Freehold or Leasehold?

[lonewalker]

Hi,

I got a question to ask the experts here on properties.

If you have say some, would you buy a 99 year leasehold condo or a 999 year freehold condo? (For a like for like area and size).

What are your reasons?

Just for general discussion.

Singapore is a land scare place, if the government decided to use the land, does it matter if it is leasehold or freehold?

 

[peterchan75]

1. Freehold is better than lease hold. One example is that lease less than 70 years might have problem getting higher loan from bank. Authority might not grant lease extension.
2. Location. Most new prime locations e.g near MRT are lease hold. If you have car then ulu places like Tanah Merah or Sembawang is not a problem.

 

[lonewalker]

1. Freehold is better than lease hold. One example is that lease less than 70 years might have problem getting higher loan from bank. Authority might not grant lease extension.
2. Location. Most new prime locations e.g near MRT are lease hold. If you have car then ulu places like Tanah Merah or Sembawang is not a problem.

But would the price difference be a lot? If you are buying it for investments?
How much does a similar location for a freehold cost more than a leasehold?

 

[peterchan75]

Generally, freehold properties are more expensive than leasehold.
A fren of mine bought an freehold apartment at Changi for 800+K and she sold it for roughly the same price. She held the property for more than 10 years. During that period, she earns rental income. Another fren bought a leasehold condo beside Bishan MRT for $1M during the peak. The last time I ask them, they said their apartment would not fetch more than 1M. So, there is no apple to apple comparison, but timing plays a part. If there are 2 apartment sitting side by side, the freehold propery will cost more.

 

[lonewalker]

Generally, freehold properties are more expensive than leasehold.
A fren of mine bought an freehold apartment at Changi for 800+K and she sold it for roughly the same price. She held the property for more than 10 years. During that period, she earns rental income. Another fren bought a leasehold condo beside Bishan MRT for $1M during the peak. The last time I ask them, they said their apartment would fetch more than 1M. So, there is no apple to apple comparison, but timing plays a part. If there are 2 apartment sitting side by side, the freehold propery will cost more.

Heh, I think location is still the major reason for the price of the property. Usually people like areas that gives them convenience.

Timing is key as you mentioned too.

Side question.
Does it still makes sense to invest in properties in Singapore? or investing into stocks or other areas is better?

 

[Victor_Zeng]

If you intend to pass the property to the next generation, you might consider Freehold. Having said that even Freehold properties arn't going to last forever, because the management fee will increase gradually to a point, where tearing down the property is more worthwhile than paying high maintenance fee.

If you're looking at property purely for rental investment, I would think leasehold is better than freehold because I've yet come across a tenant who consider renting the apartment because it is Freehold. Since Freehold would cost more than leasehold, to maximize your rental yield, I would consider leasehold. If I were a tenant, all I care is price, facilities and location (amenities and proximity to transport).

Just my two cents worth.

 

[marnee]

Another thing to also consider is whether its leasehold on a freehold land...meaning the developer bought the property thats freehold then launch the project as a 99 leasehold...so u pay a premium for the newly launch project & 99 years later it goers back to the developer...1 big developer is famous for doing that now..

Personally I prefer freehold..although the leasehold ones that were highly speculative in nature jumped by leaps n bounds like sentosa/ir area..so like what someone said, timing is important...but i think in current market situations, just look at freehold..

 

[chopra]

up for more views on FH vs leasehold.

 

[mummy1234]

We only buy freehold cause it retains its value better and has better capital appreciation potential. Don't have to feel rushed to sell it after 10 years because of declining lease for eg.

 

[koja6049]

asset appreciation is higher for leasehold, buy them for investment