Is buying 99yrs leasehold private condo a bad investment?

[Sgnick]

Looking at the resale market, and considering buying condo that is 8-9 years old this year. Is for staying and not renting.

 

Is this a bad investment? Some people tell me never buy 99 years condo. Say next time cannot sell. Is this true?

 

Let's say i buy a 9 years old condo $600K, and stay for 15 years. It will be 24 years old by then.

 

Can it be sold then or too old to sell? What about the value? Will it drop significantly because it's so old and leasehold? How significant a drop, 1/2 price, 1/4 price? What if there's a property boom then, possible for it to retain it's value?

 

 

[Throttle2]

for leasehold apartments, very much more depends on the location and site in terms of resale.

much more than freehold ones.

 

all things equal and considering no boom nor slump in economy, 24yr old leasehold will not hold value as much as freehold.that is just common sense.

and becos of that, it is not so demanded as it ages.

 

never buy something thinking only of upside. be realistic and assess honestly.

 

99yr leasehold is good as an investment in the hot areas.

the ROE will be higher simply becos the price to buy is cheaper yet the rent is not.

leashold or freehold has no impact on rental.

so to buy leasehold properties looking for rental returns , just make sure location is solid.

 

as for buying to stay, there are other considerations. a lot more than just monetary values

if money is seriously your only main consideration, then maybe you cant really afford to stay there.

 

my personal view is for properties to generally fall another 25% at least.

I'm looking at freehold in D9 at $800psf.

thats my target.

 

 

Edited January 24, 2009 by Throttle2

[Doosan]

old rule:

 

you cant bagai your own hardearned $$$ in ur CPF to buy any 99yr leasehold pte property which has less than 75yrs of lease, most likely commercial banks wud oso turn u down not to pinjam $$$ for u to buy.

 

e.g: 9yrs + 15yrs=24+developing process 2-3yrs, it is oredi 26/27yrs of age.

 

lets say over tis 15yrs, good economy, property $ escalate to $9OOk or even more...........

if i hv tat $9OOk imay as well go n buy newer unit, or younger age leasehold.

 

new rule:

 

sorry i dont know, sorry if my infors r salah leh.............Gong Xi Fa Cai every body..........

[Sgnick]

Thanks for reply. Condo ownership in Spore have gone up the past decade. What's going to happen to these 99 years condos when they get older and older? What's going to happen to the owners who owns old condos?

 

HDB is also 99years, but we see almost 20years old flats bought $70K new from HDB, few years ago selling for 200K, now selling for 300K. And they are selling like hotcakes, even the old HDB flats. Why can't the same thing that happen to HDB falts happen to condos, where prices become 3x or 4x even when it gets older and older? Why is everyone saying condo price gets lower with time?

[Sstarmax]

Hi Bro, HDB is for mass market. The demand is always there as prices are considered affordable. Prices are very stable as compared to Private condo. Most speculators will buy private to speculate and make big bucks. For HDB, prices are very stable as not many people are keen to buy to speculate. It is more of a necessity for HDB folks.

 

Hope this answer yr questions.

[Will_I_Am]

Coz HDB got government support mah. Things like grant for those staying near parents, subsidized loan etc , makes it a lot easier for pple to buy.

 

Also, HDB property tax 4% versus private 10%. HDB dwellers got government handouts in bad times, private none.

 

 

 

Thanks for reply. Condo ownership in Spore have gone up the past decade. What's going to happen to these 99 years condos when they get older and older? What's going to happen to the owners who owns old condos?

 

HDB is also 99years, but we see almost 20years old flats bought $70K new from HDB, few years ago selling for 200K, now selling for 300K. And they are selling like hotcakes, even the old HDB flats. Why can't the same thing that happen to HDB falts happen to condos, where prices become 3x or 4x even when it gets older and older? Why is everyone saying condo price gets lower with time?

Edited January 24, 2009 by Mazda_mad

[Shull]

for 99yrs leasehold..chances are, some developers will come in and en-block even before it his it's 50th year..if you buy when property prices are low, chances are, you can make a tidy sum during en-block..

[Sgnick]

Isn't HDB pricing (new and resale) tied closely to private pricing?

 

Otherwise if HDB due to lower tax, grants, govt support, price stability, etc continue to rise, and condo price continue to fall, then 10-15 years later condo become cheaper then HDB, possible? If this scenario do happen one day in future, a condo and HDB side by side, same size, same location, both 20 years old, and condo selling $100K cheaper, you will buy which one?

Edited January 24, 2009 by Sgnick

[Sgnick]

for 99yrs leasehold..chances are, some developers will come in and en-block even before it his it's 50th year..if you buy when property prices are low, chances are, you can make a tidy sum during en-block..

 

That's what I thought too, price go up with time, property boom, enbloc.

 

Property price, regardless HDB or 99years private, should rise over time, due to inflation and lesser available land in spore. So how can HDB price double/triple and yet 99year condo price depreciate over time? Overpriced HDB vs cheaper condos' with facilities, that'll be the day, lol :)

 

But the 25years CPF ruling is the killer. Hope they change that ruling before the current batch of condos becomes unsellable in future.

[Throttle2]

That again could simply be wishful thinking, and highly speculative Shull.

 

there is no guarantee that developers will buy or the sellers will sell.

chances are 50% - 50% at best

 

ultimately it's difficult to make money with one property, unless he risk his primary roof.

 

[Throttle2]

Isn't HDB pricing (new and resale) tied closely to private pricing?

 

Otherwise if HDB due to lower tax, grants, govt support, price stability, etc continue to rise, and condo price continue to fall, then 10-15 years later condo become cheaper then HDB, possible? If this scenario do happen one day in future, a condo and HDB side by side, same size, same location, both 20 years old, and condo selling $100K cheaper, you will buy which one?

 

and your point is?

 

[Sgnick]

and your point is?

 

Sorry, a lot of babbling but never make my point earlier.

 

My point is again back to the thread topic, 99years private bad investment? Cos if HDB can up and up (with a few downs in between, like now) and is considered a good buy, why leasehold private is bad buy? leasehold private really is downtrend over time?

 

Because got people tell me, dont buy leasehold private is very dangerous old liao cannot sell and lose value, get HDB instead. So i wondering why is it like that and if that is true?

 

As for affordability, I can definitely afford either comfortably. Is just that people are warning me against leasehold private so I am just being prudent and seeking further opinions.

 

Also thank you for your advise on location, yes, location is a priority for me, definitely must be near local amenities and MRT station.

Edited January 24, 2009 by Sgnick

[Throttle2]

nearing amenities and MRT is not the only things to look out for in terms of location.

 

many people mixed up location with site.

 

location should refer to the district and thus forms the base price.

site refers to the actual environment at the location and forms the add-on price

 

total price is made up of base price + add-on price.

that is my personal formula, i invented it but you are free to use it.

 

in another thread on landed property, i discussed about the add on price factors. perhaps you may want to visit that thread to have more info.

 

 

 

[Ultramega]

Good formula. Are you in the property industry?

[Califonia]

IMO, its about location, location and location.

in 2005, some good location LH condo going at $300psf could reach a whopping $800psf in 2007.

 

If this is going to be your only live-in property, you may not enjoy any gain when prices shot up.

 

For investment, you need to have at least 2 pte property so you can take advantage when economy picks up.

 

We live in a LH unit. Sold 1 last year and now rented out another FH unit.

 

Again, buying from resale market is not yet practical. Look at the papers and you will realised seller are asking ridiculars pricing.

[Galantspeedz]

I have to disagree that though it is much easier with 2 properties but it can still be done with 1.

 

location, amentites, ease of transport etc is also important especially for rental

[Galantspeedz]

He wipes table for a living

[Yoongf]

Times are different now, but many ppl are still talking about old thinking.

 

CPF funding is now pegged to balance 60 year lease instead of 75 yrs.

 

http://ask-us.cpf.gov.sg/explorefaq.asp?category=23098

 

Leasehold property last time nobody try to enbloc, but 2 yrs ago.. several 99 yr properties managed to get enbloc and lease topped up.

 

There is really no basis to compare between HDB and leasehold condo living. Both cater to different and very distinct lifestyles. Among these 2 options, there is no obvious better choice, as what is food may be another's poison. Is really subjective to what kind of environment a person want to live. HDB offers substantial cost savings, which many ppl fail to appreciate until go live in private property. Is a question of cost vs exclusitivity.