I am an expat and I am not familiar with freehold v 99 year lease. What are the pros and cons of a 99 year lease?
Posted by peter kruger on Mar 22, 2008 in General Questions | 2593 Views
Latest Answers by Real Estate Professionals (7 Answers)
Answer Posted on Apr 17, 2008
Hi Peter,
Buying 99 years leasehold unit will be cheaper, but if you intend to resale it later, it can be challanging as banks are more relunctant to approve the loans with short tenure so you will have a smaller pool of potential buyers. Not many buyers have that amount of cash to pay upfront. En-bloc will be another option to sell at a better price but that really depends on the market demand at that point in time.
If you are going for leasehold, especially for renting purpose, go for places where take-up rate is high so that when you decided to sell, there will be other investors ready to buy over your units.
Leasehold is cheaper, so you will enjoy higher yield for rental. Just like any leasehold unit, unless the market pickup drastically, your majority of return will be from rental.
So it is important to do your sums correctly whether you are looking at capital appreciation or rental yield.
Do contact us so that we can help to advice you on the housing options available with your budget.
Regards
Ignatius & Adelina (B.Eng, CPA)
Email: sghousingpartners@gmail.com
Mobile: (65) 9017-9690
Buying 99 years leasehold unit will be cheaper, but if you intend to resale it later, it can be challanging as banks are more relunctant to approve the loans with short tenure so you will have a smaller pool of potential buyers. Not many buyers have that amount of cash to pay upfront. En-bloc will be another option to sell at a better price but that really depends on the market demand at that point in time.
If you are going for leasehold, especially for renting purpose, go for places where take-up rate is high so that when you decided to sell, there will be other investors ready to buy over your units.
Leasehold is cheaper, so you will enjoy higher yield for rental. Just like any leasehold unit, unless the market pickup drastically, your majority of return will be from rental.
So it is important to do your sums correctly whether you are looking at capital appreciation or rental yield.
Do contact us so that we can help to advice you on the housing options available with your budget.
Regards
Ignatius & Adelina (B.Eng, CPA)
Email: sghousingpartners@gmail.com
Mobile: (65) 9017-9690
Answer Posted on Apr 17, 2008
Hi David,
Greetings!
Since most of the answers rendered have focused on definition, I shall focus on a slightly different angle: returns.
Other things being constant (i.e. location, view, floor level, etc), freehold properties do give better capital appreciation over time. This is important, and particularly if you live in the property, and plan to sell it one day.
For investors, the rental yield and how quickly you can rent out your unit are also important considerations. Some leasehold properties like Bayshore Park is a gem - units get tenanted as quickly as the last tenant leaves.
Their prices have also appreciated over time. Someone who bought it in 1986 for S$170,000 may be selling it today for S$1 million.
Another pointer is: owners who buy a particular property for investment purpose may choose to buy leasehold (more affordable most times, other things being constant) since the rental price is not dependent on whether the property is a leasehold or freehold. As such, their capital returns is better, compared to say that for a freehold project.
Hope the above gives some light.
Cheers,
Jasmine Vincent (DTZ)
Mobile: +65 9222 8838
Email: enquiry@jasminevincent.com
wwww.JasmineVincent.com
Greetings!
Since most of the answers rendered have focused on definition, I shall focus on a slightly different angle: returns.
Other things being constant (i.e. location, view, floor level, etc), freehold properties do give better capital appreciation over time. This is important, and particularly if you live in the property, and plan to sell it one day.
For investors, the rental yield and how quickly you can rent out your unit are also important considerations. Some leasehold properties like Bayshore Park is a gem - units get tenanted as quickly as the last tenant leaves.
Their prices have also appreciated over time. Someone who bought it in 1986 for S$170,000 may be selling it today for S$1 million.
Another pointer is: owners who buy a particular property for investment purpose may choose to buy leasehold (more affordable most times, other things being constant) since the rental price is not dependent on whether the property is a leasehold or freehold. As such, their capital returns is better, compared to say that for a freehold project.
Hope the above gives some light.
Cheers,
Jasmine Vincent (DTZ)
Mobile: +65 9222 8838
Email: enquiry@jasminevincent.com
wwww.JasmineVincent.com
Answer Posted on Mar 25, 2008
Hello Peter, 99-year leasehold properties are not any harder to sell than freehold properties per se, if you price them appropriately, ie generally lower. How much lower will depend on the location, market conditions etc. Over time, they usually do not appreciate in value equal to freehold properties as freehold properties still command a premium by virtue of its freehold status and relative rarity. There are of course exceptions depending on unique circumstances. Pl do not hesitate to contact me if you wish to discuss further.
Cheers
Fred
9090 8629
Cheers
Fred
9090 8629
Answer Posted on Mar 24, 2008
Hi Sir,
Generally, the freehold properties will have a better value than 99 year lease properties.
However, you need to take into consideration of the location as well.
In those prime area,even those 99 years lease properties can yield an attractive returns.
Cheers,
Adeline Teo
ERA, 94378858
Generally, the freehold properties will have a better value than 99 year lease properties.
However, you need to take into consideration of the location as well.
In those prime area,even those 99 years lease properties can yield an attractive returns.
Cheers,
Adeline Teo
ERA, 94378858
Answer Posted on Mar 24, 2008
Hi Peter,"freehold v 99 years lease"..Freehold allows you to own it for as long as you like. Only the state can acquires it for public use under the Land Acquisition Act. Whereas 99years lease means it reverse back to either the original owner or the state whichever case maybe when the property's lease expires.
Freehold properties are therefore more expensive than 99 years lease properties. For investment purpose, buyers generally prefer "99years lease" properties as it is cheaper and hence give better yields.
Freehold properties are therefore more expensive than 99 years lease properties. For investment purpose, buyers generally prefer "99years lease" properties as it is cheaper and hence give better yields.
Answer Posted on Mar 24, 2008
Hi Peter,"freehold v 99 years lease"..Freehold allows you to own it for as long as you like. Only the state can acquires it for public use under the Land Acquisition Act. Whereas 99years lease means it reverse back to either the original owner or the state whichever case maybe when the property's lease expires.
Freehold properties are therefore more expensive than 99 years lease properties. For investment purpose, buyers generally prefer "99years lease" properties as it is cheaper and hence give better yields.
Freehold properties are therefore more expensive than 99 years lease properties. For investment purpose, buyers generally prefer "99years lease" properties as it is cheaper and hence give better yields.
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