This case is really a shake-up of Leasehold properties whether private or public. More test case to follow.
This case is really a shake-up of Leasehold properties whether private or public. More test case to follow.
An article in todayonline said the original owner paid $5000 in1961 for this terrace house. Just unfortunate that their parents bought the wrong terrace house. They could have bought a FH landed in better area with the same $5000 and it would easily value at $2-3 million today. Hence, this is a lessen learnt to all LH landed property owners.
They bought the correct House, the problem is their software not updated.
They bought the WRONG house lah! Plain simple as that!
Warren Buffett said if you bought the right stock (just like buying the right property, like Freehold property in prime location), you do nothing for next 30 years and you still will still makes lots of money!
If you bought the wrong stock (like buying depreciating leasehold property (regardless of landed or non-landed like apartments, condos etc)), then you have to be like Soros know when to flip and sell quickly to the next greater fool.......
Then you have to ask yourself, are you as smart as Soros? Have you been making lots and lots of money from flipping stocks and forex etc? If you don't, what makes you think you can make money flipping property?
Anyway, Soros always buy at near cheapest price and sell near highest price!
So if you learn the lesson from Soros: Are you going to buy OCR private property at THOUSAND YEARS HISTORICAL PEAK PRICE or going to sell (so that you can make money)?
Last edited by teddybear; 25-06-17 at 11:42.
Let me be the fool. Sell me for $5000 after depleted 57 years lease.
The three laws of Kelonguni:
Where there is kelong, there is guni.
No kelong no guni.
More kelong = more guni.
Don't think they will sell you also, since they count just like you and Archacon:
Rental per month $3000 x 36 months = $108,000 total rental!
So they would want to sell you $108,000 (because that is the rental stream they will get if they don't sell)!
May be they will sell you at $5000 from when they still have <1 year lease left?
The three laws of Kelonguni:
Where there is kelong, there is guni.
No kelong no guni.
More kelong = more guni.
Ha ha ha!
Precisely because they thought the same way like you, that is why they are at the DEAD END now without a property over their head! What yield are you talking about?!
Imagine they bought at $5000 in 1961 for a freehold terrace house, they would be able to live in it until they die (even if they live until 150 years old!), and still leave behind a freehold terrace house that is easily valued at >$3 Millions!.
You want to talk about yield? Then average yield of the freehold terrace house = ($3M / $5000)/57 years = 1,052% p.a.!
I don't know how you get your compounded yield to be 6%. Let's do easier calculation using average yield for your 60-years leasehold terrace house = ($100k / $5000) / 57 years = 35% p.a.
Now that they acted like what you thought is wise to do, they end up with 60-years leasehold terrace house with 3 years expiry and market value of say $100k and going to expire to $0 value in 3 years time without a roof over their head and no more money to buy another property to live in!
Don't really have to look at historical for pricing. The underlying market dynamic is not static, it changes over time, ALL the time.
The most recent transaction of Southbank is $1.45 mil, 958 sf unit (99LH, 2006).
The most recent rental transaction is $4000 pm.
$4000 pm over 30 years is $1.44 mil.
(There you go, the quick answer to your question. Nothing to do with money printing right?)
Balam is HDB, meaning there is no land value to begin with. Maybe a “land squatting value” can be applied?
Then, what is the multiplier to use for Balam today? How about for the 10-years projection? How about the next next 10-years projection? And going on, at the 99th year the value is still zero tiobo?
OK lah, maybe there is SERS sibo?
But what is the attraction of SERS, the government is basically paying you the market rate to possess on one hand, and selling you another at market rate on the other hand (I confess not knowing all the details).
SERS is unlike a private enbloc, where the owner will get maybe $5 mil instead of $2 mil without an enbloc.
Oh, forgot to add that based on your claim of yield for the 60-years leasehold terrace house, now at 57-years old, this 60-years leasehold terrace house has average yield = 35% p.a.
Ironically, when this 60-years leasehold terrace house reaches 60-years old, it will then has an average yield = 0% p.a.!
Now, what kind of "good" investment will become $ZERO the longer you hold them?! Ironic and epic stupidity isn't it?!
The three laws of Kelonguni:
Where there is kelong, there is guni.
No kelong no guni.
More kelong = more guni.
Hence, LH landed property will become more run down as which owner in the right frame of mind will renovate or rebuilt the house at a cost of at least $500k. This also applies to LH condo nearing to their lease. Someone posted a question in the forum recently on why he is just a tenant in a HDB flat where HDB is the landlord and why are they paying property tax.
First is the Macpherson MRT, then the Matter MRT.
Once the landed move out and they start building near the MRT that is where the fun begin.
Like it or not it wouldn't be cheap.
If you spend Billions of Dollar on the land, whether you like it or not the building will cost more.
Simple logic, Billions here, Billions there and the Land is cheaper and the property is cheaper is it possible.
HDB, Landed, PC price rise depends on the money pour into the land.
UN once did a calculation to build another Singapore City and their conclusion is next to impossible.
https://www.onemap.sg/
https://www.ura.gov.sg/maps/?service=MP
SLA takes legal possession of 3 landed homes at Merpati Road
SINGAPORE: Three freehold landed properties at Merpati Road were legally possessed by the Singapore Land Authority (SLA) on Tuesday (Apr 25), as part of the land acquisition process for the future Mattar MRT station on Downtown Line 3 (DTL3) and surrounding developments.
Read more at http://www.channelnewsasia.com/news/...i-road-8791026
Read more at http://www.channelnewsasia.com/news/...i-road-8791026
People talk about A you talk about B.
In any case, NOBODY disagreed with what you wrote above even though it was been repeated ad nauseam.
BUT.
I don't know if you realise how contradictory it is, between what is being espoused and the LH nature of properties being held.
Already calculated but you also don't know how to interpret the data?
Right now, Southbank is being transacted at a price assigning $0 to your share value of the land on which the building sits.
In other words, the buyer (if he is a proxy investor) who paid $1.45 mil recently in April will be able to enjoy full coverage of rental over cost, and still able to reap the residual share value of land.
Don't be so serious about A and B, now I talk C ok.
https://techcrunch.com/2016/10/28/go...an-encryption/
Last edited by Arcachon; 27-06-17 at 01:30.
The example above shows the baseline rental value using simple calculation.
To arrive at the projected rental value, we have to input the funding cost and the rental trend in the pricing model.
pricing model, rental value d(funding cost, rental trend)
Funding cost is not the bank financing interest rate, but the hurdle rate that a buyer can normally obtain in alternative investment such as stock, bond, forex etc. And yes, including CPF interest rate.
In other words, property is but an alternative in the universe of investment options.
Rental trend is a projection of rental supply and demand, and how the imbalance can influence rental prices in the foreseeable future.
It is a common practice to compare the pricing of a new launch with the resale transactions done of properties in the vicinity.
It used to be so easy, and in a buoyant, rising property market the error caused by this kind of simplistic comparison was camouflaged.
Actually it is not about comparing the resale transactions of surrounding properties , or the asking prices, but the rental value of a property being assessed.
Our property tax is based on rental value which IRAS called it as annual value.
In fact, all decisions related to a property, that is whether to buy or rent, whether to monetise a property in the portfolio, can be traced to its rental value.