Land a house for under $1 million

http://www.straitstimes.com/Invest/S...ry_355881.html

March 29, 2009

property

Land a house for under $1 million

But be prepared to compromise on location, condition, size and lease tenure

By Joyce Teo, Property Correspondent

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A house to be auctioned in Jalan Mesra in MacPherson has a guide price of $800,000 to $900,000. -- PHOTO: KNIGHT FRANK

A landed home for less than $1 million? To many, a landed property is both a desirable dream home and the ultimate - yet unaffordable - status symbol.

So they steer clear of looking for one, thinking they would never be able to afford it anyway.

But while the landed market is often less accessible than the condominium market, there are houses out there pegged below $1million.

Potential buyers just have to be prepared to look hard as their choices are limited, property experts say.

Also, these houses may sit on a small piece of land or be in relatively poor condition.

'If your budget is below $1million, expect to compromise on the location, size and condition of the house,' said HSR Property Group executive director Eric Cheng.

'It can be fun for a person who likes DIY, as you can really do up the house. But you have to take into account the renovation costs,' he added.

Where to look

First of all, rule out the central areas of districts 9, 10 and 11. Much of the coveted residential districts of 15 and 16 will also be out of reach, said managing director of RealStar Premier Property Consultant, Mr William Wong.

Buyers should look at areas in the north-east such as Hougang and Serangoon, he said.

There may also be opportunities in Upper Thomson and Sembawang, said Knight Frank auctioneer Mary Sai.

Mr Cheng said there are small single-storey terrace houses in Upper Thomson going for below $1million, though there is no parking space in front of these homes.

Other areas with houses below $1million include Jalan Gembira in MacPherson, Telok Kurau, Loyang Villas in Loyang and Sin Ming Walk, he said.

Aside from leasehold homes, freehold ones below $1million can also be found.

However, it is almost impossible to find a bungalow at those prices. Semi-detached houses and corner terrace units are also unlikely candidates, leaving buyers with just mid-terrace units, said Mr Wong.

Apart from the resale market, the auction market may from time to time offer some affordable landed home buys.

Property consultancy Knight Frank said it will have one freehold terrace house available for auction next month at under $1million.

With an indicative price of about $800,000 to $900,000, it is an old, narrow, two-storey terrace house sitting on 1,300sqft of land at 7 Jalan Mesra in MacPherson.

Some houses in the area were going for $700,000 to $800,000 a few years ago, before a run-up in property prices, with up to around $1million for a nicely-renovated one during the 2007 boom, said Ms Sai.

Recent deals in that area included one for a unit in Jalan Setia, with a land area of 885sqft, which went for $850,000 in November.

Atypical houses

There are also a few areas with unusual landed homes costing way below $1million.

The Housing Board itself has 285 leasehold landed flats in Whampoa and along Stirling Road in Queenstown. These 99-year units were built in the 1970s by the Singapore Improvement Trust, the predecessor of the HDB.

Relatively small houses sitting on varying plots from just under 1,000sqft, can go for around $500,000 to $700,000, said Mr Cheng.

Such mid-terrace units are rather narrow, considering a typical mid-terrace unit sits on at least 1,600sqft of land, he said.

Then, there are houses with extremely short leases. Banks are not keen to offer loans for such properties, so buyers have to pay cash.

In Lorong 3 Geylang, for instance, run-down terrace houses can go for around $150,000. One such unit, with a land area of just 725sqft and a built-up area of about 1,300sqft, sold for half that sum last year. It had just 11 years left on the lease.

During the last boom, the landed homes sector was a laggard compared to non-landed homes. Because landed home prices have not risen as steeply or as fast as condominiums, their fall will not be as hard, experts say.

The most recent official data shows that landed home prices fell by 4.8per cent in the fourth quarter of last year.

Going forward, Realstar's Mr Wong projects that landed home prices could fall by another 10 per cent this year.

While sellers may dither over acting now or sitting tight, this is good news for buyers with a tight budget looking for landed homes.

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