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Thread: Calculation on FL vs 99

  1. #1
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    Default Calculation on FL vs 99

    This message is to show calculation on returns for fh and 99 condo
    2 condos next to each other, TOP same date.

    Unit size -1000sf
    -FH costs $1200psf -$1.2M
    -99 costs $1000psf -$1M
    Rental $4k same- Interest 4% based on last 20yr ave
    Additional cost of FH is as follows
    - capital $200k-
    or interest of $8k per year
    In 10 years time,- interest is $80k

    In 20 years time,
    - interest is $160k

    In 20 years time, will the price difference between FH and 99 be more or less than $360k or $360psf or 36%?

    If more, go for FH.
    If less, go for 99

  2. #2
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    Quote Originally Posted by condo888
    This message is to show calculation on returns for fh and 99 condo
    2 condos next to each other, TOP same date.

    Unit size -1000sf
    -FH costs $1200psf -$1.2M
    -99 costs $1000psf -$1M
    Rental $4k same- Interest 4% based on last 20yr ave
    Additional cost of FH is as follows
    - capital $200k-
    or interest of $8k per year
    In 10 years time,- interest is $80k

    In 20 years time,
    - interest is $160k

    In 20 years time, will the price difference between FH and 99 be more or less than $360k or $360psf or 36%?

    If more, go for FH.
    If less, go for 99
    Based on the above assumption, so if after 50 yrs, should we go for "old" FH or "old" 99 yrs (which only left 49 yrs).

  3. #3
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    Nowaday no one really care for FH or LH, especially foreigner buyer from china, hong kong, etc. In HK, properties are 99 LH and china is ard 70 LH.

  4. #4
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    Quote Originally Posted by Armstrong
    Nowaday no one really care for FH or LH, especially foreigner buyer from china, hong kong, etc. In HK, properties are 99 LH and china is ard 70 LH.
    some places in china only 30 yr lease yet still all snapped up

  5. #5
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    and after some years, developer can do a lease top up for leasehold property. you add on inflation etc ... price to go up in the long run... fh should not have run away price as the alternative is lh + price top up....

  6. #6
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    By chance, I came across a ppty advertisement. If I remember correctly, an owner trying to sell her pty ppty at S$180,000 which according to her left only 1 yr more. Now I try to retrieve the advertisement but couldn't find already, ah ya! I think her ppty must be very very old and is passed down from her ancestors.

  7. #7
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    Quote Originally Posted by irisng
    By chance, I came across a ppty advertisement. If I remember correctly, an owner trying to sell her pty ppty at S$180,000 which according to her left only 1 yr more. Now I try to retrieve the advertisement but couldn't find already, ah ya! I think her ppty must be very very old and is passed down from her ancestors.
    that one I think is landed lh....condo can enbloc ... singapore small should have potential.... in 1980s, the price is just 40k for a hdb price and probably 120k for condo.....now condo chao chao 700k wor....lh somemore....

  8. #8
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    Quote Originally Posted by rattydrama
    that one I think is landed lh....condo can enbloc ... singapore small should have potential.... in 1980s, the price is just 40k for a hdb price and probably 120k for condo.....now condo chao chao 700k wor....lh somemore....
    I thought landed ppty are all FH, never know that they have LH too. So "suar ku"

  9. #9
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    From SLA. From the table, u can see the value of leasehold as a % of freehold when it comes to enbloc.http://www.sla.gov.sg/doc/ser/leasehold%20table.pdf

    So it your leasehold condo has 1 year term left, it means that it is only worth 3.8% of the value of an equivalent freehold condo, which means either u or your enbloc developer need to pay up the rest of the 96.2% of the value of the land. In short, it is worth almost nothing.If your leasehold condo has 34 years left, you only get 63% of an equivalent freehold, and so forth. The developer will have to pay the govt the 37% for the lease topup. In short, you lost 37% of the value. That is why most leasehold condos rush to enbloc early, because the lease decay increase in an increasing rate.

  10. #10
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    Quote Originally Posted by irisng
    By chance, I came across a ppty advertisement. If I remember correctly, an owner trying to sell her pty ppty at S$180,000 which according to her left only 1 yr more. Now I try to retrieve the advertisement but couldn't find already, ah ya! I think her ppty must be very very old and is passed down from her ancestors.
    One yr worth 180k?

    8k mabe lol

  11. #11
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    Quote Originally Posted by condo888
    This message is to show calculation on returns for fh and 99 condo
    2 condos next to each other, TOP same date.

    Unit size -1000sf
    -FH costs $1200psf -$1.2M
    -99 costs $1000psf -$1M
    Rental $4k same- Interest 4% based on last 20yr ave
    Additional cost of FH is as follows
    - capital $200k-
    or interest of $8k per year
    In 10 years time,- interest is $80k

    In 20 years time,
    - interest is $160k

    In 20 years time, will the price difference between FH and 99 be more or less than $360k or $360psf or 36%?

    If more, go for FH.
    If less, go for 99
    bro, in theory FH is best lah. But LH99 prime land is usually next to MRT. Buy for rental pple just get best convenience in location. how do one rate which one is better than if we look at 10 year returns? LH might still outperform in returns but FH will have better holding value if really long term. But in reality, 30 years later pple will say its ugly facade and dont wanna buy. How? end up still go for cheaper option

  12. #12
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    Quote Originally Posted by devilplate
    One yr worth 180k?

    8k mabe lol
    more like 10 years left....

  13. #13
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    Quote Originally Posted by Wild Falcon
    From SLA. From the table, u can see the value of leasehold as a % of freehold when it comes to enbloc.http://www.sla.gov.sg/doc/ser/leasehold%20table.pdf

    So it your leasehold condo has 1 year term left, it means that it is only worth 3.8% of the value of an equivalent freehold condo, which means either u or your enbloc developer need to pay up the rest of the 96.2% of the value of the land. In short, it is worth almost nothing.If your leasehold condo has 34 years left, you only get 63% of an equivalent freehold, and so forth. The developer will have to pay the govt the 37% for the lease topup. In short, you lost 37% of the value. That is why most leasehold condos rush to enbloc early, because the lease decay increase in an increasing rate.
    that is how the gov want to earn $ from ppty... in reality HDB flat and inflation will do the trick + preference from buyer buying cheaper or newer projects....so buy buy buy & at premium price after enbloc... the economy keeps on going...on and on...

  14. #14
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    Quote Originally Posted by irisng
    Based on the above assumption, so if after 50 yrs, should we go for "old" FH or "old" 99 yrs (which only left 49 yrs).
    Neither. Go for new, 99 yrs or FH. Your FH will look really ugly after 50 yrs and new ones come with modern state of the art design and advanced features.

  15. #15
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    Quote Originally Posted by rattydrama
    more like 10 years left....
    Those run down inter located at Lorong 3? Not worth the while. The total possible rental does not even hit twice the asking price.

  16. #16
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    Quote Originally Posted by irisng
    Based on the above assumption, so if after 50 yrs, should we go for "old" FH or "old" 99 yrs (which only left 49 yrs).
    Based on the assumption that $8K loss of opportunity cost of investing in FH:
    In 30 years time, the FH should be selling at $240K (interest paid to bank) + $200K(capital diff) more than 99y condo.

    In 30years time , using present value, if the FH is selling at same purchase price of $1.2M:
    -if you think the 99y condo can sell at more than $760K which is 40% gap, than the 99y condo is better bet.
    -If you think the price difference in 30years time is less than $440K, go for FH.

    As for 50year old, then simply $200K + $400K = $600K benchmark.

  17. #17
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    30 yrs from now, LH or FH all will get enbloc so no diff anyways

  18. #18
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    Quote Originally Posted by mantrix
    30 yrs from now, LH or FH all will get enbloc so no diff anyways
    for HDB cfm guaranteed safe....but not so sure about 99LH pte ppty especially the minority 99LH landed....most likely govt jus take back the land without any compensation....sleep on the streets...tats ur problem....

  19. #19
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    Quote Originally Posted by devilplate
    for HDB cfm guaranteed safe....but not so sure about 99LH pte ppty especially the minority 99LH landed....most likely govt jus take back the land without any compensation....sleep on the streets...tats ur problem....
    wats your view of lh private in more ulu location?

  20. #20
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    Quote Originally Posted by mantrix
    30 yrs from now, LH or FH all will get enbloc so no diff anyways
    yes that is true as we need to create jobs for our fellow singaporeans...

  21. #21
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    Quote Originally Posted by rattydrama
    wats your view of lh private in more ulu location?
    I believe surely got some ulu 99lh cannot get enbloc until expiry but i guess govt wud allow a lease top up of prolly 30 yrs or so bcoz they will still nid to sell 99lh gls condos and there is a substantial number of ppl owning 99lh condos....so seriously dun tink govt will take bck the land jus like tat....so many displaced residents gona stay whr especially those retirees which may not hf money to get another hse and not possible for them to get a bank loan

    Its actually those super prime 99lh which may not get lease top up even developer wana enbloc it bcoz govt may wana take bck the land for other purposes rather den residential


  22. #22
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    Enbloc proceeds should be higher for freehold right?? So if condo side by side, same TOP ceteris paribus, LH if selling at 1k psf, What is the max premium that you guys are willing to pay for the FH?? $1.1kpsf??

  23. #23
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    Quote Originally Posted by Montaigne
    Enbloc proceeds should be higher for freehold right?? So if condo side by side, same TOP ceteris paribus, LH if selling at 1k psf, What is the max premium that you guys are willing to pay for the FH?? $1.1kpsf??
    If everything being equal which is impossible in reality bcoz siteplan,layout,view,orientation,furnishing,facade,concept r different..... i will pay 20% more for fh over lh

  24. #24
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    Quote Originally Posted by devilplate
    I believe surely got some ulu 99lh cannot get enbloc until expiry but i guess govt wud allow a lease top up of prolly 30 yrs or so bcoz they will still nid to sell 99lh gls condos and there is a substantial number of ppl owning 99lh condos....so seriously dun tink govt will take bck the land jus like tat....so many displaced residents gona stay whr especially those retirees which may not hf money to get another hse and not possible for them to get a bank loan

    Its actually those super prime 99lh which may not get lease top up even developer wana enbloc it bcoz govt may wana take bck the land for other purposes rather den residential

    good points.. so maybe we should also look at projects ard 1000 units LH to ensure government really take care of them....its 3000 votes or voices...gov cannot just walk away.

  25. #25
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    Is it true that if the LH99 pte condo gets older and older, the resale value will drop. How about the FH, is it the same also?

  26. #26
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    Quote Originally Posted by irisng
    Is it true that if the LH99 pte condo gets older and older, the resale value will drop. How about the FH, is it the same also?
    its 20% difference usually...our lh condo haven reach 50 years old so not sure what will the gov do about it.... it not wrong few reaching 35 yrs old.

  27. #27
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    Quote Originally Posted by rattydrama
    its 20% difference usually...our lh condo haven reach 50 years old so not sure what will the gov do about it.... it not wrong few reaching 35 yrs old.
    20% difference between new 99LH and FH. But as the LH run out, the % difference will logically become larger. That's why I advocate FH for long term investments.

  28. #28
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    Quote Originally Posted by sh
    20% difference between new 99LH and FH. But as the LH run out, the % difference will logically become larger. That's why I advocate FH for long term investments.
    Fh gems r collectible items while some 99lh is gd for flipping

    We nid a balanced view n portfolio

  29. #29
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    Quote Originally Posted by devilplate
    Fh gems r collectible items while some 99lh is gd for flipping

    We nid a balanced view n portfolio
    Not a flipper by nature leh.... partly due to laziness, unwillingness to let transaction cost eat into gains and inability to time markets....

    Like to wait for gems and pick them up when they appear.... and hold.......

    just my preference....

  30. #30
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    Quote Originally Posted by rattydrama
    good points.. so maybe we should also look at projects ard 1000 units LH to ensure government really take care of them....its 3000 votes or voices...gov cannot just walk away.
    Buy Minton. Haha .. But good point. Maplewoods 990 units, Minister oso must go down to meet residents over a small temporary problem.

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