Originally Posted by
Unregistered
"Although buildings are designed to last about 50 years, good maintenance can prolong a building to easily 100 years and with conservation techniques, almost indefinitely."
"But the leases are NOT for the buildings, per se, but for the LAND. In other words, if your condo is built on freehold land, then you can always tear down the buildings and rebuild it anytime you want, whether 50 years later, 30 years later or even 10 years later if you (and your neighbours) have the funds and want a change of style, e.g. from a Spanish Villa to a Hawaiian theme or a Cottage one."
"Also, if your condo is leasehold and when you pass the half-way mark, the market value will start to decline while your neighbour, a freehold property, may be enjoying the boom. Also banks don't lend to condos with less than 50 years remaining lease."
My view:
While this may or may not be true (I'm not in the construction line so I don't know), unless a building is really aesthetically pleasing or has some obvious historical value, I don't think every building needs to be conserved beyond its period for safe occupation. I understand that freehold supposedly means you own a piece of that land forever, and yes, in theory, the owners can do anything, make any changes to their collective property anytime in the future. But in reality, how likely is that to happen? How financially viable will it be for the owners to repair a decaying building? or tear it down and rebuild it? Will it be worth it? Even if all the owners have the financial clout and the willingness to fork out more money, how likely is it that everyone will agree on doing the same changes? So, while a freehold property 40 years after its TOP date MIGHT have more percevied market value than a leasehold property of the same age, if a new buyer has to spend a fortune just to make the building habitable again, wouldn't it be easier to buy a brand new leasehold property, or any new property? Some of my friends operate on the romantic notion that they can leave this piece of property to their children. Why do we assume that our children will want it? why do we assume that they will want to live in the same neighbourhood? So, an owner of a piece of freehold property CAN own a share of that land forever, but unless he and his future generations have the money and willingness to revitalize decaying buildings every 40 or 50 years, and get every other owner to act in unison (this might be the toughest challenge) it just sounds good in theory. This is why I think the perceived advantages of freehold properties over leasehold properties are vastly overstated and overrated.