Prime freehold resale homes now available at new leasehold suburban prices
Prime freehold resale homes now available at new leasehold suburban prices. The Business Times (BT) conducted searches on Singapore’s largest property platform, PropertyGuru, and discovered over two dozen projects in desirable districts 9, 10, and 11 that are selling for less.
A cross-check was also performed to ensure that the asked prices corresponded to the actual pricing. BT’s search revealed homes in the Core Central Region (CCR) that could be less expensive than new leasehold properties in the Outside Central Region (OCR).
For S$1.6 million, a freehold 797 sq ft 2-bedroom Sophia Residence property in District 9 is available. A 1,066 sq ft 2-bedder flat at Verdure @ Holland Park in District 10 may get S$2.2 million, while a 1,421 sq ft 3-bedder Cube 8 property on a high level in District 11 could fetch S$2.9 million. If older condominiums are considered, there are even more affordable freehold properties in the main neighborhoods.
Why are purchasers bidding for 99-year leasehold homes in the OCR at greater or equivalent per square foot prices?
Analysts BT spoke with identified familiarity with suburban locales, proximity to children’s schools, and proximity to elderly parents as major considerations, particularly for Housing Development Board (HDB) upgraders who prefer to stay in certain regions. According to Catherine He, Colliers’ director and head of research, the progressive payment method for new launches also allows buyers to spread out their payments during the development period. Payments are made in advance for a resale apartment, and the mortgage begins immediately.
Furthermore, purchasing a new launch unit allows the buyer to benefit from long-term price increases. “If market circumstances remain constant, the project will most certainly fetch a higher price by the time it is completed,” He said. “Additionally, because homes take around three years to build, the Seller’s Stamp Duty (SSD) period would have been completed, and buyers can lock in profits without (paying) SSD if they want to sell.”
The progressive payment plan also assists young couples in overcoming the Total Debt Servicing Ratio (TDSR), which restricts a mortgagee’s total debt obligations to 55% of income. According to one industry watcher, the pair can pay an option fee to purchase a new launch unit and receive a financing only when building begins and progress payments begin.
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