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what is the relationship between lease balance and resale prices.. if lease balance is 0, is it possible for resale prices to go to the negative range?? is it because of depreciation or.. thank you
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3 Answers

✔1 When a property lease fully expires, its market value can drop to zero, but it will not become negative.

✔2 Once the lease ends, ownership returns to the government, and the land is taken back.

✔3 The site may then be refreshed, redeveloped, or reissued with a new 99 year lease for future use.

✔4 This process is part of long term land planning and redevelopment, not a penalty to owners.

As Lee Kuan Yew once said, “In the end, what matters is not what you have, but what you build.”

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1
No one will be interested to sell a property when value is 0, thus it is highly unlikely in current near future, such incidents will happen. Read More
1
Most financial projections assume a curved-shaped relationship between lease balance and resale prices.

I'll be happy to show you the financial models that will allow you to estimate what fraction of the 'freehold' value a particular property will be priced at depending on its remaining lease. I use these models commonly to identifying undervalued assets across Singapore for clients to purchase, or derive suitable exit timings for properties to go on sale.

I'm a Harvard graduated real estate agent with a degree in economics, and have supported clients on more than $1 billion in transactions. Would love to connect to discuss further.

Kay Cloud
The Harvard Educated Agent
Propnex Realty Pte Ltd
cloud@propnex.com
Tel: (+6.5.) 8.5.6.7.4.5.8.5
Whatsapp -> https://wa.me/6585674585 Read More
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