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Is it safe to say that if plot ratio has more or less been maximised for an old 99yr condo development, it would be dangerous to invest in it as enbloc is unlikely and the asset will simply depreciate with time?
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2 Answers

Robbie Chen Chee Howe
Hi,

This is not necessarily true. Because plot ratio can be changed from time to time via Master Plan. It depends on the area, whether Government has earmarked it for future developments.

For enbloc to happen, the Developers will have to see that there is money to be made from the old development. Else, it will not make sense for them to go through the entire enbloc process.

If the plot has been maxed out, with limited upside, and also little to no chance of an adjustment from Master Plan, then yes, I would say it would be a bad investment choice.

Should you need any further assistance in matters relating to property, please contact me at my mobile 9748 6305  . I will be happy to assess and share with you the possibilities for you and your partner in the current market.

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Investment returns are achieved via different ways in real estate, with some banking in on capital appreciation, potential enbloc or rental income. I do not agree that it will be dangerous to invest in such a property, if it can generate decent rental income over the years, and if we were to calculate the total projected rental income over the balance tenure, versus your purchase price inclusive of stamp duties and other miscellaneous fees, the difference in the amount can be quite significant, this can turn out to be a good investment, however, if we are only interested in a potential capital appreciation or enbloc potential, the description you have provided does make it sound like a bad investment choice.

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