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Thread: Leasehold versus Freehold - the Comparison Continues (2016)

  1. #151
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    10 Millions and you imagine many people coming to Singapore to be JobLESS?
    Ha ha ha!

    With Singapore's economy growing at 1 to 3%, you think Singapore has enough jobs for 10M population?

    Quote Originally Posted by Kelonguni View Post
    Look beyond the 7 mil in 2030. Plans are probably in progress for 10 mil by 2050.

    Open eyes and see how intensely they are building developments along expressways and expanding roads...

    Infrastructural competency before population increase. Not a matter of if, but when.

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    Quote Originally Posted by Kelonguni View Post
    Look beyond the 7 mil in 2030. Plans are probably in progress for 10 mil by 2050.

    Open eyes and see how intensely they are building developments along expressways and expanding roads...

    Infrastructural competency before population increase. Not a matter of if, but when.
    I think price going to cheong up. Hougang ave 7 will be launched at $1300psf.

    https://www.dbs.com.sg/treasures/tem...and_prices.xml

  3. #153
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    Several Fallacies in your comments:

    1) Developers buy without knowing for certain whether they can increase plot ratio

    2) Sellers won't sell at $518 psf ppr for their 99-years leasehold properties if there is no increase in plot ratio (because the replacement properties will be much more expensive)

    3) If plot ratio is already 2.8 for most new high-rise nowaday, it is most likely there will be no plot ratio increase for next 100 years (ya, your 99-years LH will expire first)!


    Quote Originally Posted by Kelonguni View Post
    But the sellers do factor in the potential for increased land use intensity if developers bite and apply.

    Another example is Pearl apartments, can apply to increase land use intensity.

    Ultimately, the Govt has to encourage increased plot ratio everywhere, beginning with the low plot areas.

    Currently, there is a GCB area being sold and application made to convert to strata. The price factors in the potential for success in increasing plot ratio. No developer will bite if it's ratio cannot be confidently projected at their target price and intensity. In other words, the application should have some kind of approval for increased land use potential before the developer agrees to buy. This is different in principle to increasing plot ratio when building is standing, but in reality, it reserves the potential to profit for the owners and not new buyers.

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    Government's intent is not to let owners benefit from increasing plot ratio while the property is still standing. Developer can apply for increase in plot ratio only after acquiring the land and provided the area around the land has plot ratio higher than the land it has acquired. The ruling is very clear.

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    Quote Originally Posted by teddybear View Post
    10 Millions and you imagine many people coming to Singapore to be JobLESS?
    Ha ha ha!

    With Singapore's economy growing at 1 to 3%, you think Singapore has enough jobs for 10M population?
    Ahahaha.

    So funny ... But true.

    Everyone should read PY's Neither Civil Nor Servant.

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    Just do a simple check on which development after enbloc and torn down, rebuilt with the same plot ratio and height. Which one?

    Quote Originally Posted by Amber Woods View Post
    Government's intent is not to let owners benefit from increasing plot ratio while the property is still standing. Developer can apply for increase in plot ratio only after acquiring the land and provided the area around the land has plot ratio higher than the land it has acquired. The ruling is very clear.
    The three laws of Kelonguni:

    Where there is kelong, there is guni.
    No kelong no guni.
    More kelong = more guni.

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    300psf ppr in 1997 could get a plot in tanjong rhu (leasehold). Land price definitely keeps going up. that is why as long as singapore long term prospect is stable, i'm confident of property here.

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    Quote Originally Posted by star View Post
    I think price going to cheong up. Hougang ave 7 will be launched at $1300psf.

    https://www.dbs.com.sg/treasures/tem...and_prices.xml
    Amazing...

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    Quote Originally Posted by Hakuho View Post
    Rio Casa was completed in 1986.

    Assuming an initial lump sum purchase payment of $400,000 in 1986.

    The PV of $400,000 based on 2.5% compounding is about $850,000. This is the figure for normal incremental of asset value.

    But I doubt that it was $400,000, which could buy much better ones in 1986.

    There were 6 sales transacted last year, congratulations to the lucky six. Too bad for those who just sold.
    850K was indeed the price paid for units transacted just before rio casa was en blocked (in 2016?). very good ROI!

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    Quote Originally Posted by alfanutz View Post
    Actually I was trying to say that the owners got a good deal. The $518 psf ppr isn't relevant to the owners.
    oh, i see. Yes, good deal.

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    Quote Originally Posted by Amber Woods View Post
    Government's intent is not to let owners benefit from increasing plot ratio while the property is still standing. Developer can apply for increase in plot ratio only after acquiring the land and provided the area around the land has plot ratio higher than the land it has acquired. The ruling is very clear.
    Poor Ambr has repeated the same message BUT he is not reading it right ...

    Reminds me of our ABSD, SSD 'debate'.

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    That ABSD / SSD I do admit I was stuck in a certain mode, and I did admit my error in considering it.

    But this, think again. When developers aim to buy and enblockers aim to sell, surely they will consider the POTENTIAL of the increased area's plot ratio, and the chance of success in applying to intensify land use, not to mention the likelihood of already pre-approved conditional allowance to increase land use.

    Quote Originally Posted by Hakuho View Post
    Poor Ambr has repeated the same message BUT he is not reading it right ...

    Reminds me of our ABSD, SSD 'debate'.
    The three laws of Kelonguni:

    Where there is kelong, there is guni.
    No kelong no guni.
    More kelong = more guni.

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    https://www.theedgeproperty.com.sg/c...t-next-en-bloc

    "Interestingly, tenure (freehold versus leasehold) and location (whether the property is located in Central or Non-Central Region) were statistically insignificant."

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    But they didn't mention something that I emphasized:
    That is, if both freehold and leasehold at same locations get en bloc, the freehold will get a price that is easily 35% to even 100% more than 99-years leasehold (since 99-years leasehold has value of $0 at end of 99-years)!


    Quote Originally Posted by anythingwhatever View Post
    https://www.theedgeproperty.com.sg/c...t-next-en-bloc

    "Interestingly, tenure (freehold versus leasehold) and location (whether the property is located in Central or Non-Central Region) were statistically insignificant."

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    Quote Originally Posted by Kelonguni View Post
    Just do a simple check on which development after enbloc and torn down, rebuilt with the same plot ratio and height. Which one?
    All en bloc sites bought by developers were rebuilt based on existing plot ratio. So far, I have not learnt that any developer attempt to increase the plot ratio after acquiring the land.

    Do not be mistaken with existing developments not fully built to their full plot ratio. Many older developments were not built to their full plot ratio when they were constructed to give the development more common space and better quality living unlike current developers who build to their full plot ratio to maximize profits.

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    Quote Originally Posted by Kelonguni View Post
    That ABSD / SSD I do admit I was stuck in a certain mode, and I did admit my error in considering it.

    But this, think again. When developers aim to buy and enblockers aim to sell, surely they will consider the POTENTIAL of the increased area's plot ratio, and the chance of success in applying to intensify land use, not to mention the likelihood of already pre-approved conditional allowance to increase land use.
    You are absolutely right, except for the pre-approval part.

    Unless I read her wrongly also, Amber is saying that the Developer should not assume a blanket approval when he submits an application to URA. Therefore implying that the system has no pre-approval process; I don't know if this is true but she appears to be an insider to know more.

    In other words, the Developer can assess the potential and assume whatever approval but he has to carry the risk should the assessment turns out wrong. Actually the Developer is not stupid la. For example, older condos they all have open carparks which can be rebuilt underground etc.

    I think we should all relax, I am sure that the market moves by fundamentals and not by the activity in this or other property forum. There is no bear in property market; how do you short a property market? Anyone who is not vested IS a potential buyer tomorrow, anyone renting today contributes to the rental demand. To me, the more the merrier. No?

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    Quote Originally Posted by anythingwhatever View Post
    https://www.theedgeproperty.com.sg/c...t-next-en-bloc

    "Interestingly, tenure (freehold versus leasehold) and location (whether the property is located in Central or Non-Central Region) were statistically insignificant."
    This country is so young, when compared to UK for example.

    None of the HDB built has crossed the 60th year of 99-years lease, but in another 5-10 years we will see the volume. Then, we should see the advantage of freehold status.

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    If I am wrong Teddy would already have come in. He is the insider with a blind spot.

    But what makes you think Amber is an insider? From the postings, he/she is not even vested in the private market.

    Quote Originally Posted by Hakuho View Post
    You are absolutely right, except for the pre-approval part.

    Unless I read her wrongly also, Amber is saying that the Developer should not assume a blanket approval when he submits an application to URA. Therefore implying that the system has no pre-approval process; I don't know if this is true but she appears to be an insider to know more.

    In other words, the Developer can assess the potential and assume whatever approval but he has to carry the risk should the assessment turns out wrong. Actually the Developer is not stupid la. For example, older condos they all have open carparks which can be rebuilt underground etc.

    I think we should all relax, I am sure that the market moves by fundamentals and not by the activity in this or other property forum. There is no bear in property market; how do you short a property market? Anyone who is not vested IS a potential buyer tomorrow, anyone renting today contributes to the rental demand. To me, the more the merrier. No?
    The three laws of Kelonguni:

    Where there is kelong, there is guni.
    No kelong no guni.
    More kelong = more guni.

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    http://www.teakhwa.com/whatisenbloc.htm

    https://www.ura.gov.sg/uol/circulars/2012/jun/dc12-06
    Additional GPR and storey height proposed will require prior clearances from the Land Transport Authority (LTA) on traffic and car parking matters and from other relevant agencies. Such proposals must also comply with all development control guidelines for PW developments such as the use quantum controls, building setbacks, etc.

    https://www.ura.gov.sg/uol/master-pl...ng-Height-Plan

    https://www.ura.gov.sg/uol/circulars/2000/apr/dc00-08
    The three laws of Kelonguni:

    Where there is kelong, there is guni.
    No kelong no guni.
    More kelong = more guni.

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    Quote Originally Posted by Kelonguni View Post
    If I am wrong Teddy would already have come in. He is the insider with a blind spot.

    But what makes you think Amber is an insider? From the postings, he/she is not even vested in the private market.
    I said she APPEARS to be, not she IS as you wrote.

    But whether she is or not is beside the point. Whether she is vested or not, lagi beside th point.

    You happy can liao.

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    If en bloc site is below the baseline plot ratio which is mostly the case for older development, the developer can max it out. But DC is payable. One good eg is Minton

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    My builder told me a story before.

    There was this case which involved a pair of semi-ds; one of them had been reconstructed to 3 storeys, its neighbor was an original 1-storey. A buyer came along, bought the old semi-d, his architect then submitted a BP application for new erection of 3-storeys.

    URA denied the application, stating the area height limit etc. URA didn't bother to explain how his neighbor had gained the approval.

    No choice, llst. His unit is forever dwarfed by his neighbor's. Not a big deal, but on fengshui perspective the buyer has been unhappy since.

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    Saying she appears to be, is the same in meaning as you think she is. Surely I can't say what makes you think she appears to be?

    If she is not vested and just presents one side of the argument (the not-worth-it side), would you trust her as an insider?

    I also think appears to be a her but no way to be sure.

    In forum discussion we have our views, but are all trying to learn how things work. Any contrarian views supported by official documents, I will be glad to hear them out.

    Quote Originally Posted by Hakuho View Post
    I said she APPEARS to be, not she IS as you wrote.

    But whether she is or not is beside the point. Whether she is vested or not, lagi beside th point.

    You happy can liao.
    The three laws of Kelonguni:

    Where there is kelong, there is guni.
    No kelong no guni.
    More kelong = more guni.

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    Quote Originally Posted by Kelonguni View Post
    Saying she appears to be, is the same in meaning as you think she is. Surely I can't say what makes you think she appears to be?

    If she is not vested and just presents one side of the argument (the not-worth-it side), would you trust her as an insider?

    I also think appears to be a her but no way to be sure.

    In forum discussion we have our views, but are all trying to learn how things work. Any contrarian views supported by official documents, I will be glad to hear them out.
    Think you should read again what she said. Actually what she said are the same as what you said, except the part on the assumption of plot ratio revision. Whether there is a pre-approval process in the system, it is not really important. A lot of things can be 'pre-approved' over a coffee.

    A speculation on plot ratio revision, or ABSD revision, is just speculation. You can buy an old condo with speculation that it will be en-bloc'ed; it may happen but then it may not.

    So what are the factors that support your speculation?

    Look at 2013 Masterplan which drives the so-called decentralisation developments, it is just 4-years old. Of course, you can speculate a plot ratio revision to be in the new Masterplan coming out next year. It may happen but then it may not.

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    Property is a long term play for me. For now is only buy and buy when can afford. I tend to go for new or near new properties. Not looking at speculation on plot ratio changes by the next Masterplan, but it will definitely happen in 10, 20 years. The longer the horizon, the greater the chance to ultimately reap the benefits like the recent enbloc sales, though that itself is a tough hurdle to clear.

    http://m.stproperty.sg/articles-prop...lysts/a/103491

    And I did read what Amber said that there is no revision to plot ratio whilst the building stands, but there is half a dozen more ways to intensify. Height restrictions can disappear due to airbase relocation, rezoning of land, change in number of stories allowed for each fixed plot ratio etc. It is not a given at a fixed point or fixed location but it will be a given if you read the signs carefully.

    Quote Originally Posted by Hakuho View Post
    Think you should read again what she said. Actually what she said are the same as what you said, except the part on the assumption of plot ratio revision. Whether there is a pre-approval process in the system, it is not really important. A lot of things can be 'pre-approved' over a coffee.

    A speculation on plot ratio revision, or ABSD revision, is just speculation. You can buy an old condo with speculation that it will be en-bloc'ed; it may happen but then it may not.

    So what are the factors that support your speculation?

    Look at 2013 Masterplan which drives the so-called decentralisation developments, it is just 4-years old. Of course, you can speculate a plot ratio revision to be in the new Masterplan coming out next year. It may happen but then it may not.
    Last edited by Kelonguni; 27-05-17 at 10:01.
    The three laws of Kelonguni:

    Where there is kelong, there is guni.
    No kelong no guni.
    More kelong = more guni.

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    With respect to plot ratio revision, my take is that height restriction is more deadly. The Shun Fu enbloc site can't build taller than 30 storeys though plot ratio suggest can be done.
    The Payar Lebar area will benefit from a restriction in building height.
    Sorry to digress.

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    Quote Originally Posted by Hakuho View Post
    You are absolutely right, except for the pre-approval part.

    Unless I read her wrongly also, Amber is saying that the Developer should not assume a blanket approval when he submits an application to URA. Therefore implying that the system has no pre-approval process; I don't know if this is true but she appears to be an insider to know more.

    In other words, the Developer can assess the potential and assume whatever approval but he has to carry the risk should the assessment turns out wrong. Actually the Developer is not stupid la. For example, older condos they all have open carparks which can be rebuilt underground etc.

    I think we should all relax, I am sure that the market moves by fundamentals and not by the activity in this or other property forum. There is no bear in property market; how do you short a property market? Anyone who is not vested IS a potential buyer tomorrow, anyone renting today contributes to the rental demand. To me, the more the merrier. No?
    The Master Plan 2014 is the latest on plot ratio for all land in Singapore. Among other things, developer base on the MP 2014 plot ratio to price their bid for en bloc sale. If an existing development baseline is lower than the allowable plot ratio, the developer has to pay the differential premium to maximize the full plot ratio. If the existing baseline is already above the allowable plot ratio (like Amber Skype with existing baseline of 3 but MP 2014 plot ratio is only 2.8), the developer can continue to build base on its existing baseline and hence no differential premium payable.

    Thus far, no developer has applied to URA after acquiring the land for higher plot ratio because there is really no incentive for developer to do so because the development charges is rather high. There is no additional profits to be made to apply for increase in plot ratio.

    However, (this is my personal assumption and URA has been silenced on this part),
    if the surrounding area has plot ratio higher that what the land the developer has acquired, URA may ask the developer to pay for the differential premium or development charges if the developer submit its building plan for approval. My assumption is that URA will want to ensure the plot of land is redeveloped to maximize land used. Having said that, thus far URA has not done so except for HDB Sers land (like Sims Urban) where URA increased the plot ratio to 3.5 (previously was 2.8 when HDB flats were standing there) and tender out the land base on plot ratio of 3.5. This practice by URA is to strictly prevent owners or developers (who already acquired the land) any possible windfalls.

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    Quote Originally Posted by Khng8 View Post
    With respect to plot ratio revision, my take is that height restriction is more deadly. The Shun Fu enbloc site can't build taller than 30 storeys though plot ratio suggest can be done.
    The Payar Lebar area will benefit from a restriction in building height.
    Sorry to digress.
    Height restriction will determine if the development is compact or more well spread. Take for example, Sims Urban, the plot ration is 3.5 but there is height restriction because it is near to Paya Lebar Airbase. Hence, developer still maximize the plot ratio of 3.5 and squeeze all the blocks so close to each other. If there is no height restriction, for plot ratio of 3.5, the development is at least 36-storey. Sims Urban is only 18 storey and you will notice the blocks are so close to one another because the developer want to maximize profits.

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    Quote Originally Posted by teddybear View Post
    ...
    If the property is a freehold, then the owners will get about $783 MILLIONS (and not $575M)!
    The owner will get paid $705 psf ppr for the properties!
    That is, they will get 36% MORE! (=(705-518)/518)
    ...
    do note that the extra $208mio consist of increased plot ratio & top up lease to 99years.
    Quote Originally Posted by Kelonguni View Post
    Good attempt. At 36% higher price tag developers won't buy.
    ...
    is there a difference to the developer paying $600mio (example) to the owners and paying $575mio to owner +25mio (example) to govt to top up lease. both come up to $600 mio.

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    Quote Originally Posted by Amber Woods View Post
    ...
    Thus far, no developer has applied to URA after acquiring the land for higher plot ratio because there is really no incentive for developer to do so because the development charges is rather high. There is no additional profits to be made to apply for increase in plot ratio.
    ...
    interesting, applying to Rio Casa's case.
    $575mio translates to 575/36811.1/2.1/10.764 = 691psf ppr
    $(575+208) translates to 783/36811.1/2.8/10.764 = 706psf ppr
    (can somebody crosscheck the figures? like plot ratio.)

    perhaps what developer lose in margin (15psf ppr), they more than make up in volume ?
    is the 208mio consist wholly of top up lease or does it include increasing plot ratio.

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