For home buyers in Singapore, most would qualify for a BTO HDB flat. It gives the best value for money. Even a resale HDB flat is a good deal compared to the sky high asking prices of private condominiums.
However, regular readers know that I would caution against buying very old HDB flats.
"It's OK lah. I like the location and there are 60 years left to the lease."
And how long are you going to be staying there for? Is there a possibility that you might want or have to sell it sometime in the future? To be prudent, we might want to think a bit further along those lines.
For whatever reason, many people aspire to stay in a private property here even though it would cost at least 3 times more compared to a BTO HDB flat, location for location, size for size.
And it is not $50,000 for a HDB flat versus $150,000 for a condo hor. It is more like $350,000 for a HDB flat versus $1 million for a condo kind of proportion!
Hello! This is Singapore!
Some people pay so much just to stay in private properties that they become slaves to their mortgages. They become house poor. House poor is definitely not fun. Why? No money left to have fun lor.
Even if people can comfortably afford to stay in private properties, to me, one compelling reason to go private in Singapore is because we want to get a property sitting on freehold land or with a land lease that is significantly longer than 99 years.
Otherwise, buying a private condo (with a 99 years land lease) here is like paying at least 3 times more for a home just because it comes with some (usually inadequate) facilities which have to be shared with tens or hundreds of other households in the estate.
(In the case of buying a landed property with a 99 years land lease, don't even have facilities lor. Alamak. Does that sound similar to a HDB flat?)
Oh, did I also mention that the monthly building maintenance fee which condo dwellers have to pay could be 5 times more than what a HDB flat of comparable size would attract?
Silly, isn't it?
So, if you are buying a private property in Singapore, with very few exceptions, it is my opinion that unless the price is truly attractive (think Rule of 15 and value for money), it should be on freehold land or 999 years leasehold land.
For those who do not follow me on Facebook, this was a conversation I had with a few readers on the issue of lease decay:
Just to tell you such lease/leasehold/999years/ freehold are really not a big deal .
So long , you have something on hands , it appreciates .
Well , even if you have freehold property , don't dream the next generation would love to stay at the old hundred years old house , they probably cash out and buy new houses . In view of that , buying lease or freehold for next generation ? I am sure they will cash out too . No problem one la lease units.
What future generations do is up to them.
Wait until it is 100 years and see who will rent a 100 years old freehold condo .
Seah Chen Yang:
by the time it reach 100 years, you are already long dead to know about it and can do nothing to change it either way. lol. so that is why AK say freehold or not depends on whether you wanna leave it for your next generation and we have no control on what they want to do after we pass even if we say we want to leave it for them to earn rental income for life but they choose to sell for capital gain after we pass.
A decision to buy FH, 999 years (as good as FH) or 99 years (these days even 60 years or 30 years) leasehold properties is only probably right or wrong in relation to our motivations.
What we choose to buy should very much depend on what we plan on achieving.
As usual, if you have money oozing out from your nose and ears, you can pretty much buy whatever you want. Don't mind me.
AK is just a frog croaking in a well.
60 years leasehold condo in Singapore.