Landed - selling price much higher than caveat lodged txn

[Ct3833]

recently did a research for interest purpose . I noticed the selling price per sqft of a landed property is far higher than the price recorded in the caveat lodged transactions in the same area. This phenomenon  is common across all disct.  While it is understandable that there is no easy way to compare per sqft price of landed property from one to another due to the build-up/land ratio, reno quality and the property condition etc. But even the per sqft price of hose very poor condition units that would require a massive reno if not a A&A are higher than average transacted price.  Wonder how a landed sales/purchase is negotiated?  Any experts who could kindly shed some lights would be much appreciated. 

 

[Cosmicclaw]

All things equal, the price of landed property, especially terrace and Semi D, does not command a premium as compared to condos with equivalent floor area in similar area etc. And this is due to limited buyers as foreigners are not allowed to buy. With the small pool of buyers, prices have not gone up as much as many condos in recent years.    

[Showster]

I think he is comparing caveated landed with landed on sale.

 

There is no easy answer - I think ask our in house expert T2 better.

[Throttle2]

recently did a research for interest purpose . I noticed the selling price per sqft of a landed property is far higher than the price recorded in the caveat lodged transactions in the same area. This phenomenon is common across all disct. While it is understandable that there is no easy way to compare per sqft price of landed property from one to another due to the build-up/land ratio, reno quality and the property condition etc. But even the per sqft price of hose very poor condition units that would require a massive reno if not a A&A are higher than average transacted price. Wonder how a landed sales/purchase is negotiated? Any experts who could kindly shed some lights would be much appreciated.

Caveats for landed properties is lodged base on psf of Land not GFA.

 

So if the land is 3000sft and caveat lodged is $3mil, it is likely that the property is in a basic condition probably original condition.

 

So you may find a caveat of $4mil lodged for a 2500sft landed, its likely that the property has been rebuilt and the GFA is probably at least 3000sf.

 

Cheers

[Yoongf]

Lets take a 2000 sqft inter terr as an example. Original condition hse is valued at the land cost.. Say 1000 psf, so 2mil listed price. To reconstruct the same house is easily 1mil, so any brand new hse sold will be easily 3mil or 1500 psf.

[F355]

It works both ways , the selling price can be much higher or much lower than what you see in the caveat lodged , cos its based on psf land area and does not take into consideration the condition of the property.

 

Other factors that affects the psf land price are for eg ;

 

If its a corner terrace with big piece of land , psf transacted will be lower

The transaction may be within family members eg father to son hence the psf transacted will be lower

Some buyer simply likes the house for some reason maybe fengshui  and willing to pay premium so psf higher

Some buyers see their neighbour want to sell , he wants to buy it for his children so willing to pay premium so the psf will be higher

Some house has undesireble numbers like 14 hence psf lower

Some face road T junction psf lower

 

Etc etc .

[Ct3833]

It works both ways , the selling price can be much higher or much lower than what you see in the caveat lodged , cos its based on psf land area and does not take into consideration the condition of the property.

 

Other factors that affects the psf land price are for eg ;

 

If its a corner terrace with big piece of land , psf transacted will be lower

The transaction may be within family members eg father to son hence the psf transacted will be lower

Some buyer simply likes the house for some reason maybe fengshui  and willing to pay premium so psf higher

Some buyers see their neighbour want to sell , he wants to buy it for his children so willing to pay premium so the psf will be higher

Some house has undesireble numbers like 14 hence psf lower

Some face road T junction psf lower

 

Etc etc .

Thanks for your reply. all cases quoted are valid. But I am comparing avg psf of recent transaction in the caveat lodge,  some were transacted cheaper(land price only) and some were transacted more expensive(newly A&A), which means the average price should be just "move in" condition. Take a same area for comparison, those move-in condition are listed quite a lot higher than  average price, and those newly A&A are far more expensive than the sold A&A etc. And, I dont find any "land price only" type of property in the listing. Land alone is sold at higher than average transacted price.   I am referring to those units  with very run down condition, require a major reno or A&A as land price only listing. 

Edited March 22, 2017 by Ct3833

[Voodooman]

Landed is usually not a uniform product and buyers are usually particular about facing and many other factors (afternoon / morning sun, fengshui, availability of parking, layout, etc.).

 

Some buy to reno and some to rebuilt but landed usually priced based on land area and land cost itself can vary a bit based on location, plot size, shape, facing, max GFA, etc.

 

But landed at end of the day is a function of land price plus reconstruction/ renovation cost (replacement cost), hence built up is often discounted, especially in a down market.

 

No 2 lands/ houses is the same, unlike condo, a a whole stack of same facing and design to choose from.

[Sdf4786k]

Lets take a 2000 sqft inter terr as an example. Original condition hse is valued at the land cost.. Say 1000 psf, so 2mil listed price. To reconstruct the same house is easily 1mil, so any brand new hse sold will be easily 3mil or 1500 psf.

 

most new terrace is 1615 and are still asking for a premium.

 

I suppose with the impending loom of N Korea crazy testing and Australia reporting of lower then expected commodity exports, we know for a fact that China economy is sliding big time. Just that the hand behind the puppet is keeping things afloat.

 

But there is so many ways you can prop things up. Just only need one disaster that appears and it goes downhill.

 

I still think that as long as the circuit breaker is fixed and the blackpool of trading exist, we going to have to be mindful of how the property market moves

[Victor68]

All things equal, the price of landed property, especially terrace and Semi D, does not command a premium as compared to condos with equivalent floor area in similar area etc. And this is due to limited buyers as foreigners are not allowed to buy. With the small pool of buyers, prices have not gone up as much as many condos in recent years.

I am not sure you got this right. maybe you like to cite an example how you derived at this conclusion.

[Voodooman]

I am not sure you got this right. maybe you like to cite an example how you derived at this conclusion.

If you calculate psf pricing based on build in, generally true but landed pricing is generally land cost plus construction cost (replacement cost), so should be computed based on land area as anyone can buy a similar piece of land and maximize gross floor area by rebuilding.

 

Of course there are many who buy from landed developers selling a lifestyle at crazy prices (based on build up psf pricing).

Edited May 9, 2017 by Voodooman

[Wind30]

Landed is usually not a uniform product and buyers are usually particular about facing and many other factors (afternoon / morning sun, fengshui, availability of parking, layout, etc.).

 

Some buy to reno and some to rebuilt but landed usually priced based on land area and land cost itself can vary a bit based on location, plot size, shape, facing, max GFA, etc.

 

But landed at end of the day is a function of land price plus reconstruction/ renovation cost (replacement cost), hence built up is often discounted, especially in a down market.

 

No 2 lands/ houses is the same, unlike condo, a a whole stack of same facing and design to choose from.

U never see luxus hills before? Landed but thousands of units... Edited May 9, 2017 by Wind30

[Victor68]

If you calculate psf pricing based on build in, generally true but landed pricing is generally land cost plus construction cost (replacement cost), so should be computed based on land area as anyone can buy a similar piece of land and maximize gross floor area by rebuilding.

 

Of course there are many who buy from landed developers selling a lifestyle at crazy prices (based on build up psf pricing).

In Singapore context, there is no way for landed to be cheaper than condo given the same location and tenure. Simply because you are sitting on your own land which is scare.

 

999 and above lease hold land are hard to come by. the only opportunity to turn around are older condo sitting on such land. that is why you see more transactions. if you look at bigger land area, like bigger apt, the psf cannot be proportionally going up with exception. just check out the real transaction you will be able to confirm this.

[Voodooman]

In Singapore context, there is no way for landed to be cheaper than condo given the same location and tenure. Simply because you are sitting on your own land which is scare.

 

999 and above lease hold land are hard to come by. the only opportunity to turn around are older condo sitting on such land. that is why you see more transactions. if you look at bigger land area, like bigger apt, the psf cannot be proportionally going up with exception. just check out the real transaction you will be able to confirm this.

Some bigger landed (FH) in D19 are selling at lower psf pricing (land area) than some nearby 99 LH condo (build in). Based on your logic, that cannot happen. Edited May 9, 2017 by Voodooman

[Victor68]

it is possible due to the design and branding. but not common.

[Voodooman]

it is possible due to the design and branding. but not common.

Not sure if it is generally true but at least in my area, freehold condo is priced at higher psf (build in) than freehold landed (land area).

U never see luxus hills before? Landed but thousands of units...

But Luxus Hill is not representative of the landed market in Singapore.

 

Few developers in SG has the type of landed land bank like Bukit Sembawang, which is a legacy of rubber Lee.

[Throttle2]

Yup i for one wont buy luxus hills

[Still2016]

In Singapore context, there is no way for landed to be cheaper than condo given the same location and tenure. Simply because you are sitting on your own land which is scare.

 

999 and above lease hold land are hard to come by. the only opportunity to turn around are older condo sitting on such land. that is why you see more transactions. if you look at bigger land area, like bigger apt, the psf cannot be proportionally going up with exception. just check out the real transaction you will be able to confirm this.

 

Personal experience.

 

On paper, there is an apparent difference in 99 years versus 999years/freehold title.

 

In reality, especially in Singapore, I find it less of importance. Why?

 

1. It is true, there are some 999/freehold condo selling cheaper than some HDB flat in terms of per sq foot. In addition, there are some 999/freehold condo renting out cheaper than some HDB flat in terms of per sq foot and availability of amenities including carpark spaces. There are many 99years leasehold property selling more expensive than 999/freehold condo especially in the Pasir Ris area.

 

2. Most of use are not expect to live beyond 99 years and if we do, likely we cannot differentiate ABC from 123. By then policies would have changed as not just a few but many households will be affected by the end of the 99year lease. In many other countries, it usually involves a token sum but in Singapore, I hold my reservation.

 

3. Whether 99years or 999years/freehold landed property, it does not matter, if the government wants to take your land for whatever reason including making lonkang, it will be taken. The compensation, don't expect to be market rate, in addition, you have to bear some fees associated including legal fees for the acquisition. My garden was eaten by 1/4 because there was a need for suppose reason and was compensated to the advantage of the state. 

 

So in short, in our life time (for most of us) we are not going to see the end of the lease be it 99years or 999years/freehold. Buy a property that is within your means, you will enjoy staying up to your ripe old age (Warren Buffet) and reasonable location with amenities should see you safely grounded.