12 October 2009
Leasehold vs Freehold
It has been one of the most discussed, argued over and one issue that is always very quickly put to sword by people who say “Buy Freehold!” without having analyzed changes that has been subtly taking place right under our noses. In any cases, people buying properties would do well to remember that location is always more important than anything including the question of freehold vs leasehold.
I’ve always felt sorry for people who fail to recognise this and time and time again buy something within their budget that is in a poorer location but is freehold over buying something in a better location that is leasehold for the same budget.
This is something typical of human nature where something that has been passed down from our forefathers through many generations remains indoctrinated in our minds without proper analysis of the relevance in the world today. We must realise that the world has changed and that is true in Singapore as well as anywhere else. During our forefathers’ time, it is a very common thinking to buy a land or a piece of property with the intention of passing it down from generations to generations.
Today, things have changed. Majority of first time home owners in Singapore do not hold on to their properties for more than 10 years. Today, most average Singaporeans would think of moving out the moment they get married, upgrade once the family gets larger, sell once they make money on it etc. There is a lot less of feeling attached to the ‘family home’ as these were not built by our grandfathers or fathers, but by the state or some other developers.
Therefore, if a person intends to buy a brand new property and then sells it within the first 10 years (which most people have a tendency to), then there is a good chance that they will gain more from a leasehold property than a freehold property or vice versa; lose more in a freehold property. Below is an analysis which I hope can convince you.
What You Should Know…
1. Most Singaporeans sell their properties within the first 10 years after purchase
2. Leasehold properties also have en-bloc potential; probably better
3. Leasehold properties sold within the 1st 10 years depreciate at about the same rate as Freehold Properties
4. Leasehold properties may potentially get en-bloc earlier due to urgencies of the existing owners
________________________________________________________________________________________
7 September 2009
The Next Big Thing!
Just when I’m starting to wonder if we would see another new and exciting property like Reflections that would transform the boring skyline of Singapore, CapitaLand and Hotel Properties Limited have combined to surprise us with The Interlace designed by Ole Sheeren of OMA (Office for Metropolitan Architecture).
With prices of properties in some areas marketing at crazy prices like Ang Mo Kio for $1,300 psf, the Interlace should offer a bargain if it were to sell at the same price.
However; with over 1000 units, it would be interesting to see how it performs once it is on the market. With it’s proximity to Sentosa, One Degree 15, Keppel Marina, The Financial District, etc, this is going to be a very exciting development to live in.
I believe some of the units would offer spectacular views of the financial district, the marinas, and of course the iconic Reflections by Keppel Land.
Anyone looking for a good investment at this point in time, cannot possibly go wrong too much with The Interlace.
I rank this a 5 star investment.
Colin Tan
ColinTan Training & Consultancy
www.colintan.com
Other Pictures:
