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Thread: selling price vs age of condo

  1. #1
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    Default selling price vs age of condo

    At what age of condo will the selling price start to fall at higher rate?

    if you own a condo that is 15years old. does it make sense to sell it away and buy the condo next block which is 5 year old.

    In 10 years time, will the % return be more for the 5year old or 15 year old condo?

    Is the gap between the 5year-15year condos be greater or smaller than 15year-25year condo in %?

  2. #2
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    can I add on one more question? Given the above scenario, does tenure matter?

  3. #3
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    Generally condos above 20 years old will start to drop in prices but then again different places which boast different amenities and conveniences would still appeal so prices though starting to fall would fall very gradually as opposed to some other places which are in no man's land.

    Many factors are in play here though. Another important factor is leasehold vs freehold. Very difficult to give a definite age when condos prices will start to fall at a higher rate.

    Also, comparisons of 15 years old condos vs 25 years old would probably not be that stark a difference as compared to a 5 years old condo vs 15 years old property. These are just my opinion and may well be inaccurate during different times (eg. good or down times).

  4. #4
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    Quote Originally Posted by Montaigne
    can I add on one more question? Given the above scenario, does tenure matter?
    Just ask yourself, given a choice of two condos side by side. One is a 15 year old 99 leasehold while the other is a 15 year old freehold. Which would you prefer given all other factors remain constant? The development with a higher demand would naturally command a higher asking price by the natural principles of economics.

  5. #5
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    Imagine 2 freehold property in the same CCR location. One is 15 years old and another is a new launch by some developer. The new launch is priced 80% more than the 15 years old property. Do you think in 10 years time, when one is 25 years old and the other is 10 years old, the margin is still going to be 80% difference?
    Do not forget that for many condo, the management will ask for a one time fee every few years to maintain, repair and repaint the whole condo.

    Leasehold is a totally difference story.

  6. #6
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    Quote Originally Posted by windcar
    Imagine 2 freehold property in the same CCR location. One is 15 years old and another is a new launch by some developer. The new launch is priced 80% more than the 15 years old property. Do you think in 10 years time, when one is 25 years old and the other is 10 years old, the margin is still going to be 80% difference?
    Do not forget that for many condo, the management will ask for a one time fee every few years to maintain, repair and repaint the whole condo.

    Leasehold is a totally difference story.
    Maybe I ask another question. Chuan Park, 99 yr, 26 years old. Bullion Park, FH, 18 years old. Why both selling at about the same psf of $800 to $900 psf?

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    Quote Originally Posted by fclim
    Maybe I ask another question. Chuan Park, 99 yr, 26 years old. Bullion Park, FH, 18 years old. Why both selling at about the same psf of $800 to $900 psf?
    These are in 2 totally different location and the hypothesis will have to be different. You have to compare 1 FH and 1 leasehold in the same location (close proximity) and check the value drop of the leasehold overtime.
    I propose you look at The Trevose (99 years) and the FH apartment/condo around that area. Or mayfair garden with the nearby Casa Esperanza. Or you can notice how some older FH condo has risen more in price over the years as compared to tanglin regency. I remember TR was very expensive when it was initally released.

  8. #8
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    Quote Originally Posted by windcar
    These are in 2 totally different location and the hypothesis will have to be different. You have to compare 1 FH and 1 leasehold in the same location (close proximity) and check the value drop of the leasehold overtime.
    I propose you look at The Trevose (99 years) and the FH apartment/condo around that area. Or mayfair garden with the nearby Casa Esperanza. Or you can notice how some older FH condo has risen more in price over the years as compared to tanglin regency. I remember TR was very expensive when it was initally released.
    Precisely, tenure may not be that important nowadays.
    Ok, then can compare Orchid Park with Bullion Park? Psf difference only $100psf. Same age, around same locale. Psf difference when new, about $200psf? Why Orchid Park difference never drop by $500psf compared to Bullion?

  9. #9
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    Quote Originally Posted by fclim
    Precisely, tenure may not be that important nowadays.
    Ok, then can compare Orchid Park with Bullion Park? Psf difference only $100psf. Same age, around same locale. Psf difference when new, about $200psf? Why Orchid Park difference never drop by $500psf compared to Bullion?
    Those 2 condos are built around the same time (1 year difference) and it is evident that generally the unit from FH Bullion is more expensive than the leasehold Orchid if you look at URA. After many years of market correction, it is decided by market force that the difference is now 200psf?
    it does not matter that initally if the bullion is alot more expensive, as the initial price is set by the developer, but the market will tend to correct itself over time.

  10. #10
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    Location wise orchid park is very convenient. Bullion can't compare for this. So many factors at play.

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