Upgrading to landed?

[phantom_opera]

Landed have to appreciate more to compensate for lack of yield and higher cost, sure return higher than sti ETF? I doubt

[DC33_2008]

That is why it is not for everyone. This is the exclusivity of owning a landed especiailly a fully paid -up one that has gone up by more than 100% in capital gain in the last 10 years.

I don't discount that landed gives greater privacy as compared to HDB and condos. If you read my post carefully, the neighbours part was written from the context of potential pest related issues, not noise. It is something to look out for especially if the property is an inter-terrace and shares the same retaining wall as the next door unit. As with most A&A projects, the architect would advise to raise the retaining wall to reduce the likelihood of Pest contamination, but it is not a foolproof method.

I agree that dengue takes place anywhere, and everywhere. But if one looks at the NEA data objectively, most of the dengue clusters take place in landed estates. My last landed faced the same issue as well, so much so that the NEA officers used to come round every household to ask everyone to clear out the dead leaves on the rooftops and ensure that the exposed pipes that run along the roof do not collect still water. It was an instruction which no one could fulfill.

There are trade offs for everything in life, and everyone is entitled to their opinions in an open forum. I agree that landed provides one with the opportunity to build and design a house. But that opportunity does not come cheap in Singapore. Question is when one embarks on such a $4m opportunity, whether similar trade offs have been considered. If indeed so, then do proceed, but at least it is with eyes open.

[amk]

To TS, u r very modest. If i were in ur profile, i will just go for it, since this is something you want, and you can afford. Landed is a quality asset that can last ages so no worry IMO for the wealth preservation part. For yield u play something else lah.
As some one earlier said, the days u can get a 2mil bungalow is over. So now buying landed is not much diff from buying condo, one needs some luck to spot a gd deal.

[howgozit]

Totally agree...

people forget the primary purpose of buying a property... it is to provide the buyer with a HOME. TS is well within the income range to aspire living in a $4m landed....all its associated costs considered.

if one is looking at it from an investment point of view, property is only one of the many ways to accumulate wealth...

TS should go for it.... you don't want to look back in life thinking whether you should have done this or that... especially since you can well afford it...

To TS, u r very modest. If i were in ur profile, i will just go for it, since this is something you want, and you can afford. Landed is a quality asset that can last ages so no worry IMO for the wealth preservation part. For yield u play something else lah.
As some one earlier said, the days u can get a 2mil bungalow is over. So now buying landed is not much diff from buying condo, one needs some luck to spot a gd deal.

[seeksadvice]

A decade ago, when we bought our condo (current place) for $550k, we caught the trough of the market. Our combined income then was $150k. That meant just about 3-4 yrs of income. We also knew that our income would rise as we advance in our career.

Undertaking a 4m ppty is more like 7-8 yrs of income. But different from the last purchase, our runway till retirement is a shorter journey & we have probably reached the pinnacle of our careers. Hence concerns about capital appreciation ......

Thank u all again for the insightful analyses, words of encouragement & humor.

[new2mondrian]

price appreciation is due to a simple demand and supply law and also because of the limited factor and moving forward, that will not change unless we reclaim more land or tear down HDB/Condo and convert those lands for landed or cut away inflow of new citizens, etc...so, in terms of price appreciation, it is very obvious.

and if you say condo still make more sense this one i really scratching my head as this is very subjective and depend on how you look at it....comparing a EC (or Condo) at 700psf today and a landed of 800psf, I would think it is crazy to go for EC...both are 99LH and if you look around, it is still there. Im not comparing to the extreme as in MM as it is more of a quantum base in that case.

Agree you are right! apologies my sentence wasn't clear. When i wrote "condos make more sense", i was referring to seekadvice's first post, where he mentioned that someone suggested getting a $2M condo and retain his current condo to get some rental income. If he really has to buy, this option makes more sense to me.

This topic is interesting to me cos my hubby and I went through the very same thought process a couple of years ago. We were in our early 30s then, and wondering should we, could we.... Anyway, pricing levels then were very different.

My take to this question would be somewhat different. I always believed in BOP (bottom of pyramid) strategy. When it comes to price appreciation, the biggest upside comes from the sub $2.5M for landed, and sub $1.2M for freehold condos (i am not including MMs here. Condos to me only make sense when there are at least 3 decent sized bedrooms). Looking at average household incomes and real wage increases, sanity must prevail especially over a prolonged period of slow growth in a macroeconomic scenario. Seekadvice may have high household income, but the larger question is how sustainable is this income level, and he based his affordability assumptions on taking a $2M loan, coupled with $1M savings and selling his current condo for $1M. If he takes a bank loan at 60% LTV, he will still have to cough up $1.6M, with the remaining $400k going probably to renovations and some contingency funds.

In this respect, why not get a smaller (and cheaper) landed at $2.2-2.5m first? Landed living is not everyone's cup of tea. If it is, he remains vested in the game to trade up; if it isn't, well it is always easier to dispose of a $2.5-2.7m property than a $4.5m one (assuming break even at 10% margin).

Just a friendly advice as a parting shot. Banks are usually a lot more careful when it comes to landed. Unless one can fully fund the property without a bank loan, it is always better to check and double check that the bank loan can go through before putting down the option monies. Most banks i know will do inspection of the landed property before final approval of the loan. And things which they look out for include illegal alterations (eg insufficient setback). So if the $2m depends on this, always better to be safe than sorry.

[789]

investing in landed property will only make sense when interest rates are low. Once it rises to say 3% of so, price of landed will most likely be the first to crash because of the huge loan amount plus negative rental yield.

[phantom_opera]

investing in landed property will only make sense when interest rates are low. Once it rises to say 3% of so, price of landed will most likely be the first to crash because of the huge loan amount plus negative rental yield.

Well said, pap will be most happy to see u buy 4m landed, u can't go anywhere else but remain in sg, but the poster probably is MIW himself lol, wonder why sm goh had this asset enhancement prog? Hehehe

[seeksadvice]

Has there been any experience of landed crashing due to high interest rates? i have not been in the market long enough to understand this.

But I would've thought that given the relatively illiquid nature of landed properties, the larger monthly commitment involved, landed owners will be one of the most prudent in doing their sums. For example, in my calculations, I've factored in scenarios where interest rates go up to 5%.....and hence, even considering 5-yr fixed rate packages....sadly these come with punitive prepayment fees.

[lajia]

investing in landed property will only make sense when interest rates are low. Once it rises to say 3% of so, price of landed will most likely be the first to crash because of the huge loan amount plus negative rental yield.

Ppl buy to stay la... if landed crash hard, condo might be worst... Because there are more trading in condo then landed

[DC33_2008]

Only if such buyers have over leverage themselves. No problem with the wealthy ones. What do you Medan by crash? How many percent down? I will be keen to buy another.

investing in landed property will only make sense when interest rates are low. Once it rises to say 3% of so, price of landed will most likely be the first to crash because of the huge loan amount plus negative rental yield.

[phantom_opera]

For god sake, a landed in auckland is only 800k to a million, what is the chance if landed 4m go to 8m in 10y time other than drastic change if plot ratio?

[DC33_2008]

Possible with inflation and devaluation of currency. Money can buy less things compared to a decade ago. Look at landed in hong kong similar to Singapore in land area and population, culture, etc. We may not be so expensive now but if we move towards that direction.

For god sake, a landed in auckland is only 800k to a million, what is the chance if landed 4m go to 8m in 10y time other than drastic change if plot ratio?

[phantom_opera]

Possible with inflation and devaluation of currency. Money can buy less things compared to a decade ago. Look at landed in hong kong similar to Singapore in land area and population, culture, etc. We may not be so expensive now but if we move towards that direction.

Dun fall into trap of the thread starter, he is STUCK trying to sell landed, a family with 500k income will come to forum? Please lah

[DC33_2008]

Why not? Not surprise these days with quite a lot of people with such household income to invest in properties and learn from this forum,

Dun fall into trap of the thread starter, he is STUCK trying to sell landed, a family with 500k income will come to forum? Please lah

[phantom_opera]

U can choose to believe, nobody making 500k will choose to boast their income in Internet to invite investigation by iras, I am in that sector, press a button u can track down the end user device summiting the post, and this forum belong to either sph or mediacorp

[lajia]

Dun fall into trap of the thread starter, he is STUCK trying to sell landed, a family with 500k income will come to forum? Please lah

we should be paid for, hahaha....probably some focus group survey he is doing... look at his questions, well structured...

[DC33_2008]

You could be right too. People with high income or many properties do not need to tell everyone. Do you still remember this guy who said he has a household income of $800k a year. Came and gone quickly. .

U can choose to believe, nobody making 500k will choose to boast their income in Internet to invite investigation by iras, I am in that sector, press a button u can track down the end user device summiting the post, and this forum belong to either sph or mediacorp

[amk]

U can choose to believe, nobody making 500k will choose to boast their income in Internet

.. Hmm that's quite true.... Your observation is sharp.... although honestly I hope this is genuine... Haiz why ppl have to do this....

From the a few PMs I had here, I'm sure there are members with that earning capacity or more, but it is true none will say something like "my income xxxk a year"

[new2mondrian]

Haha agree on the disclosure of income part. But anyways, take a look at the positive side. I always am inclined to believe that the situation described is genuine unless further contradictions arise that prove it otherwise. But hey, even if it is not, hopefully someone else in the same situation can benefit from it. I learnt a lot from this forum, so I thought it is good to also share constructively if I could also.

Phantom, Auckland landed pricing cannot compare to Sweden's! £50k pounds can get a Freehold landed! Cheaper than a car in Sgp. Plus Sweden is a beautiful country (with no natural disasters) for kids to roam ard. Was seriously thinking of getting a vacation home over there and furnishing it IKEA style last year. Lol...

[seeksadvice]

Dun fall into trap of the thread starter, he is STUCK trying to sell landed, a family with 500k income will come to forum? Please lah

It is interesting how some of us are very cynical yet very willing to share their views, even if it is just to alert others to the possibility of this being a fake thread.

Mine is a genuine case. We are a very conservative couple who have waited patiently by the sideline for the last 3 years while property prices refuse to cool, and we see our savings eroded by inflation.

While our income may be above average (judging by responses in this forum), I don't understand the cynicism.

To the doubting thomases,

1. Trust me....in today's property market & interest rate environment, nobody is considered "stuck" with a landed property. This comment i found most funny. Sorry, phantom, didn't mean to be rude

2. My questions & thoughts are well-structured because I have been thinking very long & hard over 3 years, not 3 months. Has it occured to you that, why i am earning above-average, is because i can ask logical questions?

3. In any case, only a woefully small no. of pple have responded to my first question "do you aspire towards landed property?" This question was meant to help me gauge the eventual demand for landed homes in 10 years time. Maybe that meant my "Focus Group study" has failed miserably??

Anyhow, short of posting my IRA8, I don't think anything i say will convince detractors.

It's the end of hari-raya hols. I am promised a bank valuation of both my target place & my current place tomorrow. I'd write again if there's any major surprises.

[wind30]

Actually the timing of the buy is very impt.

Your condo is 1million and you are upgrading to a 4 million landed so you are putting in 3 million more.

If you have upgraded 2 years earlier, you probably could have saved at least 1million dollars...

[DC33_2008]

You should have purchased one in 2009 especially if your job is recession proof. There is quite a bit of correction then.

It is interesting how some of us are very cynical yet very willing to share their views, even if it is just to alert others to the possibility of this being a fake thread.

Mine is a genuine case. We are a very conservative couple who have waited patiently by the sideline for the last 3 years while property prices refuse to cool, and we see our savings eroded by inflation.

While our income may be above average (judging by responses in this forum), I don't understand the cynicism.

To the doubting thomases,

1. Trust me....in today's property market & interest rate environment, nobody is considered "stuck" with a landed property. This comment i found most funny. Sorry, phantom, didn't mean to be rude

2. My questions & thoughts are well-structured because I have been thinking very long & hard over 3 years, not 3 months. Has it occured to you that, why i am earning above-average, is because i can ask logical questions?

3. In any case, only a woefully small no. of pple have responded to my first question "do you aspire towards landed property?" This question was meant to help me gauge the eventual demand for landed homes in 10 years time. Maybe that meant my "Focus Group study" has failed miserably??

Anyhow, short of posting my IRA8, I don't think anything i say will convince detractors.

It's the end of hari-raya hols. I am promised a bank valuation of both my target place & my current place tomorrow. I'd write again if there's any major surprises.

[howgozit]

Huh?... 500k household income cannot come to this forum meh?

Dun fall into trap of the thread starter, he is STUCK trying to sell landed, a family with 500k income will come to forum? Please lah

[789]

Ppl buy to stay la... if landed crash hard, condo might be worst... Because there are more trading in condo then landed

buying for own stay is actually worst because you are consuming whatever you have invested, and you will get the full blown effect of interest rate when it rises.

I am also guessing that most people who own landed property are holding on to just 1 property because that is the only way they can qualify for 80% LTV.

For condo investors, if you already have more than 1 property, your LTV will only be 60%, so when interest rises, the impact will be lesser.

[wind30]

1. Trust me....in today's property market & interest rate environment, nobody is considered "stuck" with a landed property. This comment i found most funny. Sorry, phantom, didn't mean to be rude

yup how very true. I think landed prices is at a all time high. The gains over the past few years is probably higher than condo prices.

[DC33_2008]

You czn also hve fuly paid off landed owning PCs.

buying for own stay is actually worst because you are consuming whatever you have invested, and you will get the full blown effect of interest rate when it rises.

I am also guessing that most people who own landed property are holding on to just 1 property because that is the only way they can qualify for 80% LTV.

For condo investors, if you already have more than 1 property, your LTV will only be 60%, so when interest rises, the impact will be lesser.

[heehee]

What about going forward say 10 years from now? Say a person has $4m budget for a property for self stay, so buy:
- Landed or condo
- smaller CCR or larger OCR
- buy new or resale

yup how very true. I think landed prices is at a all time high. The gains over the past few years is probably higher than condo prices.

[amk]

What about going forward say 10 years from now? Say a person has $4m budget for a property for self stay, so buy:
- Landed or condo
- smaller CCR or larger OCR
- buy new or resale

I will buy a decent condo in CCR, esp. resale ones, with more than 2000 real sqft. 4m today you can't really get any nice landed with enough spaces.

There are a lot of large resale units in this 3-4m range inn CCR. Huge living room, family room, generous bedrooms all with ensuite. For own stay, I think it is a better buy, than a 4m landed today which is not here not there.

[amk]

yup how very true. I think landed prices is at a all time high. The gains over the past few years is probably higher than condo prices.

... therefore isn't it more so that landed are more difficult to move in this market ? phantom may be a little exaggerating by using the word "stuck", but the fact is, large quantum sales are not moving.