Comments on: Freehold vs Leasehold http://novice.alvinlim.info/2009/04/20/freehold-vs-leasehold/ Story about my journey as a novice in investment and money making Mon, 02 Jan 2012 02:45:38 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Alvin Lim http://novice.alvinlim.info/2009/04/20/freehold-vs-leasehold/comment-page-1/#comment-1397 Alvin Lim Tue, 21 Apr 2009 02:44:50 +0000 http://novice.alvinlim.info/?p=357#comment-1397 <b>@ boringest</b> The possibility of redevelopment is under the discretion of the state government, no? The question here is, even if your condo is a freehold property, what will happen if they plan to redevelop it? Will you still get back your land (or AIR for that matter) title? Hmm...in KL, I think there are still few areas which can be "moved". :P Oh, talking about Turf Club, I've heard of stories about KLCC at night. LOL. Guess horse racing here took a lot of victims last time? Singapore's land is quite scarce so anything freehold will definitely fetch a good price provided the location is not too bad. Well, even if it's leasehold, the property price is still very good because...well...there's only limited land left =_= unless, the lease is like the one the old couple has - 5 years. The gov might just let the lease expires and reclaim the land. Cheaper that way. Conclusion, I think leasehold with > 40 years in a prime location can still fetch a pretty good price. :P <br/> <b>@ Damien</b> Well, you do have a point there. Maybe that's why freehold properties in areas which are CLOSE to prime locations, are becoming ridiculously expensive? But hm...I still cannot think of a condo being a freehold. The developer can just ignore your condo for good, without offering any redevelopment. But it's hard to predict since we don't have any real life example on such issues yet...and I don't think I can live till 2090 :P @ boringest
The possibility of redevelopment is under the discretion of the state government, no? The question here is, even if your condo is a freehold property, what will happen if they plan to redevelop it? Will you still get back your land (or AIR for that matter) title?

Hmm…in KL, I think there are still few areas which can be “moved”. :P Oh, talking about Turf Club, I’ve heard of stories about KLCC at night. LOL. Guess horse racing here took a lot of victims last time?

Singapore’s land is quite scarce so anything freehold will definitely fetch a good price provided the location is not too bad. Well, even if it’s leasehold, the property price is still very good because…well…there’s only limited land left =_= unless, the lease is like the one the old couple has – 5 years. The gov might just let the lease expires and reclaim the land. Cheaper that way.

Conclusion, I think leasehold with > 40 years in a prime location can still fetch a pretty good price. :P

@ Damien
Well, you do have a point there. Maybe that’s why freehold properties in areas which are CLOSE to prime locations, are becoming ridiculously expensive?

But hm…I still cannot think of a condo being a freehold. The developer can just ignore your condo for good, without offering any redevelopment. But it’s hard to predict since we don’t have any real life example on such issues yet…and I don’t think I can live till 2090 :P

]]> By: Damien Tan http://novice.alvinlim.info/2009/04/20/freehold-vs-leasehold/comment-page-1/#comment-1396 Damien Tan Tue, 21 Apr 2009 01:33:56 +0000 http://novice.alvinlim.info/?p=357#comment-1396 In Sg, the lack of land forces land recycling to be done at a faster rate so yeah, its already happening. The developer will offer a replacement unit or a unit of comparable value in some other area. MY still has plenty of land and it could be year 2090 before we see high-rise condos torn down and rebuilt. Its the uncertainty of the future that will affect resale value in my opinion, and this gives an edge to freehold. In Sg, the lack of land forces land recycling to be done at a faster rate so yeah, its already happening. The developer will offer a replacement unit or a unit of comparable value in some other area. MY still has plenty of land and it could be year 2090 before we see high-rise condos torn down and rebuilt. Its the uncertainty of the future that will affect resale value in my opinion, and this gives an edge to freehold.

]]> By: boringest http://novice.alvinlim.info/2009/04/20/freehold-vs-leasehold/comment-page-1/#comment-1392 boringest Mon, 20 Apr 2009 17:53:53 +0000 http://novice.alvinlim.info/?p=357#comment-1392 well, condos don't last 99 years but if it's a good area, it might be redeveloped! This I think is especially true in KL, where the planning has been done very haphazardly! E.g. Selangor Turf Club was moved out and now the land became KLCC! In S'pore where land is scarce, some 30-40 year old freehold condos e.g. in Farrer Park are sold for 1.5x the current market price to be knocked down and reconstructed! Or if you own a landed property in a planned area for a high-rise condo, you might get 6-10x what you paid for in the 1st place! And as for leasehold, you'll never know what the government plans are... E.g. recently in S'pore, an old couple who owns an Orchard Road terrace house with only 5 year lease left was trying to sell their house for 20k without any buyers! Ppl are afraid it'll be earmarked for another mall or office building or high rise residential. <abbr><em><abbr><em>boringests last blog post..<a href="http://boringest.blogasian.com/2009/04/18/truly-malaysian-design-the-teh-tarik-hook/" rel="nofollow">Truly Malaysian Design - The Teh Tarik Hook!</a></em></abbr></abbr></em> well, condos don’t last 99 years but if it’s a good area, it might be redeveloped! This I think is especially true in KL, where the planning has been done very haphazardly! E.g. Selangor Turf Club was moved out and now the land became KLCC!

In S’pore where land is scarce, some 30-40 year old freehold condos e.g. in Farrer Park are sold for 1.5x the current market price to be knocked down and reconstructed! Or if you own a landed property in a planned area for a high-rise condo, you might get 6-10x what you paid for in the 1st place!

And as for leasehold, you’ll never know what the government plans are… E.g. recently in S’pore, an old couple who owns an Orchard Road terrace house with only 5 year lease left was trying to sell their house for 20k without any buyers! Ppl are afraid it’ll be earmarked for another mall or office building or high rise residential.

boringests last blog post..Truly Malaysian Design – The Teh Tarik Hook!

]]> By: Alvin Lim http://novice.alvinlim.info/2009/04/20/freehold-vs-leasehold/comment-page-1/#comment-1389 Alvin Lim Mon, 20 Apr 2009 02:57:12 +0000 http://novice.alvinlim.info/?p=357#comment-1389 <b>@ Damien</b> I believe condo owners have something called strata title. I'm not very sure in this. But from what i know, leasehold condo owner has this "land" in the air. :P Maybe that is why most condos are leasehold? Because ..well..no matter how good the management is, a condo cannot last 99 years =_= Same goes for linked house (or was it called town house?). Freehold is easier to sell if it is landed but it is also easier to sell because the price is not as expensive due to its location. By the way, places like Tropicana has around 40 years left before its renewal few years ago (if not wrong). And even before the renewal, the price is like > 800k to 1 mill. :P And a lot of people are still flocking over to get properties there. Same goes for the Bandar Utama incident where thousands of people queue up early in the morning to buy a leasehold landed property :P the price was like...700k? @ Damien
I believe condo owners have something called strata title. I’m not very sure in this. But from what i know, leasehold condo owner has this “land” in the air. :P Maybe that is why most condos are leasehold? Because ..well..no matter how good the management is, a condo cannot last 99 years =_= Same goes for linked house (or was it called town house?).

Freehold is easier to sell if it is landed but it is also easier to sell because the price is not as expensive due to its location.

By the way, places like Tropicana has around 40 years left before its renewal few years ago (if not wrong). And even before the renewal, the price is like > 800k to 1 mill. :P And a lot of people are still flocking over to get properties there. Same goes for the Bandar Utama incident where thousands of people queue up early in the morning to buy a leasehold landed property :P the price was like…700k?

]]> By: Damien Tan http://novice.alvinlim.info/2009/04/20/freehold-vs-leasehold/comment-page-1/#comment-1388 Damien Tan Mon, 20 Apr 2009 02:37:45 +0000 http://novice.alvinlim.info/?p=357#comment-1388 I was told freehold properties are easier to sell because if the property has 40 years left and the buyer is only 25 yrs old, the buyer may be discouraged as renewal may be difficult process and not guaranteed. The peace of mind factor is not there. I've got a question about freehold condos. If I'm not mistaken, most modern buildings are built to last 99 years. If the condo gets torn down after a hundred years, what would the owners be left with? Or would 200 people be claiming ownership over a 3-acre plot of land? Landed property owners don't have this problem because even if their house is flattened, they still have the land. More reason to buy landed property? I was told freehold properties are easier to sell because if the property has 40 years left and the buyer is only 25 yrs old, the buyer may be discouraged as renewal may be difficult process and not guaranteed. The peace of mind factor is not there.

I’ve got a question about freehold condos. If I’m not mistaken, most modern buildings are built to last 99 years. If the condo gets torn down after a hundred years, what would the owners be left with? Or would 200 people be claiming ownership over a 3-acre plot of land?

Landed property owners don’t have this problem because even if their house is flattened, they still have the land. More reason to buy landed property?

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