New Freehold Condo Launch Singapore
New Freehold Condo for Sale
Fyve Derbyshire is located near the Novena premier healthcare hub in close distance to Novena MRT Station. Its central location also means you are in within easy reach of Singapore’s favourite food centres including Newton Food Centre and Balestier Food Centre. You are within
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Freehold Condo vs Leasehold Condo
Condominiums in Singapore usually come in two types of tenures – freehold or leasehold. The difference between the two lies in the period of ownership. Typically, a freehold property allows perpetuity of ownership, but a leasehold property grants only 99 years or 999 years, thereafter, the property must be returned to the government.
Besides the ownership, the market tends to perceive freehold properties as far more favourable than leasehold ones because the tenure justifies the premium pricing, prestige, and ease of financing. Read More
Are there any upsides of leasehold over freehold properties then? The answer is yes. The interesting truth is that leasehold condos in Singapore have higher appreciation value than freehold ones. Reports have shown that over the past decade, leasehold condos have appreciated 86.7% while freehold properties hit merely 60.8%. Leasehold units also have better rental yields because the monthly mortgage repayment is lower than freehold units. Additionally, rental prices are not affected by the lease status of condos; tenants will not pay more just because the condo unit is a freehold property.
Benefits of Freehold Condo in Singapore
One of the key benefits for owning a freehold condo is the peace of mind that the lease will never run out, an important condition to facilitate the ease of on-going financing. In Singapore, banks require properties to have at least 30 years of remaining tenure. The amount of financing that these banks can provide, also referred to as Loan to Value (LTV) ratio, can be significantly lowered if the property starts to age. Such a scenario presents fewer financing options to potential buyers and consequently restricts the owners’ ability to sell their properties. However, owners of freehold properties are free from such a problem because of their perpetual ownerships. Read More
In general, the sale price of a new freehold condo unit can be 10 to 15% higher when compared to a leasehold unit in the same area. The positive perceived value of freehold properties is prevalent across the market and this tends to favour the selling price as well. Furthermore, for those who were far-sighted in the 1990s and have invested in freehold condos instead of leasehold ones, would have enjoyed the rapid growth of the Singapore property market over the past few decades with a significant rise in their property prices. Considering property investment was a lot cheaper at that time, the prices would have multiplied many folds by now.
Another benefit for freehold condos is the potential for collective sale by developers. In a study that analysed 87 en block condos in 2017 and 2018, it was noted that developers are more likely to shortlist freehold condos for such initiatives than leasehold ones because the Government Land Sales (GLS) is no longer releasing freehold plots to developers. Needless to say, this increases the chances for freehold property owners to profit from these collective sales.
Taking a Holistic View of Freehold Condo
Owning a freehold condo in Singapore has its benefits and prestige, however, buying a property based on tenure status alone may not be the wisest choice. For starter, freehold condos are more expensive, and the older units may not offer lucrative potential down the road. Leasehold properties, on the other hand, may provide better investment returns if the objective is to generate rental income.
While the value is always in the eye of the beholder, having a level-headed approach is more likely to benefit property buyers in the long term. After all, buying a property is no small matter, a slight misstep can set one back by hundreds of thousands. Read More
Before taking up a huge loan to secure that million-dollar freehold property, why not consider different components from a more holistic point of view? Besides tenure, the intention, location, amenities, and infrastructure are far more important factors to consider.