Condo

Condos in Singapore are open to all Singapore Citizens and Permanent Residents of Singapore, including foreigners. Buyers are required to provide the necessary documents and show evidence of financial capacity that they are able to finance it.

For those who live in a new BTO or resale HDB flat, or an Executive Condominium (EC), kindly note that you will have to fulfil the five years Minimum Occupation Period (MOP) of stay in your property before you can purchase your next or a second property.

When investing in a property, many potential homebuyers attempt to predict if home values are rising or falling while also paying attention to mortgage rates.

Any investment carries some form of risks especially if you were to buy a big ticket item such as a property. Besides, given the outlook of foreigners allowing to work in Singapore has been on a decline due to tighter immigration policies for foreigners, pushing housing market rental to a low.  

KEY TAKEAWAYS:

To book a new condo, you should have the following documents ready:

1. Copy of NRIC, front and back.
2. Expression of Interest form (EOI) completed and signed by all parties.
3. A cheque of 5% of the selling price as initial deposit for paying the developer with their project account name.

 The required documents requested from developer may vary on a case-by-case basis. For instance, if buyers were on commission basis or a variety of allowances earned aside from the base pay, additional documents for proof is required. 

All documents will be returned to potential buyers should they not able to select a unit during the launch period.

Freehold property can be held by owner indefinitely. As for leasehold, a 99-year leasehold property will expires and the land will be returned to the state.

Freehold classification of the property can also be 999-year leases and is quite similar to freehold. Although freehold property can be held indefinitely or 999-year, there are consideration that will allow the Government to reclaim the land for infrastructure development based on the URA master plan for Singapore. For example a four storey thomson road freehold property is acquired for development of the North-South corridor. Don’t forget there is also a possibility of en-bloc redevelopment potentials and one will have to give in to this.

So, freehold or leasehold? The answer is not easy to grasp. Some common conclusions that was highly noted was:

• Price differences occurs at 21 year mark as it tends to show some depreciation of the selling price as oppose to the freehold
• Theoretically, freehold units tend to fetch better price during en bloc but if development cannot be developed to the same height then we will see a lower en bloc price for that freehold condo.
• Leasehold is better for its rental yield. if you were to compute the yield, the formular is based on the annual rental income, divided by the total cost of the property. Hence, lower cost, higher the rental yield.
• freehold property investment vs leasehold property generally tends to be 10% to 20% higher compared to leasehold ones. Over the last 10 years, we noticed that the average resale price of freehold condos vs leasehold in the CCR region are slowing closing its gap. So, homeowners looking to purchase a property for own-stay, freehome is’nt necessary better. Family structure changes with members migrating to other countries, children moving out to form their own family etc.

These are some of the considerations you may want to take note. There may be other reasons as to why one would prefer a freehold or a leasehold. Another note to consider, to consider a freehold to hold as legacy for next generation, a freehold landed property would be better choice.