Have prices of private properties bottomed out and is it the right time to buy private property now? If so, should you buy freehold or leasehold properties? To answer these questions, it depends on whether you are an upgrader or investor. Recently, I received the following email from a follower and decided to share some of my thoughts.
I am a big fan of your blog. It’s very informative and insightful.
Currently we are staying in fully paid 4room HDB flat. My husband and I have been searching for property to upgrade this year. We are looking for freehold condominium or landed property with SGD2 million budget. Do you think it’s possible? Any good projects to recommend? Appreciate and thankful in advance.
Previously, I have written an article on my thoughts on freehold and leasehold properties in Singapore. Readers should check it out and have the right mindset when buying freehold properties, taking into consideration the rules and government policies for land use in Singapore. Do not assume that you really own the land and house just because it comes with a freehold tag. In a land-scarce nation like Singapore, you never really own a house. The government has various legal provisions to acquire your property for development purposes – regardless its freehold or leasehold.
Landed or non-landed?
The next question is whether SGD2 million is sufficient to purchase a freehold condominium or landed property. In my humble opinion, the budget is definitely impressive. However, if you are looking at new freehold landed property, SGD2 million may not be enough. A comfortable figure should be SGD4 million. But even with SGD4 million, you can probably only afford those projects that fall outside of the central region.
However, with a budget of SGD2.5 million, buyers can look at 99-year old condominium that comes with 1000 sq ft located in the central region. If you don’t mind staying outside the central region, then SGD2 million should be sufficient to land you a 1100 sq ft condominium with 99-year tenure.
Will prices continue to fall in view of the challenging economic condition? Should buyers continue to adopt a wait-and-see approach? Recent data released by URA indicates that [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]
Read my other articles on property:
- The Dark Side of Loan-to-Value (LTV) ratio
- Freehold or Leasehold property?
- Negative HDB sales
- Wealth destruction from CPF Accrued Interest
- Devastating HDB Loan and CPF Accrued Interest
- CPF’s Home Protection Scheme (HPS)
- The Dark Side of CPF Housing Withdrawal Limit
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