is the first generation owners of this kind of lease agreement. A subsequent owner must know how to price the lease agreement properly before buying.
Good attempt. At 36% higher price tag developers won't buy...
Maybe I did not make it clear. I doubt FH sellers will be content to sell at 36% higher if they did own such a large plot. They may be looking at 66% higher.
not maybe, definitely not clear. how did the top statement lead to the bottom statement?
and how did you get the figure of 66%?
and regarding my question:
"is there a difference to the developer paying $600mio (example) to the owners and paying $575mio to owner +25mio (example) to govt to top up lease. both come up to $600 mio. "
and if you think there is a difference, why do you think there is a difference?
Not the most comparable example but usually FH owners will demand much more before they give up their FH ownership.
If the committee aims to sell at FH99 price the number of signatures to be obtained will fail.
The actual premium varies but generally they would want something from 20 to 30% higher, representative of the amount of premium they paid eons ago.
Most FH enbloc that succeed nowadays do so only if they have very few owners.
https://www.google.com.sg/amp/www.asiaone.com/business/amber-parks-third-en-bloc-attempt-fails%3Famp
not maybe, definitely not clear. how did the top statement lead to the bottom statement?
and how did you get the figure of 66%?
and regarding my question:
"is there a difference to the developer paying $600mio (example) to the owners and paying $575mio to owner +25mio (example) to govt to top up lease. both come up to $600 mio. "
and if you think there is a difference, why do you think there is a difference?
The construction cost of the unit to be leased is completely funded by the tenant
No more, now they print money call Bond.
THE Housing & Development Board (HDB) on Friday sold S$1 billion seven-year bonds at 2.50 per cent, amid volatile markets.
Demand for the bonds was lower than expected as HDB has an option to upsize by S$600 million.
"Market was very choppy in the past few days, swinging all over the place," said Clifford Lee, DBS Bank head of fixed income.
The sale was done within two hours in the afternoon, he noted. HDB still has the option to sell the remaining S$600 million later, he said.
http://www.businesstimes.com.sg/government-economy/hdb-sells-s1b-seven-year-bonds-at-250
1 The Housing & Development Board ("HDB") has issued S$1 billion, 7-year Fixed Rate Notes (the “Notes”) under its S$32 billion Multicurrency Medium Term Note ("MTN") Programme.
http://www.hdb.gov.sg/cs/infoweb/press-release/hdb-fixed-rate-notes
No lah, they did not print money, they print paper(electronic) call Bond value at only 32,000,000,000,000. lost count don't know the number of zero correct or not.
Not the most comparable example but usually FH owners will demand much more before they give up their FH ownership.
If the committee aims to sell at FH99 price the number of signatures to be obtained will fail.
The actual premium varies but generally they would want something from 20 to 30% higher, representative of the amount of premium they paid eons ago.
Most FH enbloc that succeed nowadays do so only if they have very few owners.
https://www.google.com.sg/amp/www.asiaone.com/business/amber-parks-third-en-bloc-attempt-fails%3Famp
what happens to this statement
Good attempt. At 36% higher price tag developers won't buy.
...
so will developers buy at 36% higher price tag (if Rio Casa were FH) or not?
the 3rd attempt at asking you this question:
"is there a difference to the developer paying $600mio (example) to the owners and paying $575mio to owner +25mio (example) to govt to top up lease. both come up to $600 mio. "
and if you think there is a difference, why do you think there is a difference?
Case study for analysis:
https://www.google.com.sg/amp/s/kopitiambot.com/2017/05/05/lum-chang-acquires-one-tree-hill-gardens-for-s65m-in-first-en-bloc-deal-this-year/amp/
Got 20% premium or only about 4% above new LH99 land price?
You be the judge.
the article linked didnt say anything about new LH99 land price or 20% premium. It is really hard (for me at least) to make any judgement from the article alone.
do you personally think that there is a 20% premium or only about 4% above new LH99 land price? and which new LH99 land price are you referring to?
i did respond http://forums.condosingapore.com/showthread.php/25719-Leasehold-versus-Freehold-the-Comparison-Continues-(2016)/page26?p=525962#post525962
......
Thus far, no developer has applied to URA after acquiring the land for higher plot ratio because there is really no incentive for developer to do so because the development charges is rather high. There is no additional profits to be made to apply for increase in plot ratio.
....
interesting, applying to Rio Casa's case.
$575mio translates to 575/36811.1/2.1/10.764 = 691psf ppr
$(575+208) translates to 783/36811.1/2.8/10.764 = 706psf ppr
(can somebody crosscheck the figures? like plot ratio.)
perhaps what developer lose in margin (15psf ppr), they more than make up in volume ?
is the 208mio consist wholly of top up lease or does it include increasing plot ratio.
to elaborate more on the volume part,
if margin psf ppr is $100psf@plot ratio 2.1 & $85psf@plot ratio 2.8 ($15psf ppr difference)
for plot ratio 2.1, profit is 100 x 36811.1 x 10.764 x 2.1 = 83.2mio
for plot ratio 2.8, profit is 85 x 36811.1 x 10.764 x 2.8 = 94.3mio (higher profit for plot ratio 2.8)
if margin psf ppr is $60psf@plot ratio 2.1 & $45psf@plot ratio 2.8 ($15psf ppr difference)
for plot ratio 2.1, profit is 60 x 36811.1 x 10.764 x 2.1 = 49.9mio
for plot ratio 2.8, profit is 45 x 36811.1 x 10.764 x 2.8 = 49.9mio (same profit)
if margin psf ppr is $35psf@plot ratio 2.1 & $20psf@plot ratio 2.8 ($15psf ppr difference)
for plot ratio 2.1, profit is 35 x 36811.1 x 10.764 x 2.1 = 29.1mio
for plot ratio 2.8, profit is 20 x 36811.1 x 10.764 x 2.8 = 22.1mio (lower profit for plot ratio 2.8)
can somebody crosscheck, fact check ?
I was merely smoked by Teddy's figure of 36%.
In actuality, FH site owners tend to ask above the 99LH price level substantially, that is why such transactions are generally absent.
When and if FH owners do accept that price level, there is no reason for developers not to jump at the opportunity.
The problem is there is usually a price premium they ask for above that level, which causes enbloc attempts to fail (because owners are unsatisfied) or because the aim was too high (Developers won't buy at those price level).
what happens to this statement
so will developers buy at 36% higher price tag (if Rio Casa were FH) or not?
the 3rd attempt at asking you this question:
"is there a difference to the developer paying $600mio (example) to the owners and paying $575mio to owner +25mio (example) to govt to top up lease. both come up to $600 mio. "
and if you think there is a difference, why do you think there is a difference?
the article linked didnt say anything about new LH99 land price or 20% premium. It is really hard (for me at least) to make any judgement from the article alone.
do you personally think that there is a 20% premium or only about 4% above new LH99 land price? and which new LH99 land price are you referring to?
i did respond http://forums.condosingapore.com/showthread.php/25719-Leasehold-versus-Freehold-the-Comparison-Continues-(2016)/page26?p=525962#post525962
No matter how much they print, it is fine as long as they can take back those 99-years leasehold properties and land (at $0 cost) and recycle back into market.
On one hand they print, on the other hand they take back land assets free of charge........ They can cancel each other..................................
Without doing so, S$ will have fallen to hell! May be we will see S$3 : RM1 (and not S$1 : RM3)! :beaten:
No more, now they print money call Bond.
THE Housing & Development Board (HDB) on Friday sold S$1 billion seven-year bonds at 2.50 per cent, amid volatile markets.
Demand for the bonds was lower than expected as HDB has an option to upsize by S$600 million.
"Market was very choppy in the past few days, swinging all over the place," said Clifford Lee, DBS Bank head of fixed income.
The sale was done within two hours in the afternoon, he noted. HDB still has the option to sell the remaining S$600 million later, he said.
http://www.businesstimes.com.sg/government-economy/hdb-sells-s1b-seven-year-bonds-at-250
1 The Housing & Development Board ("HDB") has issued S$1 billion, 7-year Fixed Rate Notes (the “Notes”) under its S$32 billion Multicurrency Medium Term Note ("MTN") Programme.
http://www.hdb.gov.sg/cs/infoweb/press-release/hdb-fixed-rate-notes
No lah, they did not print money, they print paper(electronic) call Bond value at only 32,000,000,000,000. lost count don't know the number of zero correct or not.
I don't understand why a bond issuance is considered money-printing?
In this case HDB issued a bond, subscribers of the bond paid real money to HDB. Please illustrate which part of it created new money; real or un-real?
You think HDB does not use real money for the coupon payments?
tonymontana
29-05-17, 21:08
I don't understand why a bond issuance is considered money-printing?
In this case HDB issued a bond, subscribers of the bond paid real money to HDB. Please illustrate which part of it created new money; real or un-real?
You think HDB does not use real money for the coupon payments?
Unless MAS is the one buying up all the HDB bonds, perhaps it can be considered some form of "money printing", although not exactly.
Unless MAS is the one buying up all the HDB bonds, perhaps it can be considered some form of "money printing", although not exactly.
Yes.
If MAS used new money (that is, not using the money mopped up from an asset sale in market operation) to buy the HDB bond, then the exercise is money-printing.
So, only Central Banks have the mandate to create new money.
HDB cannot create money as someone here has claimed.
Yes.
If MAS used new money (that is, not using the money mopped up from an asset sale in market operation) to buy the HDB bond, then the exercise is money-printing.
So, only Central Banks have the mandate to create new money.
HDB cannot create money as someone here has claimed.
You are right HDB bonds are not money printing but government bond are money printing, I must be wrong because the two bond on the same type of paper are different.
Government bonds themselves have nothing to do with regulating the money supply. However, central banks may buy or sell government bonds in order to inject liquidity (that is, increase the money supply) into the economy, or to fight inflation (that is, decrease the money supply).
https://www.quora.com/How-do-government-bonds-regulate-money-supply
https://www.youtube.com/watch?v=G_jbOJn_JLg
You are right HDB bonds are not money printing but government bond are money printing, I must be wrong because the two bond on the same type of paper are different.
Government bonds themselves have nothing to do with regulating the money supply. However, central banks may buy or sell government bonds in order to inject liquidity (that is, increase the money supply) into the economy, or to fight inflation (that is, decrease the money supply).
https://www.quora.com/How-do-government-bonds-regulate-money-supply
No.
A bond is a bond, regardless of who is the issuer; the credibility of the issuer determines the grade of the bond. A bond issuance is not money-printing.
You need to be able to understand the difference between MONETARY and FISCAL actions, and see the difference between deficits spending and money-printing.
When a Central Bank buys the government bond, it is not necessarily money-printing also. It is all about intent.
No point harping on money-printing when the basic is not understood.
No.
A bond is a bond, regardless of who is the issuer; the credibility of the issuer determines the grade of the bond. A bond issuance is not money-printing.
You need to be able to understand the difference between MONETARY and FISCAL actions, and see the difference between deficits spending and money-printing.
When a Central Bank buys the government bond, it is not necessarily money-printing also. It is all about intent.
No point harping on money-printing when the basic is not understood.
You are right both print on the same type of paper call Bond, it depends on who buy it.
Same with Paper Money, some are more valuable than others, they are not the same Money.
Small amount only, getting near to 600 billion (600,000,000,000,000) don't know the zero correct of not.
http://www.tablebuilder.singstat.gov.sg/publicfacing/createDataTable.action?refId=5398
https://tradingeconomics.com/singapore/money-supply-m2
https://scontent-amt2-1.xx.fbcdn.net/v/t1.0-9/18765687_10210626165543247_7807883772399078218_n.jpg?oh=4c1ef692b8842bdc0b5ec49aebad75b9&oe=59AC0450
Western political and economic systems differentiate between the government (treasury/ministry of finance) and the central bank (fed reserve/MAS).
The government’s revenue, spending and budget are termed “fiscal”. The central bank’s policy regarding interest rates and money supply are termed “monetary”. They are supposed to be independent i.e. central bank have no obligations to finance the government.
Money printing refers to the central bank financing the government’s budget, to the extent that there is an unusually large increase in the money supply (M0, M1, M2 etc).
In the US, the Fed controls the money supply (close control of M0, looser control of M2) and loosens interest rates through the following mechanism:
- Treasury issues a new short-term bond, to raise money for the fiscal budget, through an auction.
- US banks that are market-making dealers are required to make a bid in the auction. Banks who win the bid passes on money to the government, takes the bond in exchange.
- The Fed then buys the bonds from the banks. Cash is “reinstated” to the banks. This relates to M0.
- Banks may then loan the money to borrowers, who can use it to finance properties, amongst other things. Singapore’ s TDSR is a way to filter the bank-borrower dealings. This relates to M2.
In the above, the government gets more money to spend because of the central bank’s indirect buying. Banks and borrowers also have more M0 to lend and borrow against.
In money printing/QE, the central bank
- Keeps buying the government’s issues of bonds.
- Goes on to buy lower-quality, non-government, long-dated bonds (corporate bonds, mortgage securities) that are newly or previously issued, giving the seller (banks, insurance firms, pension funds) monies.
- Even goes so far as to buy stocks or exchange traded funds directly.
The “money printing” above is intended to place money in the hands of businesses and consumers. The spending of the money will then stimulate the economy.
Such money printing may lead to asset price inflation. However, it does not in itself guarantee it. For example, Japan’s interest rates have been virtually 0 since 1999. Yet there was no property bubble there.
https://tradingeconomics.com/japan/money-supply-m2
https://tradingeconomics.com/japan/interbank-rate
For price inflation to happen, you need the final step to be completed: banks to lend to consumers and businesses, who then spend and invest to boost demand beyond supply. In Europe, banks have been reluctant to lend. In Singapore, TDSR has limited the impact of money printing (MAS does not have an independent interest rate policy, so the external impact of QE filters through) on the housing market.
Western political and economic systems differentiate between the government (treasury/ministry of finance) and the central bank (fed reserve/MAS).
The government’s revenue, spending and budget are termed “fiscal”. The central bank’s policy regarding interest rates and money supply are termed “monetary”. They are supposed to be independent i.e. central bank have no obligations to finance the government.
Money printing refers to the central bank financing the government’s budget, to the extent that there is an unusually large increase in the money supply (M0, M1, M2 etc).
In the US, the Fed controls the money supply (close control of M0, looser control of M2) and loosens interest rates through the following mechanism:
- Treasury issues a new short-term bond, to raise money for the fiscal budget, through an auction.
- US banks that are market-making dealers are required to make a bid in the auction. Banks who win the bid passes on money to the government, takes the bond in exchange.
- The Fed then buys the bonds from the banks. Cash is “reinstated” to the banks. This relates to M0.
- Banks may then loan the money to borrowers, who can use it to finance properties, amongst other things. Singapore’ s TDSR is a way to filter the bank-borrower dealings. This relates to M2.
In the above, the government gets more money to spend because of the central bank’s indirect buying. Banks and borrowers also have more M0 to lend and borrow against.
In money printing/QE, the central bank
- Keeps buying the government’s issues of bonds.
- Goes on to buy lower-quality, non-government, long-dated bonds (corporate bonds, mortgage securities) that are newly or previously issued, giving the seller (banks, insurance firms, pension funds) monies.
- Even goes so far as to buy stocks or exchange traded funds directly.
The “money printing” above is intended to place money in the hands of businesses and consumers. The spending of the money will then stimulate the economy.
Such money printing may lead to asset price inflation. However, it does not in itself guarantee it. For example, Japan’s interest rates have been virtually 0 since 1999. Yet there was no property bubble there.
https://tradingeconomics.com/japan/money-supply-m2
https://tradingeconomics.com/japan/interbank-rate
For price inflation to happen, you need the final step to be completed: banks to lend to consumers and businesses, who then spend and invest to boost demand beyond supply. In Europe, banks have been reluctant to lend. In Singapore, TDSR has limited the impact of money printing (MAS does not have an independent interest rate policy, so the external impact of QE filters through) on the housing market.
Thanks.
The last paragraph worths more than one reading.
In the Landed segment, the price differential between FH and LH is more pronounced than condo or HDB. Partly because a buyer is more aware that he has to price the land, and then the building that sits on the land. Separately. Valuer Aldo does the same way.
In condo or HDB, normally a buyer doesn't do that so consciously. And of course, the land on which the building sits, the title is with MCST and SLA respectively.
I suggest a reading of a report to gain an insight.
https://www.orangetee.com/Research/RED/FreeholdandLeaseholdAnalysis.pdf
One takeaway from OT report, the driver of the bull market last seen in CCR was the Developer land grabs of FH lands in 2006-2007.
This was a far more powerful driver when we compare it with the GLS land grabs today, because it created a cohort of buyers (seller yesterday becomes buyer tomorrow; not vested today is a buyer tomorrow).
In the Landed segment, the price differential between FH and LH is more pronounced than condo or HDB. Partly because a buyer is more aware that he has to price the land, and then the building that sits on the land. Separately. Valuer Aldo does the same way.
In condo or HDB, normally a buyer doesn't do that so consciously. And of course, the land on which the building sits, the title is with MCST and SLA respectively.
I suggest a reading of a report to gain an insight.
https://www.orangetee.com/Research/RED/FreeholdandLeaseholdAnalysis.pdf
perhaps the price differential between FH & LH landed is more pronounced than condo or HDB because
1) there are actual cases of leases of LH landed expiring (Geylang?) whereas there are none yet for LH condo / HDB (SIT?)
2) i think govt more likely allow top-up lease if there are re-development. if no re-developement, like Arcadia, then likely rejected.
so if need re-development to top-up lease, then buyers of LH condo may find comfort in that it is easier to enbloc LH condo. Trying to re-develop/enbloc several adjoining landed is perhaps more tedius and risky to a developer since there is no >80% rule for landed. one example is Haig Court / Haig 162.
3) buyers of HDB think when flats grow old, there will always be SERS/reverse mortgage/lease buy-back. Are there similar schemes for LH landed?
tonymontana
31-05-17, 10:45
**>[Trying to re-develop/enbloc several adjoining landed is perhaps more tedius and risky to a developer since there is no >80% rule for landed. one example is Haig Court / Haig 162. ]
The owner of the bungalow around which haig court was built, Dr. F. P, must have held out against that developer buying up her plot, only to have been cheated by the construction worker of that very same development coming up around her house: such a sad turn of events. god rest her soul. :(
re-looking at the enbloc of One Tree Hill Garden, now that we have benchmark of FH land price (one tree hill garden) at $1664psf, we can calculate land value of LH (one tree hill mansion)
99LH from 1973, so 55 years remaining.
from dc table,
calculation of LH land value is 1664/96% x 77.3% = 1340psf.
so why are there 4 URA caveats One Tree Hill Mansion that are way below the calculated value of the land?
we have to remember that the transacted price of $892psf include BOTH the land & building, whereas calculated value of ONLY the land is $1340psf.
so are the 4 sellers stupid or what? if the excuse is they don't have data for one tree hill garden, they could have use one tree hill residence (FH) data, which seems to be selling for ~$1900psf.
less construction cost $400psf for the residence, that would give an indicative land value of 1500/96% x 77.9% = ~1200psf for one tree hill mansion.
and paying ~1200psf, which includes both land & building, that seems to be a bargain for a buyer when land value itself is ~1200psf, you buy land @1200psf, u get free unit :)
but does the market work that way?
no. i dont think so, that's why there are no transactions at 1200psf.
are the sellers ignorant of mathematics or are there some other reasons for the reluctance of buyers to pay 1200psf for a 55LH property (land&building)?
so to all those who like to spot enbloc properties, do you think one tree hill mansion has good en-bloc potential ?
purchase at $890psf and enbloc at $1340psf.
as to my question posted:
http://forums.condosingapore.com/showthread.php/26488-Bought-new-from-Developer-how-many-years-before-you-let-go-for-LH-99-years?p=525741#post525741
how does a developer calculate? does it calculate forward or backward?
forward calculation means land price + construction cost + profit = selling price (land price determine selling price)
backward calculation means selling price - profit - construction cost = land price (selling price determine land price)
in current market condition, forward calculation (like SC Global) seems to be quite risky to me.
i would think more likely is a developer will look at surrounding properties, their selling prices, from there on work backwards on how much to bid for the land. and since buyers are prepare to pay more for FH, so developer will selling FH at a higher price.
lets say Lum Chang sell the new FH development at $2200psf.
at the same time, another developer XYZ wants to enbloc one tree hill mansion and determines the LH can sell for $2000psf (FH only 10% more expensive).
if XYZ pays the same $1664, (enbloc price $1340psf and top-up lease $324), if construction cost only $200, then Lum Chang earns $336psf (2200-1664-200) and developer XYZ earns $136psf (2000-1664-200)
same amount of work and capital invested (1664+200), different returns. so what does a developer do? perhaps they preferentially enbloc FH.
and if developer XYZ wants to enjoy the same margin as Lum Chang, what will he do, he will be prepared to pay only 1140 psf (2000-324-200-336).
One Tree Hill Garden owner will earn 524psf (1664-1140) or 46% more than One Tree Hill Mansion owner.
I hope that nobody (eg. Ke*****ni) argues that there is a difference between Lum Chang paying $1664psf and developer XYZ paying $1340psf + top-up lease $324, both comes up to $1664
perhaps the price differential between FH & LH landed is more pronounced than condo or HDB because
1) there are actual cases of leases of LH landed expiring (Geylang?) whereas there are none yet for LH condo / HDB (SIT?)
2) i think govt more likely allow top-up lease if there are re-development. if no re-developement, like Arcadia, then likely rejected.
so if need re-development to top-up lease, then buyers of LH condo may find comfort in that it is easier to enbloc LH condo. Trying to re-develop/enbloc several adjoining landed is perhaps more tedius and risky to a developer since there is no >80% rule for landed. one example is Haig Court / Haig 162.
3) buyers of HDB think when flats grow old, there will always be SERS/reverse mortgage/lease buy-back. Are there similar schemes for LH landed?
In the Landed segment, very few buyers are interested in LH. Therefore the demand for those LH standing is very low, this is the market force and it depresses the price of LH vis-a-vis FH naturally.
For a Landed buyer, either he bought it because he likes the building/location, or he likes only the location and plans to tear the building it down to reconstruct. The cost of reconstruction is high, so he better be sure that the new building is going to sit on a FH land (construction can be delayed; he runs out of fund, or his builder has gone missing before construction is completed etc).
For Landed, for an area/estate that is zoned say semi-d, a Developer who manages to buy over the entire area/estate will still have to construct semi-d. So, this has nothing to with whether the area/estate comprises of LH or FH (of course, if it is LH he will run far away first).
All he can leverage on, is to maximise the plot ratio and possibly amalgamation of semi-d plots to build Detached provided the zoning allows. It is a high risk low profit potential venture, not to mention that it is almost impossible to get all the existing owners to sell to him at the same time. However, if the zoning is revised from Landed to Condo then it is a different story all together (because the existing owners want to sell to him in order to profit from the zoning revision haha).
I remember that someone here in the forum has attempted to self develop a Detached estate, maybe he can share his experience.
For reverse mortgage, I supposed that if the property owner wants to do it the bank should have no issue even for LH. It is a business decision of the bank.
For lease-buyback, no the government has no obligation for private property.
Regarding LH condo with expiry:
https://www.theedgeproperty.com.sg/content/perils-owning-ageing-leasehold-properties
re-looking at the enbloc of One Tree Hill Garden, now that we have benchmark of FH land price (one tree hill garden) at $1664psf, we can calculate land value of LH (one tree hill mansion)
99LH from 1973, so 55 years remaining.
from dc table,
calculation of LH land value is 1664/96% x 77.3% = 1340psf.
so why are there 4 URA caveats One Tree Hill Mansion that are way below the calculated value of the land?
we have to remember that the transacted price of $892psf include BOTH the land & building, whereas calculated value of ONLY the land is $1340psf.
so are the 4 sellers stupid or what? if the excuse is they don't have data for one tree hill garden, they could have use one tree hill residence (FH) data, which seems to be selling for ~$1900psf.
less construction cost $400psf for the residence, that would give an indicative land value of 1500/96% x 77.9% = ~1200psf for one tree hill mansion.
and paying ~1200psf, which includes both land & building, that seems to be a bargain for a buyer when land value itself is ~1200psf, you buy land @1200psf, u get free unit :)
but does the market work that way?
no. i dont think so, that's why there are no transactions at 1200psf.
are the sellers ignorant of mathematics or are there some other reasons for the reluctance of buyers to pay 1200psf for a 55LH property (land&building)?
so to all those who like to spot enbloc properties, do you think one tree hill mansion has good en-bloc potential ?
purchase at $890psf and enbloc at $1340psf.
as to my question posted:
http://forums.condosingapore.com/showthread.php/26488-Bought-new-from-Developer-how-many-years-before-you-let-go-for-LH-99-years?p=525741#post525741
how does a developer calculate? does it calculate forward or backward?
forward calculation means land price + construction cost + profit = selling price (land price determine selling price)
backward calculation means selling price - profit - construction cost = land price (selling price determine land price)
in current market condition, forward calculation (like SC Global) seems to be quite risky to me.
i would think more likely is a developer will look at surrounding properties, their selling prices, from there on work backwards on how much to bid for the land. and since buyers are prepare to pay more for FH, so developer will selling FH at a higher price.
lets say Lum Chang sell the new FH development at $2200psf.
at the same time, another developer XYZ wants to enbloc one tree hill mansion and determines the LH can sell for $2000psf (FH only 10% more expensive).
if XYZ pays the same $1664, (enbloc price $1340psf and top-up lease $324), if construction cost only $200, then Lum Chang earns $336psf (2200-1664-200) and developer XYZ earns $136psf (2000-1664-200)
same amount of work and capital invested (1664+200), different returns. so what does a developer do? perhaps they preferentially enbloc FH.
and if developer XYZ wants to enjoy the same margin as Lum Chang, what will he do, he will be prepared to pay only 1140 psf (2000-324-200-336).
One Tree Hill Garden owner will earn 524psf (1664-1140) or 46% more than One Tree Hill Mansion owner.
I hope that nobody (eg. Ke*****ni) argues that there is a difference between Lum Chang paying $1664psf and developer XYZ paying $1340psf + top-up lease $324, both comes up to $1664
It is not easy at all for a layman like us to calculate the potential.
The starting point is to know what is the land size & shape.
From the land size, we know the maximum GFA permissible based on the existing plot ratio.
But the permissible is not necessarily what can be built, we have to look at the land shape. There are more than a handful of building bylaws to comply with, these may interfere the design of the building that can maximise the GFA. Only an architect/QP is able to say for certain.
Never mind, we can assume the maximum GFA can be done; so from here the Developer can apply a $ psf he thinks the market can bite. This is the revenue figure.
The other side is the cost.
We start with the hypothetical cost, we can assume that the baseline cost is 48 units x approx $1.5 mil = $72 mil. This should be the figure if the 48 units are summarily sold in the open market, that is without an enbloc (take note that this is my assumption, and I am not a Developer).
Then we add the DP to top up the lease to 99 years; this rate is not a straight line, the DP increases exponentially toward the end of lease lifespan.
I don't know if there is DC to be incurred to maximise the GFA?
So basically the cost is $72 mil + DP payable + DC payable
Next we add the building cost, say $400 psf x max GFA.
Finally we have the total hypothetical cost ($72 mil + DP payable + DC payable + building cost)
Revenue minus total hypothetical cost = hypothetical gross profit.
I think that only at this juncture the Developer is able to tell how much to negotiate for the enbloc price? Provided that there is a meaningful hypothetical gross profit to start with.
The bottomline is, unless one is close to the dealmakers especially the Developer side, 没门.
It is not easy at all for a layman like us to calculate the potential.
........
The bottomline is, unless one is close to the dealmakers especially the Developer side, 没门.
and regarding LH vs FH ?
In the Landed segment, very few buyers are interested in LH. Therefore the demand for those LH standing is very low, this is the market force and it depresses the price of LH vis-a-vis FH naturally.
.......
yes because of pyschological and technical factors that applies to LH landed vs LH non-landed / HDB.
any numbers to throw around the FH premium between new LH landed and new FH landed ?
for new LH non-landed vs FH non-landed, the FH premium for non-landed has been quoted to range from 10%-20%
and regarding LH vs FH ?
Not sure which part you are referring to.
If you are referring to the example of Lum Chang vs XYZ, mathematically, there is no difference to the seller in getting $1664 psf ppr la.
In reality, I doubt that we can see the same number $1664 psf ppr happening at the same time. Not within time periods that is close. The land rights is simply different.
If there is, one of them has been mis-priced. Do you agree?
Moreover, $1334 psf ppr is incorrectly derived please refer to my last post on DP costing.
yes because of pyschological and technical factors that applies to LH landed vs LH non-landed / HDB.
any numbers to throw around the FH premium between new LH landed and new FH landed ?
for new LH non-landed vs FH non-landed, the FH premium for non-landed has been quoted to range from 10%-20%
For Landed, a buyer has to really know how to price a purchase. There is mis-pricing galore, this is my view.
Why is there a mis-pricing galore?
Because most buyers price by looking at the building, the internal layout etc, in other words the same way how they price a condo; at entry level buyers are more often than not upgraders from condo. The land portion is often forgotten, haha.
Regarding the premium of new LH vs new FH. There is no 'standard' premium that I heard of.
But here is an interesting case study using an example of new FH (Cluster) vs new FH (free standing).
Right now, you can take the price of a Belgravia (Cluster) to buy a new or nearly new FH (free standing), with almost the same build up. The opportunity is there if you look hard enough at the right time.
Now, remember that although Belgravia is FH, it is also a strata meaning that the owner has no direct title to the land.
Price-wise, very little different. Build up maybe the same. TItle rights, big difference.
The general rules for Landed (1) buy only FH (2) Cluster is overpriced; I didn't look at it often but when I did all of them said "over-price".
Not sure which part you are referring to.
If you are referring to the example of Lum Chang vs XYZ, mathematically, there is no difference to the seller in getting $1664 psf ppr la.
In reality, I doubt that we can see the same number $1664 psf ppr happening at the same time. Not within time periods that is close. The land rights is simply different.
If there is, one of them has been mis-priced. Do you agree?
Moreover, $1334 psf ppr is incorrectly derived please refer to my last post on DP costing.
just to correct a little bit, it is "there is no difference to the buyer paying $1664".
Yes unlikely to see same transactions since every property is unique in its own way :)
from the DP table, the market premium of 10% for FH seems to infer that enbloc would be around ~22 years and a premium of FH of 20% would indicate enbloc would be around ~40 years. This is the point at which FH owner would get even with LH owner when enbloc. If enbloc before 40 years, then LH owner would benefit more, after 40 years, FH owner would benefit more
but the LH owners forget that developers want to maintain margin (FH can fetch higher price), so they would press down the LH enbloc price (so enbloc price LH +top up lease < enbloc price FH), that would shift the breakeven point to not 40years, but earlier (perhaps 25years to break even?), if enbloc after 25 years, LH owner would lose out to FH owner.
So is LH owner is over-paying or FH owner is getting a bargain? i would think it depends on when property is en-bloc.
or at the end of the day, perhaps there may be no difference at all, the better rental yield offsetting the reduction in enbloc price LH :)
as for $1334 psf ppr miscalculation, perhaps you can walkthrough the calculations?
Question: With the recent high bids will we see nearby resale condo price up too? Let's say new launch condo plan to sell at $1300psf and is 40% higher than nearby resale condo, will nearby condo prices increase too? If yes by how many percent?
Question: With the recent high bids will we see nearby resale condo price up too? Let's say new launch condo plan to sell at $1300psf and is 40% higher than nearby resale condo, will nearby condo prices increase too? If yes by how many percent?
i am interested to know too. would buyers prefer Martin Place Residence (<10years FH) or Martin Modern (new 99 LH).
going by indicative prices, it seems MM is priced higher than MPR, wow.
just to correct a little bit, it is "there is no difference to the buyer paying $1664".
Yes unlikely to see same transactions since every property is unique in its own way :)
from the DP table, the market premium of 10% for FH seems to infer that enbloc would be around ~22 years and a premium of FH of 20% would indicate enbloc would be around ~40 years. This is the point at which FH owner would get even with LH owner when enbloc. If enbloc before 40 years, then LH owner would benefit more, after 40 years, FH owner would benefit more
but the LH owners forget that developers want to maintain margin (FH can fetch higher price), so they would press down the LH enbloc price (so enbloc price LH +top up lease < enbloc price FH), that would shift the breakeven point to not 40years, but earlier (perhaps 25years to break even?), if enbloc after 25 years, LH owner would lose out to FH owner.
So is LH owner is over-paying or FH owner is getting a bargain? i would think it depends on when property is en-bloc.
or at the end of the day, perhaps there may be no difference at all, the better rental yield offsetting the reduction in enbloc price LH :)
as for $1334 psf ppr miscalculation, perhaps you can walkthrough the calculations?
I mentioned the baseline cost of the land as $72 mil. Why I think that this is the baseline? It is because that is the collective price the owners can get by selling in the open market. This is hypothetical of course, in reality the open market doesn't function that.
What do the developer get based on the hypothetical $72 mil. Nothing but the land, the building will be torn down.
So the developer will have sent for a valuer assessment of the land. If the residual value of the land as assessed is way below the baseline $72 mil, the enbloc prospect clearly diminished unless there is ample room to maximize the GFA.
The other known cost components are all due to the government.
You should realize that the $1664 psf is "ppr"; I have appended the "ppr" which was missing in your earlier posts. By "ppr", it means that the buildable GFA needs to be known in order to calculate.
I am not a developer, that's all the guesswork done.
I didn't comment on the other part, the LH < FH in various scenario etc, and not going to comment because it requires moar guessworks.
I am the kind who look at downside risks first and last, so it has been FH all the while. It is just 10% more, sometimes 0% difference if you look harder, it is not going to change the equation meaningfully.
I mentioned the baseline cost of the land as $72 mil. Why I think that this is the baseline? It is because that is the collective price the owners can get by selling in the open market. This is hypothetical of course, in reality the open market doesn't function that.
What do the developer get based on the hypothetical $72 mil. Nothing but the land, the building will be torn down.
So the developer will have sent for a valuer assessment of the land. If the residual value of the land as assessed is way below the baseline $72 mil, the enbloc prospect clearly diminished unless there is ample room to maximize the GFA.
The other known cost components are all due to the government.
You should realize that the $1664 psf is "ppr"; I have appended the "ppr" which was missing in your earlier posts. By "ppr", it means that the buildable GFA needs to be known in order to calculate.
......
from this article:
https://kopitiambot.com/2017/05/05/lum-chang-acquires-one-tree-hill-gardens-for-s65m-in-first-en-bloc-deal-this-year/
72.8mio is the asking price, 65mio is the transacted price, so why do you take the baseline as 72.8mio ?
the psf paid is 65000000/39063 = ~1664psf
if plot ratio is 1.4, the psf ppr = 1664/1.4 = ~ 1188psf ppr
if plot ratio is 2.1, the psf ppr = 1664/2.1 = ~792psf ppr
if plot ratio is 2.8, the psf ppr = 1664/2.8 = ~594psf ppr
(i did not find out the plot ratio of the land)
am i or are you mixed up in the definiton of psf ppr?
i am damn worried i am getting old, mixing up definitions.
PropVestor
02-06-17, 17:17
For those who looked at the resale market exclusively, it might not be a bad idea to look at the FH market over LH. However, given the micro-location of where it sits, connectivity and the unique design of the building itself, even FH properties nearby might not command that kind of pricing even over time. If its prime land, its prime land, plain and simple. The nearby amenities like MRT interchange is not going to shift anytime soon. Given the perceivable difference in price (subjective since its perceived value is gauge by you and the bank at that point in time) and just looking at the downside risk is simply playing it safe. The investor might end up buying something sub par just because it is FH sitting at a secondary prime location which is fairly matured. What is prime is of course subjective. What some see as trash but be picked up as gold. Works both ways.
I look for future upside in any given location first be it LH or FH. What is the potential for this piece of property and where it will become in the next few years. I believe those who made the most money are those who see 'yet-to-be reality upon current emptiness'. Just like developers who bought land parcels and waiting for developments to happen first. Far East is one of them. Hence, those who buy new properties need to see future upside to surroundings. It must of course meet 2 conditions; Is it a Transformational Project and at right Entry Price (Developer discount). That one and only location (FH or LH does not really matter) where it sits is supremely important coupled with risk mitigation from mentions in the MasterPlan so there is no self imagined reality.
2 cents,
PropVestor
from this article:
https://kopitiambot.com/2017/05/05/lum-chang-acquires-one-tree-hill-gardens-for-s65m-in-first-en-bloc-deal-this-year/
72.8mio is the asking price, 65mio is the transacted price, so why do you take the baseline as 72.8mio ?
the psf paid is 65000000/39063 = ~1664psf
if plot ratio is 1.4, the psf ppr = 1664/1.4 = ~ 1188psf ppr
if plot ratio is 2.1, the psf ppr = 1664/2.1 = ~792psf ppr
if plot ratio is 2.8, the psf ppr = 1664/2.8 = ~594psf ppr
(i did not find out the plot ratio of the land)
am i or are you mixed up in the definiton of psf ppr?
i am damn worried i am getting old, mixing up definitions.
Don't worry, I am the one getting old and didn't verify with the data before commenting. Haha.
So sorry!
This is a Landed enbloc, URA used the land's $psf in all its reporting. $psf ppr for all other enblocs.
from this article:
https://kopitiambot.com/2017/05/05/lum-chang-acquires-one-tree-hill-gardens-for-s65m-in-first-en-bloc-deal-this-year/
72.8mio is the asking price, 65mio is the transacted price, so why do you take the baseline as 72.8mio ?
the psf paid is 65000000/39063 = ~1664psf
if plot ratio is 1.4, the psf ppr = 1664/1.4 = ~ 1188psf ppr
if plot ratio is 2.1, the psf ppr = 1664/2.1 = ~792psf ppr
if plot ratio is 2.8, the psf ppr = 1664/2.8 = ~594psf ppr
(i did not find out the plot ratio of the land)
am i or are you mixed up in the definiton of psf ppr?
i am damn worried i am getting old, mixing up definitions.
So, if we are able to conclude this topic.
The costing done is ALL for OTH Mansion, an APARTMENT estate. The (hypothentical) enbloc pricing should be in $psf PPR.
The costing process is correct; the guessing part is baseline cost for the developer.
$72 mil is calculated by 48 units x $1.5 mil (the rounded last sales transaction recorded in URA Caveat.
(the asking price of OTH Garden was $72.6 mil, it has caused a confusion)
OTH Garden was LANDED estate, the sales price transacted should be in $psf and not $psf PPR.
For those who looked at the resale market exclusively, it might not be a bad idea to look at the FH market over LH. However, given the micro-location of where it sits, connectivity and the unique design of the building itself, even FH properties nearby might not command that kind of pricing even over time. If its prime land, its prime land, plain and simple. The nearby amenities like MRT interchange is not going to shift anytime soon. Given the perceivable difference in price (subjective since its perceived value is gauge by you and the bank at that point in time) and just looking at the downside risk is simply playing it safe. The investor might end up buying something sub par just because it is FH sitting at a secondary prime location which is fairly matured. What is prime is of course subjective. What some see as trash but be picked up as gold. Works both ways.
I look for future upside in any given location first be it LH or FH. What is the potential for this piece of property and where it will become in the next few years. I believe those who made the most money are those who see 'yet-to-be reality upon current emptiness'. Just like developers who bought land parcels and waiting for developments to happen first. Far East is one of them. Hence, those who buy new properties need to see future upside to surroundings. It must of course meet 2 conditions; Is it a Transformational Project and at right Entry Price (Developer discount). That one and only location (FH or LH does not really matter) where it sits is supremely important coupled with risk mitigation from mentions in the MasterPlan so there is no self imagined reality.
2 cents,
PropVestor
Indeed. Value is the main consideration in a purchase.
https://www.theedgeproperty.com.sg/content/how-big-price-premium-do-integrated-developments-command
Not all FH are valuable, similarly not all LH are to be avoided. If there is no underlying value, currently realisable or to be realised (prospect), no point looking further on the price.
So, pricing is basically a process of finding out if the the underlying value matches the asking price.
If underlying value < price, then we have a mis-priced item.
If underlying value > price, then we have a bargain in front of us.
Just to add on, what's of great value to some may be mediocre to others, and vice versa.
For example, via the TDSR, the government has managed to segregate the market (bettet than before) in such a way that different segments of buyers exist. What's of great value in one segment may be unattainable by the other segment. When it's unattainable, it may not command the value that people actually place on it. This is because demand is an aggregate of willingness and ability. And most of our CMs arrest ability rather than willingness to buy.
The same picture exists in car prices and values as well.
Question: With the recent high bids will we see nearby resale condo price up too? Let's say new launch condo plan to sell at $1300psf and is 40% higher than nearby resale condo, will nearby condo prices increase too? If yes by how many percent?
What is the influence of an enbloc to the value of neighbouring properties?
The direct influence is the pricing of the land.
Taken Rio Casa as an example.
The total land cost is $783 mil. If the immediate neighbour's land plot is similar (in size, shape and quality of soil etc) to Rio Casa, the value of that land should be re-rated close to $783 mil also. Then from here we apply the discount based on the lease lifespan to arrive at the residual value. (I am not getting into the detailed calculation, haha)
The enbloc has no influence to the pricing of the neighbour's physical building. How to price that building is another subject requiring a WOT, haha.
Indeed. Value is the main consideration in a purchase.
https://www.theedgeproperty.com.sg/content/how-big-price-premium-do-integrated-developments-command
Not all FH are valuable, similarly not all LH are to be avoided. If there is no underlying value, currently realisable or to be realised (prospect), no point looking further on the price.
So, pricing is basically a process of finding out if the the underlying value matches the asking price.
If underlying value < price, then we have a mis-priced item.
If underlying value > price, then we have a bargain in front of us.
The Value is whether you want your Cash to depreciate with Time or buy property to appreciate with Time.
In property, if you do the right way of levering your risk is minimum. TDSR, LTV.
In Cash confirm you going to lost money over Time. Bank print money MAS control the rate of printing.
Don't believe put your Cash in the Bank, 10 years later go and see what you can buy with the Cash.
tonymontana
03-06-17, 14:52
The Value is whether you want your Cash to depreciate with Time or buy property to appreciate with Time.
In property, if you do the right way of levering your risk is minimum. TDSR, LTV.
In Cash confirm you going to lost money over Time. Bank print money MAS control the rate of printing.
Don't believe put your Cash in the Bank, 10 years later go and see what you can buy with the Cash.
Basically you are right. I know some senior generation they only bought one property for own stay, right now retired 20 years already have to downgrade lifestyle.
But if property crash, you will lose money. So property still have risk.
Basically you are right. I know some senior generation they only bought one property for own stay, right now retired 20 years already have to downgrade lifestyle.
But if property crash, you will lose money. So property still have risk.
It depends on whether after you buy your property you do nothing and just pray everything will be fine.
My Program Manager bought his condo before 1996 when he retired he ask me how to buy HDB because he wants to sell his Condo.
Another bought landed property at 200k, then rent out landed stay in HDB.
Risk increase when you stop learning, refuse to learn and don't want to learn.
I was also one of them until my friend told me he bought a 2 Bedroom FH at Lor 37 for 420k in 2006
To those interested in the mechanics of enbloc, how is the "gross development value of $1.4 bil" calculated?
To calculate, let's assume the developer's GP margin as 10%.
http://www.straitstimes.com/business/property/two-collective-sales-worth-6765m-done
Rio Casa in Hougang Avenue 7 was sold for $575 million to the joint venture firm Oxley-Lian Beng Venture comprising KSH Development, Oxley Holdings, Lian Beng Group and Apricot Capital.
"We received a handful of submissions for Rio Casa; it was hotly contested," said Mr Ian Loh, head of investment and capital markets at Knight Frank, the project's marketing agent. The intention is to apply for the grant of a fresh 99-year lease for the property and to redevelop it, the consortium said in a separate stock exchange filing yesterday.
It would have to fork out a further $208 million in estimated differential premiums for topping up the lease and to develop the site to a gross plot ratio of 2.8. Knight Frank noted that the combined sale price and differential payment translates to a land price of about $706 per sq ft per plot ratio based on the maximum permissible gross floor area of about 1.1 million sq ft.
Rio Casa comprises seven blocks of 286 apartment and maisonette units. Each owner stands to pocket about $2 million from the deal.
"The gross development value for this project is estimated at $1.4 billion and can potentially be redeveloped to build about 1,400 residential units, assuming an average size of 70 sq m per unit," Mr Loh added.
tonymontana
20-06-17, 23:01
And as if to provide people here with an answer, here is what SLA is doing to some expiring lease houses, the first residential properties in singapore where lease is expiring.
http://www.channelnewsasia.com/news/singapore/i-don-t-know-where-i-can-move-to-lorong-3-geylang-homeowners-8961922
Not sure whether these people still staying put because they believe the myth or some people's propoganda that their leasehold properties will always get enbloc and hence have great value as leases getting expired?
And as if to provide people here with an answer, here is what SLA is doing to some expiring lease houses, the first residential properties in singapore where lease is expiring.
http://www.channelnewsasia.com/news/singapore/i-don-t-know-where-i-can-move-to-lorong-3-geylang-homeowners-8961922
It merely informs that it is disadvantageous to start with a 60 year lease if the intention is ultimately to hope for enbloc.
Similarly, we can see that Hillford may not live to see the days of enbloc.
For a building that has only 60 years lease at the start, during the first 20-30 years, people will be happy to live in a relatively new building. But when they want to sell, there are only 30 years of lease left. 30 years left means no loan allowed if sell to individuals, and sell via enbloc will need huge top up, unless Govt allows top up to 60 years. This is still fine if the intention is to live in the building till death within another 30 years later.
Starting with 90-99 years, the story is vastly different. When you have built a family and lived out your most productive years from 90-99 years, there is still 60-70 years' lease left. There may be a second owner who does not mind buying 30 years later, not to mention the potential for subsequent enbloc to renew the building. So far developers have shown that they are willing to top up if the asking sum is not too high to begin with.
Not sure whether these people still staying put because they believe the myth or some people's propoganda that their leasehold properties will always get enbloc and hence have great value as leases getting expired?
anythingwhatever
20-06-17, 23:55
Not sure whether these people still staying put because they believe the myth or some people's propoganda that their leasehold properties will always get enbloc and hence have great value as leases getting expired?
To begin with, these are not Private Leasehold with En-bloc Potential... :)
tonymontana
21-06-17, 00:06
Not sure whether these people still staying put because they believe the myth or some people's propoganda that their leasehold properties will always get enbloc and hence have great value as leases getting expired?
actually poor thing , those who have stayed there for a long time. hope they get some option & grant to purchase back the HDB that is gonna be built there .
ah bear, i think there are myriad possible outcome to different cases in question.
toodles.
Actually it will be more interesting to see when the time comes when high rise HDB in the heartlands reach the 99 year lease and hundreds of families are affected, what the decision will be.
At this juncture, as they are public housing and affect millions actually, it is not difficult to imagine buying over (SERS) before lease runs out and replacing with 60 years leasehold HDBs to allow to cash out partially via downgrading.
Actually it will be more interesting to see when the time comes when high rise HDB in the heartlands reach the 99 year lease and hundreds of families are affected, what the decision will be.
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