Freehold Property Property

Leasehold Vs Freehold

As a real estate profession, whenever I bring the buyer to view a private property, I will receive the question from seven out of ten of the buyer, is this a “leasehold or freehold” property.

Private resident property in Singapore generally can be categories into two broad areas. The leasehold and freehold. In leasehold, most of the property can be either 99, if not 999 years.

So, which is better? Leasehold or freehold. I think this is a straightforward Answer. Of cause is freehold. It is a response that does not require too much thinking.

Technically, the freehold land, the owner can hold it forever, with no end-date to it. He can also, if he decided to do so, pass that ownership to the next generation and after.

999 leasehold, is somehow similar to freehold. The end date of the property has 1000 years before the lease ended. The owner can therefore able to pass down to 10 generations.

Why are buyers so concern about the tenure of the property, rather than the land? Do leasehold and freehold matter? To me, it does make some implication, but land tenure should not be the critical consideration when buying any property

Let us now dive into more detail on the pro and cons of both leasehold and freehold (I will categorize 999 years leasehold with freehold)

Freehold during Collective Sales

When a project is undergoing a collective sales (or, it is more layman to call it as En-bloc sales) process, which is an option that normally benefits the owner from a financial perspective.

In any collective sales, the project will normally be over 10 years of age from TOP. some of which might go as high as 30 years of age.

Lease Top-Up

Developers who involved in the collective sales will have to top-up the lease, to bring it back to 99 years. So as the value of the property is at the market when they start selling it. This top-up amount can be as high as hundreds of million.

Taking Mandarin Gardens, for example, the project has passed its 34 years of age as of 2020. The developer, in addition to the purchase of the land, will have to pay a lease top-up fee of over $300 million

With that into consideration, the developer will either offer a lower price to the current owner or potentially sell at a higher price to new development. My personal take for this is, I will rather buy low, rather than trying to sell high after development

Appreciation rate

While touching the pulse of the property market. I realize the appreciation rate of leasehold property has interesting came higher than freehold property

Statistically, it was also second to my groundwork. One of the key reasons, I felt is, there is more leasehold property as compare to freehold. Most of the leasehold property land today is closer to the key transport hub, shopping mall, and other amenities

Financing on leasehold property

With the remaining lease of the property going lesser and lesser, the government will realized obtaining the loan became more and more challenging.

Therefore, The National Development and The Ministries of Manpower, has on the 10th May 2019 updated the rules on both HDB (Housing and Development Board) and CPF (Central Provident Fund) on the usage fund in OA (Ordinary Account).

The key changes to the rule are, the total CPF can be used will depend on the remaining lease of the property and the age of the youngest buyer. This is, the remaining lease of the property must able to cover the youngest buyer to the age of 95.

In additional to above, NO CPF is allows to be used, if the remining lease of the property is less then 20 years.

The remaining lease is more than 20 years for those properties, but it does not cover the youngest buyer to the age of 95. What happens? The CPF used will be pro-rated accordingly by the authority.

Continue transfer of ownership

All properties, be it leasehold or freehold. The transfer of ownership is possible. Why was this being taken as consideration was, for a leasehold property, especially 99 years leasehold property? The effective stay-in period is less than 90 years.

Why is it lesser? The reason being that the development will take a few years before the owner starts to move in and stay. The leasehold property lease starts when the land is sold, not when TOP (Temporary Occupation Permit) or CSC (Certificate of Statutory Completion).

Therefore, when the transfer of ownership going to happen, we will need to look into the remaining lease. It might just for two-generation and this might not be enough, especially for landed property, which normally will pass on by generation.

For freehold property, the above consideration will not be required. It can be passed on generation after generation. The taking over a generation can then continue to do any renovation, Additions, and Alterations works (A&A) or rebuilding to upkeep the property.

I will hereby want to put a caveat here, Singapore does have the LAND ACQUISITION ACT (CHAPTER 152). Whereby the private land can be acquired by necessary authority for the purpose of public purposes

Rental Yield

Having to share above, the various benefit of buying freehold property over leasehold property. Is it true that there is nothing comparable between both?

The answer is no, there is still benefit, if not equal fairness on both freehold and leasehold.

Rental Yield, for example, the tender age of the property has a minimum, if not no impact on the rental yield. One of the key parameters when it comes to rental is the amenities.

As we all aware, most of the units being rented out are taken by foreigners. Since this is not their homeland, they will be looking at accessibilities to malls, public transport, and rental amount.

Investor

In property investment, or any investment. There are long-term and short-term investors. When it comes to property investment, many of the investors are more looking at the short term. This group of investor are looking at a “hit and go” type of approach

As Singapore property transaction has SSD (Seller Stamp Duty), whereby the property purchased if sold within three years, there is an SSD imposed a minimum of 4% on the actual transacted value or market value whichever higher. There will be a minimum holding period of the property. This can be overcome when they bought a brand new property

During the brand new unit’s purchase, the investor will start to make their progressive payment, which is not the full repayment. By the time the unit got its TOP, it will likely be approaching the third year.

They will now sell the unit in the open market and profit from the sales without liable for the SSD. Assuming the market is in a healthy state.

Conclusion

There are generally two categories of buyers: buying for own stay, and the second type buying as an investment.

Be it which categories you are. My most humble suggestion is to look at the property with the following priorities

Amenities

You can do any renovation for your property, but you can’t bring an MRT station, bus interchange, or mall near your place. You might be driving today, but there will come a time that you want to hop onto public transport.

Potential Growth

What and how to determine that. My suggestion will still be the development of the area you bought. If there are a transport hub or mall around, the chances of your property dropping below market value are very slim.

This is also the same selling point, in the event you wanted to sell your property

Leasehold or Freehold

I have shared earlier, and both freehold and leasehold are comparable unless you really wanted to hold the property generation after generation.


Lewis Tee - Real estate agent buying selling renting

If you have any more queries. Do contact me now. Click here to send me a WhatsApp.

Not forgetting, leasehold or freehold is the age of property, but to move ahead, there are more to consider.

Let discuss and see what option you have. Property Wealth Planning if what you need, not just buying and selling

Penrose Launch Property Review

Project Review – Penrose

Have you heard about the recent new launch in district 14, Singapore? Yes, it is Penrose. This has been a hot topic discussed by many buyers looking for new launches and also, real estate professionals in Singapore.

There are various reasons as to why this development is drawing so much attention. From the location to accessibility, design, layout, pricing, and more.

Do allow me to share with you, some of the key benefits of this development. Before I get into more details of the project, one of the key important things to take note of is;

This development is done by not one, but two established developers in Singapore. The City Development Limited ( CDL ) and Hong Leong Group.

Let me now dive into the details of the project. Why everyone is talking about it, why this development is worth looking at, and why you should consider this development whether you are an investor or buying for your own stay.

For those of you who have been reading my blog on project reviews, you might have realized, I will hit onto the key points, mainly consisting of the layout of the unit, the location, and lastly, the future development of the project—sharing with you a few tips, saving you, a reader of my blog, time and effort in reading it.

For Penrose and subsequent future posts, I will incorporate another section, which is the price and future potential growth.

Layout

Penrose, having a total of 566 units in the development, would be considered as a middle sized development. Although the size of the development is mid, it has Single bedroom units for the investors and individuals to four-bedroom units that are ideal for families.

With the current Covid-19 situation, that has no visible end point, and what happens POST Covid-19, buyers might be considering buying a slightly bigger unit that allows for keeping one of the rooms as a study room.

Unit TypeNo. of Units
1 Bedroom57
1 Bedroom plus study2
2 Bedroom137
2 Bedroom plus study34
3 Bedroom228
3 Bedroom plus study54
4 Bedroom54

2 Bedrooms With Study

The 2 bedrooms (with study) is one of the good units for newly married couples or investors. Why?

The 2 bedrooms (with Study) being 74 square meter in size, has a regular layout design, whereby there are no corners and shape edges, leading to wasted space.

For both working couples, one study room may not be enough, as each will require their own privacy during work. Bedroom two, in this case, can be used as the other work area.

Alternatively, the bedroom two can also be used as a game room, where most of Generation Y and after, will appreciate the Internet gaming.

Lastly, bedroom two can also be used, like a baby room should there be a new member coming to the family.

For investors, upon buying a unit, you will most likely want to rent it out and start collecting rent. Many landlords will like to have tenants that are professionals. Due to the nature of their work, these groups of tenants will most likely want to have a work area, that is not mixed with the rest area, like the bedroom.

This will give you a higher opportunity to fulfill the tenant needs and have your unit rented out sooner than the rest.

3 Bedrooms Premium

In Penrose, there are 3 broad types of three bedrooms. They are the basic three bedrooms, three-bedroom with study, and three bedrooms premium.

What I am recommending will be three bedrooms premium, in particular, type (3Y) d. Now you might ask me, why this particular type.

Firstly, this unit has a size of 99 square meters. By looking at the size, the first thing that crosses your mind would probably be, why only 99 square meters? Putting aside the numbers to the size of the unit, when you step into the show flat, which is a similar unit, which is also Type (3Y) but is e model. Both the units are comparable but the size is even smaller, which is 98 square meters.

After you have gotten a feel of the space, you will not have the feeling of being confined in the unit. The reason being that the unit is very regular. There is no sharp corners and irregular bends inside the unit. The second, which is the key, is that the unit ceiling height is 2.8 meters. With such a right ceiling height, that gives you the benefit of air circulation and also, the feeling of freedom

Lastly, the unit is on stack 34. The development is built with the North-South facing and the next block, which is the HDB, is across the street. Due to the distance between both the blocks, it does not affect the breeze from flowing into the units during a windy day. Best of all, their units will be facing the angle of the morning sun, that gives you the brightness and not the heat.

4 Bedrooms

The 4 bedrooms in Penrose is like a 1 bedroom unit. It is rare, as less than 10% of the units are 4 bedrooms. This amounts to only 54 units, across the whole 566 units available.

Personally, for the 4 bedrooms unit, I preferred the type (4) b, per the attached picture. This unit sits at the corner of the block, having the facilities right in front of the balcony.

The development has only 18 floors, and for this unit, I will recommend having anything above 14 floors. the higher floor will have a better view and better breeze.

Another benefit for the 4 bedrooms in Penrose is, all rooms come with an attached bathroom. As you might be aware, the morning rush for many families can be challenging. The units come with 3 bathrooms, both the master and bedroom 4 is solely attached and bedroom 2 and 3 are shared with a bathroom.

Location

Penrose is located along Sims Drive. The plot of land was previously a cluster of the old HDB flat. The physical location of the project will be at 20 to 30 Sims Drive.

Accessing to routine marketing is just across the street. There is a sizable wet market and hawker center within 5 mins of walk.

MRT

The nearest MRT station from the development will be Aljunied MRT Station, which is about 400 meters away, which would take you less than 7 mins to reach by foot. Aljunied MRT, which is the East-West line of our MRT transport system, and it is the first MRT line that is operational in Singapore.

From Aljunied MRT station, you are only 5 stations away to Raffles Place, which the financial hub and business district of Singapore. Bringing you the shopping area in Bugis, where there are 2 big shopping malls, is only 3 stations away. Going towards East, it is only 1 station to Paya Lebar, a newly developed shopping and office area.

For working professionals, the MRT will also bring you to most of the business hubs in Singapore, such as Raffles Place, Marina Bay Financial Center, Suntec City, Paya Lebar Quarter

Schools

Primary school is always a key consideration for many parents. Penrose, other than having the accessibility to the key business hub in Singapore. It also has popular schools within reach.

Within one KM, we have Geylang Methodist School and within two KM, we have Kong Hwa School and Cedar Primary School.

Development in District 14

Penrose is currently the only value for money development in district 14. Other than Penrose, there are currently no other developments of that size. I am confident that there will be more developments of this size in the future, however, whether it is in the near future or far future, i do not know.

I am so confident in the additional development as I feel that there are still many unwind developments in district 14. Looking at the current development of Penrose, there is still another plot of land nearby, that is not developed, or even sold yet.

Knowing there are still so many options, why should you be getting the unit now? I do agree that you can wait. However, currently, with the Covid-19 situation, developers are softer in their pricing. Once that is over, there is a very high chance that the developer will review and revamp the price structure.

Also, what happens to the price in 2 years time? As we know, property pricing is always on the up. 10 years ago, the property you were looking at property at was asking for less than one thousand per square feet. Now, in many areas, the asking price is above 1,600 per square feet.


Buying New Launches

Let’s not wait any longer. Contact me now. Click here to send me a WhatsApp.

To know more on the project, click here

Remember, There is no medication for regret. What is missed, is gone

Kopar Newton buy sell Property Review

Project Review – Kopar

Covid-19 has been going on for some time, and nobody knows when it will end, or a vaccine will be ready. However, we can’t wait for this pandemic to end totally before deciding to either upgrade from my existing property, relocate nearer to my child’s school, or invest in a new property, as it requires a few years to build and by the time it is ready, we can capitalize on our investment.

Therefore, if you have a plan to upgrade, relocate, or invest, or if you are a foreigner, looking to buy a property in Singapore, I would like to recommend, Kopar@Newton. You might ask me, why Kopar@Newton? Why Newton? How can I afford it? What if I can’t rent it out? There are too many why’s, how’s, what’s, and more. Let me share with you the benefits of Kopar@Newtown. After this, if you still have standing concerns, we can discuss on how to overcome those.

Kopar@Newton

Kapar at Newton (纽顿铜源) is a 99-years leasehold development with a land size of 125,327 square feet having a plot ratio of 2.8. The developer of this project is CEL Development Pte Ltd. The project is located along Kampong Java Road. The development comprises of a total of 378 units.

CEL Development Pte Ltd is a subsidiary of Chip Eng Seng Group. Chip Eng Seng Group is a listed homegrown company that has won the bid of that plot of land at $418.8m. This homegrown company has portfolios that includes constructing The Pinnacle@Duxton, Privé @ Punggol Field, Park Colonial, High Park Residences, and more.

The legal completion of the whole development is planned to be on 31st December 2026. In all developments in Singapore, the targeted completion is normally earlier, in this case, is 31st Dec 2023.

Layout

First, let me share with you the layout of Kopar@Newton. I will not be sharing every single layout but will be sharing with you what I feel is worth considering.

Unit TypeNo. of Units
1 Bedroom66
2 Bedroom Classic42
2 Bedroom Deluxe86
3 Bedroom Classic44
3 Bedroom Deluxe66
3 Bedroom Penthouse4
4 Bedroom Deluxe45
4 Bedroom Penthouse1
5 Bedroom Delux21
Premier Penthouse3

2 Bedroom (Type 2D)

The 2 Bedroom Premium, at the size of 689 square feet (64 square meter), is one of the perfect unit for both investors, singles and couples.

The layout of the unit is very regular, and the size of both the master and common rooms are able to fit in King and Queen size beds respectively. Because of its regular layout, the arrangement of furniture will be easy as there aren’t any sharp corners.

3 Bedroom (Type 3C)

For new couples or couples with 2 kids, the 3 Bedroom would be a better option. The unit size of 1,055 square feet might sound a bit small for some of you, but when you take a look at the actual unit, it is not that small. The regular layout of the whole unit allows you to have maximized space utilization, with no wasted space between furnitures.

The master room, not taking into consideration the walk-in wardrobe and attached bathroom, allows a king-size bed to fit into the room and still provide a good walking space within the room. A small dressing table to go along inside the room is still possible.

If you have 2 children and want to give them their respective privacy, this unit allows you to do so. Both the rooms allow for a queen size bed to sit right in the center. You are still able to have a good walking area around the bed.

Should you not require both the rooms reserved for your children, one of them can be used as a study cum guest room, with a study table, beside a super single bed.

The size of the hall, allows you to have both the living and dining area separately. The design placed the see-through kitchen right beside the dining hall, which provides the meal to be placed with lesser movement.

Lastly, the unit, albeit only 1,055 square feet, is able to have a Household shelter. Many times, this will be used as a form of a storeroom. Should you visit other projects that provide a 1.055 square feet unit, there hardly is any storeroom. Therefore, depending on your needs, a 3 bedroom in Kopar @ Newton does give you the value for money investment.

5 Bedroom (Type 5C2)

The 5 bedroom unit in Kopar provided a size of 1,819 square feet comes with a direct access from a private lift. This unit is ideal for family of 3 generation.

For the parent, they have a choice of either putting up in Bedroom 5, which is on one side of the hall, and comes with an attached bathroom and it has the full privacy of their own. Alternatively, they can comfortably stay in the Junior Suite, which has a longer walkway into the room. Personally, I will prefer to have them staying in the junior suite as the aged parents don’t feel left out.

The master bedroom comes with an attached walk-in wardrobe and most importantly, the bathroom comes with 2 basins. some couples might know that having 1 basin can be challenging in the morning.

Personally, with the size available in the hall, it is able to allocate a good space for family bonding, where the family can sit together after a meal to chat and bond. The lifestyle in Singapore is so stressful that many people have unknowingly neglected their family members.

Location

Kopar@Newton is located at the junction of Kampong Java Road and Newton Circle. The physical address of the two-block of the building is along 6 and 8 Makeway Avenue, Singapore 228606 and 228607 respectively. Across the development is Newton Hawker Center, a very popular hawker center which is visited by many tourists as well.

MRT Station

The nearest MRT station from the development will be Newton MRT Station, which is about 400 meters away, which would take you less than 6 mins to reach by foot. Newton MRT station is the interchange station for both the North South Line and Downtown Line, which brings you to most of the shopping areas in Singapore such as Orchard Road, City Hall, Bugis and Chinatown.

For working professionals, the MRT will also bring you to most of the business hubs in Singapore, such as Raffles Place, Marina Bay Financial Center, Suntec City, Tampines Hub.

Shopping and Dining

Very localised eating areas such as Newton Hawker Centre, Tekka Market and Food Centre, Whampoa Makan Place and Market, and more are within 2KM of reached.

Should you want to enjoy more comfortable and international cuisines, they are available in various shopping malls that are also within 2 KM reach. Malls such as United Square, Ngee Ann City, The Centrepoint, and lots more. These malls not only provide dining but also is a good place to shop.

Novena MRT station, which is just a station away from Network is a place you must not miss. The 2 biggest supermarket operators, Cold Storage and NTUC Fairprice are both located near to Novena MRT Station.

Schools

Schools are a key consideration for many young parents. Besides the convenience of getting from place to place, Kopar@Newton also has some of the most popular schools around.

Anglo Chinese Junior School, Saint Joseph’s Institution Junior School, Anglo Chinese Primary School are all within 1KM and schools such as Saint Margaret’s Primary School, Singapore Chinese Girls Primary School are within 2KM.

If you are an expatriate, currently working in Singapore, you might want to consider sending you children to international schools such as ISS International School, Chatsworth International School, Dimensions International College which are within 2KM.

Accessing to Highway

The developer has not neglected the drivers. Accessing to CTE, which is one of the highways that cut across many towns of Singapore is just 5 mins away.

Another highway that brings you between east and west of Singapore, will be the PIE. It takes you 10 mins to hit the PIE from Kopar@newton.

Rental Return

As the project is located just outside the crowded Orchard Road, the rental demand is still going strong. Basically, the rental asking, as compared to those in the Orchard area can be 25% lower. Due to the current economical situation, that 25% saving, with just 5 mins train rides will be of great consideration for potential tenants.

As for the investment, Kopar@Newton is about 30% lower as compared to those in the center of the Orchard area. Looking at the percentage, you, being an investor will be profiting from both sides, the investment, which is 30% lower and rental, which is only 25% lower.

Conclusion

Personally, Kopar@Newton would be my key consideration if I am an investor or if I have children going into primary school.

Firstly – Rental Return

Kopar@Newton is not in the main shopping streets of Singapore, but it is just an MRT station away. In term of rental, it will be lower than those in Orchard. Question asked will be, why pay 25% higher for a 5 mins train ride.

If I am a tenant, I will consider paying the lower rental for the 5 mins train ride.

Secondly – Transport

The MRT station is only 400 Meters away. For those that work in the Business District, the MRT line will be of great help. Additional investment in cars may not be required.

If driving is a must for you, the 2 main highways of Singapore is less than a 10 mins drive away. Hitting onto the highway brings you to most of the estates in Singapore.

Buying New Launches

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Buy Sell Renting of your property

Lewis became part of the family of Orange Tee and Tie in 2020. He has been in real estate since 2005. Together with him, he brought along a long history of experience in both HDB and Private property.

His personal belief is, to share the truth and facts with everyone. With that, he has good credibility with his client. His strong belief in a partnership and not the client made him successful in this career also.

Should you have any queries, relating to Kopar@Newton, or other properties that are of your interest. Drop me a WhatsApp HERE. I will respond to you soonest possible.