Economics of buying old LH condos

[bargainhunter]

I'm sure there are old threads on this but want to hear from you all what would be the economics in buying a old condo eg 20 yrs into a 99 yr lease. Convenient location in terms of transport and shops.
Eg
1what's a reasonable % price difference from newer projects ( presume similar size , same area etc)
2What would be offer price in the future if it en bloc
3what to do / what its worth in ten yrs when the market becomes relatively flooded with old condos that banks are less happy to fund and hence less ppl buy
Bottom line how do I know when it's value for money.

[devilplate]

another bargain hunter?!?!

2nd post only....

[Geylang OKT]

:confused: :D :hell-hath-no-fury: :) :scared-4: :( :doh:

[jasonyap]

20 years old LH condo ain't cheap right now !!!

[ysyap]

1. % difference can vary very much.... eg. 17 yr FH condo in Serangoon asking $850psf (99 LH probably lower in psf) vs 3 yr old 99y LH condo asking $1000 psf and a brand new FH condo asking $1100 psf. Depends on location and nearby amenities.

2. Offer price is always a tricky issue. Really depending on developer and residents. Must come to agreement but usually will be slightly above market price or at market price.

3. Tell you in ten years time...

Just look at the number of caveats lodged over last 3 years to get an idea how popular the project is to project the next 3 years. However, 99y LH project above 20years may not be much value for money in 10 years' time unless you know of some future news or development others are unaware... However, all else being equal, I will not enter it but its just my personal view...

[DC33_2008]

It is quite obvious that people who have bought from developer for the FH unit 17 years could be only $400-450psf. By selling at 859psf, they would have already made 100%. So, all newer condos, FH or LH will have to sell much higher given the high entry level.
1. % difference can vary very much.... eg. 17 yr FH condo in Serangoon asking $850psf (99 LH probably lower in psf) vs 3 yr old 99y LH condo asking $1000 psf and a brand new FH condo asking $1100 psf. Depends on location and nearby amenities.

2. Offer price is always a tricky issue. Really depending on developer and residents. Must come to agreement but usually will be slightly above market price or at market price.

3. Tell you in ten years time...

Just look at the number of caveats lodged over last 3 years to get an idea how popular the project is to project the next 3 years. However, 99y LH project above 20years may not be much value for money in 10 years' time unless you know of some future news or development others are unaware... However, all else being equal, I will not enter it but its just my personal view...

[chiaberry]

I'm sure there are old threads on this but want to hear from you all what would be the economics in buying a old condo eg 20 yrs into a 99 yr lease. Convenient location in terms of transport and shops.
Eg
1what's a reasonable % price difference from newer projects ( presume similar size , same area etc)
2What would be offer price in the future if it en bloc
3what to do / what its worth in ten yrs when the market becomes relatively flooded with old condos that banks are less happy to fund and hence less ppl buy
Bottom line how do I know when it's value for money.

My opinion for factors that make an old LH condo "good value" (but take it as opinion only and use yr own judgement):
1- Good location (short walking distance to MRT)
2- Well maintained and with reasonable management fees
3- Development not too big and not too small (not under 100 units and not over 300 units)

The 1st and 3rd factors will make it more likely to go en bloc in the future. The 1st and 2nd factors will make it easier to rent out and get good rental yield.

You cannot generalise too much. Depends on the individual development/location etc. You have to weigh in all of the above. But in my opinion, location is the single most impt factor to determine future value.

[bargainhunter]

Thanks for the tips... Any chance the gahmen will allow lease top ups in the future? Cant en bloc everything

I think I better register a different name I had no idea it's so similar to someone else's >.<

[TKT]

Yes location is very important for older LH.
Those near to MRT (within say 500m) should hold their value as demand will still be there, be it rental or own stay.
In particular, I think some of the older ECs present very good value when you see the eye-popping prices of some of the new LH launches these days... which is quite inevitable given the high land prices paid by developers and the rising costs of labor and materials...

[hyenergix]

Thanks for the tips... Any chance the gahmen will allow lease top ups in the future? Cant en bloc everything

I think I better register a different name I had no idea it's so similar to someone else's >.<

Most likely the government will allow the lease to fall to close 0, then extend by a few more years for the owners to look for new houses. Next the government can re-sell the land at much higher price due to developers bidding against one another.

[devilplate]

Most likely the government will allow the lease to fall to close 0, then extend by a few more years for the owners to look for new houses. Next the government can re-sell the land at much higher price due to developers bidding against one another.

in HK, i heard owners r sort of guaranteed for a lease top up....any HK ppty guru here to share some insights?

[hyenergix]

No point trying to guess the government's policy or guarantee. Government may change, and their policies too. Best is not to touch those 99LH condos with 80 years or less lease left. It feels like buying a 2nd hand car with less than 5 years COE left to me as the end of life issue will keep cropping up in your mind from time to time.

[ysyap]

No point trying to guess the government's policy or guarantee. Government may change, and their policies too. Best is not to touch those 99LH condos with 80 years or less lease left. It feels like buying a 2nd hand car with less than 5 years COE left to me as the end of life issue will keep cropping up in your mind from time to time.Such issues will only become inceasingly important to consider coz the earlier leasehold condos that were constructed in the 70s and 80s are reaching major cross junctions already.... and this figure will only rise with time... :D Avoid 99 LH or if cannot avoid, buy new and let go after couple of years when it can still earn handsome returns...

[Laguna]

in HK, i heard owners r sort of guaranteed for a lease top up....any HK ppty guru here to share some insights?

Yes, in HK, there are properties (mainly those released before 1997), with lease term like 75 Years and option for another 75 years

[devilplate]

Yes, in HK, there are properties (mainly those released before 1997), with lease term like 75 Years and option for another 75 years
Ic tks

So how about those after 97?

[Regulators]

just wanna check with you, is it true that leasehold properties in HK are now 50yr? What happens when leases run out in HK, do they get top ups easily which is why HK property prices maintain at a high level?


Yes, in HK, there are properties (mainly those released before 1997), with lease term like 75 Years and option for another 75 years