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Thread: Some Condos Age Well, Most Don''t...

  1. #31
    Unregistered Guest

    Default Re: Some Condos Age Well, Most Don''t...

    [QUOTE=Unregistered]
    Quote Originally Posted by Unregistered
    Who is picking a fight here? Please reread my posting above. In no way a normal person will find it offensive. Not everyone believes that every old property can be enbloced forever. You may take a different view, fine. I would suggest if you cannot swallow alternative views, then don't read. And I believe my post was a lot more polite than yours.

    I despise people who call names and say things without basis. Why did you call me a sour grape that lost out on the enbloc frenzy? On what basis? This is totally uncalled for! Please take a step back and re-read your posts vs mine, for God's sake.



    He is the Resident of IMH.

    Dear Friend,

    I have read your reply and the full text of the first writer's post, and it was you who accused the first writer thereby attracting his response. You should be the one to step back and re-read your own posts, for God's and your own sake.

    Do not insult us, the reading public, that we cannot tell black from white.

  2. #32
    Unregistered Guest

    Default Re: Some Condos Age Well, Most Don''t...

    Quote 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.

    I respect your opinion, but allow me to point out the shortfall in your conclusion.

    Yes, the first owner may not have the funds to rebuild, or his children or grandchildren might not even want to stay in Singapore and therefore couldn't care less. Agreed.

    But he can always sell it to someone else wanting the location and can afford to rebuild the house or estate and because it is freehold, the new buyer can get financing from a bank increasing the marketability of the plot.

    I do not like to cook up stories, or pluck things from the air, but all my postings in this thread are factual. Read my other post on Lakeside Tower and Lakeside Apartment in Jurong, a former JTC executive apartment estate.

    When LT and LA's leases were left with just 67 years, their market value fell even below the newer HDB apartments in the same neighbourhood. It is a fact we cannot dispute, and definitely not a theory as you suggest. Banks were reluctant to lend and those (usually the foreign banks) were willing to lend, the interest rates were much higher because it was then a general policy that mortgage properties must have at least 60 years left AT THE END OF THE MORTGAGE, not the start.

    Thus, housing loans for a new 99-year estate can go as long as 30 years (the maximum period), but if the lease has only 70 years left, the max. loan period was only 10 years, not even 15. This policy was under review, may have be changed to 50 years; need to check. Of course, we assume that the borrower is young and meet all the other criteria.

    Incidentally, you may like to know that most banks refused to grant loans for Geylang properties (the red light district), especially those in the Lorong 12 stretch! If you don't have women in your family, and have the cash, you can grap some really cheap properties there.

    Regards.

  3. #33
    Unregistered Guest

    Default Re: Some Condos Age Well, Most Don''t...

    Quote Originally Posted by Unregistered
    Hi guys, I see that both sides are knowledgeable, equally eloquent and presents well argued positions on leasehold vs freehold properties. SLA website has some information regarding how leasehold land is valued with respect to freehold land, which showed a fractional relationship that exists:

    http://www.sla.gov.sg/htm/ser/ser0204.htm

    http://www.sla.gov.sg/doc/ser/THE_DI...Appendix_1.pdf

    I thought it interesting that leasehold land value is actually very well preserved even up to 40-50 years in the eyes of the government (valued at 70-75% of freehold equivalent land with remaining 50-60 years tenure). This leads me to believe that as long as a leasehold condo is not older than 40 years, there is really nothing much to worry about. What are your views?

    It seems to me also that the number of freehold condos being launch in recent years are on the rise. This makes me feel uneasy about the premium that's being charged versus a leasehold condo (in the range of 30%?). What do you think a fair premium should be (let's say in a hypothetical example where two new condos, one a leasehold and the other freehold, are standing side by side)?

    Hope to get some quality answers from both sides with good logic, not useless responses like "FH is forever, leasehold got time expiry". Thank you.

    You are free to express your views, but to run down other peoples' opinion with your statement ".... not useless responses like "FH is forever, leasehold got time expiry", is uncalled for and degrates your own dignity.

    The fact is you are off the mark by focussing only on the owner-occupation concept vs the investment aspect of the property.

    In a FH property, the premium is actually the investment element because you pay more and will expect more when you sell your property; a FH buyer is looking at upgrading in future by selling his first property and buying a bigger or better one. This is not usually the case with LH properties, especially those with diminishing leases.

    You are perfectly correct if you look purely from the occupational aspect and this is exactly what China PRC is doing: only 70 year leases, not even 99 yrs

    The occupational theory is that the "buyer" of the land is not likely to be younger than 20 years old and with life expectancy not exceeding 90, 70 year leases were enough for his lifetime occupation.

    I was told that in Australia, residential properties are all FH, no LH. Anyone knowledgeable about Australia can confirm? Thanks

  4. #34
    Unregistered Guest

    Default Re: Some Condos Age Well, Most Don''t...

    Quote Originally Posted by Unregistered
    ahahaha.. so naive u all.. i 13 yr old oso know better la..

    lease hold and free hold are just imaginary terms.. all in ur head.. 99 years? tell me which one govt has lasted 99 years?

    What has the lifespan of a govt got to do with property lifespan?

    You might as well compare with the lifespan of a fly or mosquito!

    Please be constructive in your posting; don't insult your readers. If you have nothing better to do, go and jump into the sea for a swim; don't sia suay yourself by writing nonsense here.

  5. #35
    Unregistered Guest

    Default Re: Some Condos Age Well, Most Don''t...

    Quote Originally Posted by Unregistered
    "I thought it interesting that leasehold land value is actually very well preserved even up to 40-50 years in the eyes of the government (valued at 70-75% of freehold equivalent land with remaining 50-60 years tenure). This leads me to believe that as long as a leasehold condo is not older than 40 years, there is really nothing much to worry about. What are your views?

    It seems to me also that the number of freehold condos being launch in recent years are on the rise. This makes me feel uneasy about the premium that's being charged versus a leasehold condo (in the range of 30%?). What do you think a fair premium should be (let's say in a hypothetical example where two new condos, one a leasehold and the other freehold, are standing side by side)?

    Hope to get some quality answers from both sides with good logic, not useless responses like "FH is forever, leasehold got time expiry". Thank you."


    Personally I think people get too hung up over the terms freehold and leasehold. Since freehold suggests forever and leasehold has a finite sound to it, I guess people automatically assume that there should be a premium for freehold properties. When I buy a piece of property, either I will live in it or I'll rent it out. Either way, PEOPLE will have to live in it. I think when PEOPLE judge a piece of property they will live in, they will look at criteria such as location, its physical appearance, quality of the finishing, maybe reputation of the builder, reputation of the developer, and so on. To me, all of these criteria contribute to the value of the property. Unless there is evidence showing that developers use better raw materials, hire better designers (and this is subjective), and generally build better products in freehold projects, why should I differentiate condos based on freehold and leasehold? On a side note, a real estate agent told me last year that she actually thought some developers would use inferior material for freehold projects because they felt freehold units would sell no matter what, and that buyers wold have to be enticed to buy leasehold properties so they use better material (freehold owners don't get mad, this is just an agent's point of view).

    Whether freehold or leasehold, a condo will eventually become old. I think this is the true cause of declining property value, not the lease terms. Even if a person intends to retain ownership of a freehold unit "forever," and intends to exercise control over his share of the land for as long as he can, I think there will be too many uncertainties and external factors down the road that will prevent him from doing so. Therefore I don't think I will pay a premium in exchange for a right that I probably will not put to good use.[/QUOTE]


    "Agree" with you, and we need more people like you, otherwise everybody goes for FH properties and we owners of LH properties will have to jump down from CPF building!

    Understand govt is proposing even shorter leases -- 30 years and a site was allocated for such a development meant for retirees. Anyone has any information on the 30-year lease? Considering one for my retirement.

  6. #36
    Unregistered Guest

    Default Re: Some Condos Age Well, Most Don''t...

    Freehold and leasehold refers to the land, not the physical building itself.

    When you buy a house, based on your purchase price, potentially:
    50% will be for land cost.
    25% will be for construction cost (it used to be lower...)
    and remaning 25% is the developer's financing cost and profits.

    (The above are mere estimates based on the greedy developers who tried to enbloc my condo...)

    So, for the 50% that goes into the land price, if it is leashold, then this amount will fully diminish after 95 years (95 years because that is usually the duration left when the developer handles the key to you.)

    If it is freehold, then even after 100 years, the land is still yours and probably, by then, the price of land wil be 3x or 4x, and plot ratios would have been revised upwards etc.

    The price of leasehold property does not depreciate slowly over the entire 95 years, the reduction is significant after the 10th year (when it is no longer attractive to potential tenants) and especially so after 30 years because of restrictions imposed by banks and CPF.

    I think Farrer Court en-bloc is an exception. Before Farrer Court, a lot of old leasehold properties were selling for peanuts, e.g. Thomson View, Braddell Heights. The price has shot up by more than twice, because of expectation of en-bloc.

    But in my honest opinion, en-bloc is dead and value of old leasehold properties will drop back to near where they should be.

    Besides, government is so quick to release 99-year leasehold land when the market is hot, so why wil developer want to buy from en-bloc owners and subject themselves to lengthy wait, uncertainty, and possible lawsuits with the CEO appearing in court to say, "I have never sued anyone before and I do not wish that this will be my first case..."


    Quote Originally Posted by Unregistered
    Personally I think people get too hung up over the terms freehold and leasehold. Since freehold suggests forever and leasehold has a finite sound to it, I guess people automatically assume that there should be a premium for freehold properties. When I buy a piece of property, either I will live in it or I'll rent it out. Either way, PEOPLE will have to live in it. I think when PEOPLE judge a piece of property they will live in, they will look at criteria such as location, its physical appearance, quality of the finishing, maybe reputation of the builder, reputation of the developer, and so on. To me, all of these criteria contribute to the value of the property. Unless there is evidence showing that developers use better raw materials, hire better designers (and this is subjective), and generally build better products in freehold projects, why should I differentiate condos based on freehold and leasehold? On a side note, a real estate agent told me last year that she actually thought some developers would use inferior material for freehold projects because they felt freehold units would sell no matter what, and that buyers wold have to be enticed to buy leasehold properties so they use better material (freehold owners don't get mad, this is just an agent's point of view).

    Whether freehold or leasehold, a condo will eventually become old. I think this is the true cause of declining property value, not the lease terms. Even if a person intends to retain ownership of a freehold unit "forever," and intends to exercise control over his share of the land for as long as he can, I think there will be too many uncertainties and external factors down the road that will prevent him from doing so. Therefore I don't think I will pay a premium in exchange for a right that I probably will not put to good use.

    "Agree" with you, and we need more people like you, otherwise everybody goes for FH properties and we owners of LH properties will have to jump down from CPF building!

    Understand govt is proposing even shorter leases -- 30 years and a site was allocated for such a development meant for retirees. Anyone has any information on the 30-year lease? Considering one for my retirement.[/QUOTE]

  7. #37
    Unregistered Guest

    Default Re: Some Condos Age Well, Most Don''t...

    ?? Not sure you're talking about since everyone has no name but anyway, I hope people should stop calling names, for example just because someone says enbloc is not forever may not be a sour person who just miss out on an enbloc - very unprofessional to say such things right? Stating opinions is fine but no name calling please. That would make this forum a nicer place [QUOTE=Unregistered]
    Quote Originally Posted by Unregistered


    Dear Friend,

    I have read your reply and the full text of the first writer's post, and it was you who accused the first writer thereby attracting his response. You should be the one to step back and re-read your own posts, for God's and your own sake.

    Do not insult us, the reading public, that we cannot tell black from white.

  8. #38
    Unregistered Guest

    Default Re: Some Condos Age Well, Most Don''t...

    I think Singapore should learn to appreciate its history and stop tearing down every buildings for redevelopment after say 20 years. I'm not in favour of redeveloping buildings that quickly and chasing passing trends. Buildings can be preserved for more than 50 years - that is for sure. In fact, there was an article written by some architect in ST not too long ago and they were saying that the condos here can last hundreds of years - no sweat Nowhere is the world are buildings torn down and redevelop at such an alarming pace - time to slow down sometimes.

    Quote Originally Posted by Unregistered
    Actually I don't think any condo is designed to last for more than 40-50 years, which is why I find some Singaporeans' insistence on distinguishing leasehold condos from freehold condos so puzzling - sooner or later the building will age and become obsolete, freehold or leasehold. I'd bet at least 50% of all the condos standing in Singapore right now will not be there 50 years from now. Did your neighbourhood look the same in 1958 as it did now?

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