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Reader:
Hi AK,
Hi AK,
Hello! I only found out about your blog in Jan this year and have benefitted a lot from your analysis and sharing.
I have been reading your recent posts about upgrading to private housing. I happen to work in a landuse planning agency, hence i would like to share my views.
While i agree that one should not upgrade to a condo if it means overstretching your finances, i think getting a freehold property might be the only way to preserve the value of your property.
For 99 year leasehold properties, they would eventually need to be returned to the state, and the value of the flats will depreciate after it hits around its half life.
From the capital preservation point of view, especially for couples who have kids and intend to pass down their properties to their kids, wouldn’t it still be worthwhile upgrading to a freehold property?
The truth is that freehold land is scarce.
While i agree that one should not upgrade to a condo if it means overstretching your finances, i think getting a freehold property might be the only way to preserve the value of your property.
For 99 year leasehold properties, they would eventually need to be returned to the state, and the value of the flats will depreciate after it hits around its half life.
From the capital preservation point of view, especially for couples who have kids and intend to pass down their properties to their kids, wouldn’t it still be worthwhile upgrading to a freehold property?
The truth is that freehold land is scarce.
Was wondering when you bought your freehold condo, was the lease a major consideration? Would like to hear your thoughts on this 😊 Thanks!
My reply:
Hi,
Hi,
Welcome to my blog. :)
You started reading my blog in January this year. So, you might have missed this:
http://singaporeanstocksinvestor.blogspot.sg/2016/12/buy-99-years-leasehold-or-freehold.html
I have friends who also work in the landuse planning agency here and when we talk about land leases in Singapore, they share our sentiments.
I won't say anything about myself but if legacy is a consideration, then, buying FH or 999 years leasehold makes more sense than a 99 years leasehold property here.
Oh, I don't mean buying a FH property in JB is better than buying a 99 years leasehold property in Singapore hor. That is not an apple with apple comparison.
Sorry, I couldn't resist that.
Related posts:
1. Flat is 37 years old and son is 8.
2. When the lease on HDB flat ends.
(Do read the comments section too.)
Bloggy Award
4 comments:
Ppl tell me that they dont need to buy freehold because they don't hv children to pass down the property. While it is true, I always highlight to them that freehold gives a support to price. Not for legacy reason.
Hi pf,
To be fair, they are probably right if they buy newly built 99 years leasehold property. However, if they were to buy pretty old ones, especially those with less than 60 years left to the lease, it could be an issue.
I don't see property as a pure investment or a pure consumption. Getting freehold is a risk mitigation for the downside. Nobody knows for sure if we hv to liquidate in a hurry.
Winston Goh says...
I'm very puzzle why HDB flat buyers cried foul now when it is clear fr the onset the lease is 99 yrs (or less depending 1st hand or resale). Even if you are 21 years old, a flat with 50 yrs left still give you plenty of time to upgrade.
AK says...
For people who wish to upgrade, there is a fear that upgrading becomes more difficult when the pool of potential buyers for their home shrinks especially if it is an old ageing flat (such as one with 50 years left to the lease). This is a valid concern.
https://singaporeanstocksinvestor.blogspot.com/2017/04/hdb-flat-is-37-years-old-and-son-is.html
https://singaporeanstocksinvestor.blogspot.com/2014/07/financing-purchase-of-hdb-flat-new-or.html
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