Will The Last Round Of Cooling Measure Affect Landed Buyers?

[may2012]

As per the title. Anyone U-turned after the last CT?

Considering the quantum and age of most landed buyers I wld think so but I maybe wrong.

[leesg123]

As per the title. Anyone U-turned after the last CT?

Considering the quantum and age of most landed buyers I wld think so but I maybe wrong.

I would suspect yes, since need to folk out a larger sum of cash. it also affect the bigger size condos too.

[buttercarp]

I don't think so cos the minority live on landed.
And foreigners cannot buy landed.
Even if it affect, there will not be much direct effect as most buy to stay and not speculate.

[radha08]

landed is king of the mkt nothing affects the king......except maybe ...dunno la just tcss again...

[Rysk]

spore landed property will down >50% before 2015, stop buying landed property & landed property is on it's way down now......

Not I say one!

[buttercarp]

spore landed property will down >50% before 2015, stop buying landed property & landed property is on it's way down now......

Not I say one!

Hi, you are a frequent poster at MrTB's thread, right?

[Rysk]

Hi, you are a frequent poster at MrTB's thread, right?

I'm the B Hunter..
Hunt from sghouse when Luxus Hills $1.6m.. till condosg when Luxus Hills $2.4m.. till before MR B go MIA when Luxus Hills $2.9m....... till now still looking for this FAILURE

[jeaprp]

spore landed property will down >50% before 2015, stop buying landed property & landed property is on it's way down now......

Not I say one!

That one who say this won't appear again,
unless if mkt really drop 50% in 2015.

Huat ah

[focus]

I'm the B Hunter..
Hunt from sghouse when Luxus Hills $1.6m.. till condosg when Luxus Hills $2.4m.. till before MR B go MIA when Luxus Hills $2.9m....... till now still looking for this FAILURE

Now at $2.9m ..still can buy??

[proper-t]

Now at $2.9m ..still can buy??

Look at demand/supply lor...

No. of SG citizens growing at what rate ???

New supply of landed houses coming on-stream ????

What is the alternative if you compare $psf built-up of a neighbouring ground fl condo/apt unit vs $psf built up of Luxus ???

[DC33_2008]

Saw a group of agents going around my estate last night asking if we are interested to sell our landed property.

[proper-t]

Wah... door-to-door soliciting...better hold on to yr landed. Hard to replace nowadays.

Yah....got a few offers for mine but told them not for sale. I also see many notices posted around my estate saying that a foreigner with approval wanting to buy landed...didn't know gahment still giving out approvals...thought clamp down already.

[bargain hunter]

The article is saying no impact on GCB whatsoever and just slight impact on the smaller properties outside of GCB Areas:


RealStar's Mr Wong said that for smaller bungalows outside GCB Areas as well as semi-detached properties, "we've seen a couple of cases where potential buyers had to re-do their sums on cash outlay and monthly mortgage payment, which led them to eventually withdraw from the purchase".

[Secretariat]

If you are a Singaporean, with resources and looking for property, but too lazy to do the maths of landed investment, all I can say is

"It is a real pity."

Unless you hate staying in a landed. More accurately, you dislike the architecture of older landed houses, but this can be resolved with modern architecture.

Proper_t has already listed some very relevant questions. My calculation done in 2009 showed an investment in rebuilding a new house would yield a free FH land. This calculation is still valid today.

But don't take my words for it, do your own calculations.

[focus]

If you are a Singaporean, with resources and looking for property, but too lazy to do the maths of landed investment, all I can say is

"It is a real pity."

Unless you hate staying in a landed. More accurately, you dislike the architecture of older landed houses, but this can be resolved with modern architecture.

Proper_t has already listed some very relevant questions. My calculation done in 2009 showed an investment in rebuilding a new house would yield a free FH land. This calculation is still valid today.

But don't take my words for it, do your own calculations.

Can see an example of your calculation to yield a FH land?
Buy 5000sqft old land.. cut up into 2 landed and sell one?

Your view is different from BJ. Interesting

[Secretariat]

Can see an example of your calculation to yield a FH land?
Buy 5000sqft old land.. cut up into 2 landed and sell one?

Your view is different from BJ. Interesting

That is one way.

If the timing is good, then you don't even need to do this. My two rebuilt terraces, the two plots of 2000 sqf FH land, today they are 120% free. Having said this, I am here to share, not to talk about what happens to my investments. If others have different views (or better, information) to share, then of course I am happy to learn too.

I will provide some figures, then others can go to work out the calculations. You need to work out the calculations, to fully grasp the maths, to really understand the situation.

Multiplier

To grow money, you need a multiplier.

Starbucks will not be what it is today, if it stays operating in Pike Place Seattle. Same with A&F, etc etc, you name it.

Same with the people here in this forum. They have one property, or 2, or 3, and they think that property price is going up for the next 5 years, so "better get a second unit...", or the 3rd, or 4th.

They want to increase the multiplier. Price increased by $xxx psf over a year, but they are saying "aiyo, should have bought another unit last year..."

The multiplier effect grows money faster.

In landed, it is rather unique, because the multiplier is the Gross Plot Ratio. I simplify the calculation, if a landed of 2000 sqf with GPR of 1.5, you can tear down the old house, and build up to 3000 sqf.

In reality, it is more than 3000 sqf (because of how GFA is calculated, and then there are so-called bonus GFA), but as I said, let's simplify the illustration.

So, you bought a 2000 sqf FH with an old house of 1000 sqf sitting on it, when it is rebuilt into a 3000 sqf new house, your multiplier changed from 1000 sqf to 3000 sqf.

Then what is the cost of the multiplier? This one, it is a knowledge one can get only after experiencing a rebuilding. You won't know this when you buy a landed from a developer.

To be continued in the next post...

[buttercarp]

Hi secretariat, after you rebuilt the house, you have to market it and get an agent to sell it.
May I ask if you pay the agent the usual market rate like any seller in the market?
I assume you have very good holding power as well.
To rebuild a house requires good contacts eg architects, contractors etc.
I assume you are in the building industry and thus have good contacts and therefore you have been successful.

[Secretariat]

Part II.

When we speak of the cost of multiplier, it refers to the cost of rebuilding, the cost of construction.

This is where things are really clouded.

(In my experience, different contractors have different ways of pricing a rebuilding. It took me a while to study all these, and also the luck to come across a contractor who is very honest. So here it goes.)

A honest contractor will price $xxx psf based on GFA, the actual GFA figures submitted to BCA, URA, IRAS, certified by the architect you employed. Please google the definition of GFA, for its meaning.

Other not so honest contractors will price $yyy psf based on build-in, or build-up. The problem is that there is no legal definition of build-in, BCA doesnt use this term. So along the way, there is inevitably serious discussions among the owner and his contractor, on what is what.

Now, when a GLS is awarded, such as Keppel Land's winning bid recently, we can read the property commentators, saying "OK, price of land ppr of the bid is $700, add construction cost of $350 psf, add developer profit of $250 psf, we expect the selling price per unit at $1300 psf"

So when you buy a unit, in this example, you are paying for:

- The land premium, or future value of the land,
- The contractor gross profit of $100 psf (my estimate, the detail to be discussed later)
- The developer gross profit of $250 psf, if the units are indeed launched at $1300 psf, but you can check if this is true in this kind of market.

Total $350 psf, more if you add the land premium.

So, that is $1.05 mil that you can avoid paying if you choose to rebuild, instead of buying a 3000 sqf PC.

(To be continued in next post...)

[dtrax]

interesting insights will await your next post haha

[proper-t]

Good & informative posts @secretariat. Keep it up !

[lifeline]

useful sharings secretariat !
this multipier is useful, read about this in some posts before.
in your experiences, has this multiplier become smaller over time cos of higher asking prices of old fh land as sellers become more aware of their increased plot ratio?

[buttercarp]

"A honest contractor will price $xxx psf based on GFA"

Good point!

Looking forward to more, Secretariat!

[Secretariat]

Part III.

When you look at the quote of a contractor (an honest one), the items can be broadly separated into two category.

Wet Works (again, I am using a broad description)

This covers all the works related to foundation, structure, wall, horizontal floor slabs, electrical, telecom, sanitary & plumbing, vertical installations like windows, doors etc. Inside and outside of the house.

In 2009, the cost psf of this category was about $90-$120, depending on whether the Contractor's basis of pricing was build-in or other methods. Today, this figure ranges $150-$200, due to inflation plus a higher level of greed.

BCA has very stringent rules related to what kind of material is certified for use, so there is not really a big worry that a contractor application of material is vastly different from another. Generally. But there are still crooks out there, who try to save on the cement, for example.

BCA has no separate rules in this area, say, Sentosa bungalow must use a higher grade. If a higher grade is applied, it is more due to specific condition where the house is intended. Such as type of soil.

However, there is a difference in the workmanship of these wet works, such as wall plastering. So, a higher cost psf should indicate a higher quality of results.

To recap, the cost of wet works is between $150-$200 psf today.

Finishing

Finishing refers to the quality of material used for flooring, the marble, the timber-flooring, the sanitary fitting, the kitchen fitting etc.

You will find these priced in a construction contract. Marble at $xx psf, teak timber floor at $yy psf, brand of sanitary fittings etc.

This is the part that distinguish one landed from another (other than architecture, which will be described later). The better quality material used, of course, creates more value to the house.

But it is also this part that the contractor plays with, in generating a quote. The contractor will ask, "what is your budget?" and price this category according.

In my case, I signed the contract with all these budgeted items, and VO (variation order) everything when came to installation. These items required careful study with the ID, and quite impossible to determine at such an early stage at contract signing.

In conclusion of this part, the cost of rebuilding is about $250 psf.

(To be continued...next part we talk about creating equity from a rebuilding. Notice the word "create".)

[proper-t]

Not to encroach on his great write-up but from my experience, re-development of landed is really fascinating and if you read the rules properly, it can throw up many little nuggets which can be used to increase the value and not just the GFA increase via the multiplier. :

e.g. 1 which many people probably know about...
Semi-Ds can be converted into bungalows if the right conditions exists...

e.g. 2
You can make your house 2.5m higher if your house is on a sloping ground and you build a basement.

[Secretariat]

Hi secretariat, after you rebuilt the house, you have to market it and get an agent to sell it.
May I ask if you pay the agent the usual market rate like any seller in the market?
I assume you have very good holding power as well.
To rebuild a house requires good contacts eg architects, contractors etc.
I assume you are in the building industry and thus have good contacts and therefore you have been successful.

I am not in building industry.

I hope that you can excuse me, but I don't go into the financial detail.

The other house is still there, within walking distance of the one I am staying, I tend the garden, it is used for visitors. That's about it.

[Secretariat]

Not to encroach on his great write-up but from my experience, re-development of landed is really fascinating and if you read the rules properly, it can throw up many little nuggets which can be used to increase the value and not just the GFA increase via the multiplier. :

e.g. 1 which many people probably know about...
Semi-Ds can be converted into bungalows if the right conditions exists...

e.g. 2
You can make your house 2.5m higher if your house is on a sloping ground and you build a basement.

Yes.

All information are welcomed.

[proper-t]

Thanks for sharing all your past experiences. Yep, indeed, after all these years dabbling in real estate mkt, I find landed to be the most flexible in value generation amongst all the other property types.

[Secretariat]

useful sharings secretariat !
this multipier is useful, read about this in some posts before.
in your experiences, has this multiplier become smaller over time cos of higher asking prices of old fh land as sellers become more aware of their increased plot ratio?

When you are scouting for old FH landed, I am sure that you will find what I discovered:

- Old couple, stay there for decades, no energy no money to rebuild, have no idea of the true value of the house. They are at the mercy of property agents. I "fired" agents who took advantage of this kind of couple,

- Someone who inherited the house, no money to rebuild, most probably a serial gambler in urgent need of money.

Otherwise, you can beg all you want, the owner just won't sell.

[focus]

Part II.

When we speak of the cost of multiplier, it refers to the cost of rebuilding, the cost of construction.

This is where things are really clouded.

(In m
So, that is $1.05 mil that you can avoid paying if you choose to rebuild, instead of buying a 3000 sqf PC.

(To be continued in next post...)

I think you can start a new thread and cut your sharing there. it's very good. I have done this exploration before but no action unlike you So the part on dealing with the contractors and such are a cloud to me.

[stl67]

If you are a Singaporean, with resources and looking for property, but too lazy to do the maths of landed investment, all I can say is

"It is a real pity."

Unless you hate staying in a landed. More accurately, you dislike the architecture of older landed houses, but this can be resolved with modern architecture.

Proper_t has already listed some very relevant questions. My calculation done in 2009 showed an investment in rebuilding a new house would yield a free FH land. This calculation is still valid today.

But don't take my words for it, do your own calculations.

hey we share the same calculation. i was sharing with my colleagues and family about this when i was buiding my house in 2007. Nobody pays attention to me...now, as people always say, the rest is history...

this year, my family members start to believe me and together we bought 2 landed... but hopefully with the construction costs and etc... the calculation still valid...

at that time, my salary is not enough for me to venture out...