Fraud Blocker
Your search results

Unveiling the Truth: Why Freehold is Not Always the Optimal Choice for Property Investment

Posted by Jayson Ang on January 4, 2023
| 0

TLDR

When it comes to investing in real estate in Singapore, traditional beliefs may not always hold true in today’s rapidly transforming market. Property agents now rely on digital platforms like Facebook and PropertyGuru rather than classified ads. While owning a freehold property may be beneficial for long-term investments, newer 99-year leasehold properties could be smarter choices for mid-term gains. Being near an MRT station isn’t always the best option, as other factors like entry cost and specific product choice play crucial roles. Additionally, the belief that the next-door resale condo is a bargain may not always hold true, as seen in the comparison between J-Gateway and Caspian properties. The property market is ever-changing, challenging long-held rules and expectations. To navigate this dynamic market, staying flexible and open-minded is key. Gain more clarity on property investments by scheduling a financial assessment session.

When it comes to investing in real estate in Singapore, there are several so-called “rules” that seem to dictate certain choices. These “rules” have been around for ages, based on certain “beliefs” that have been passed down or shared through word of mouth.

Do These “Guidelines” Still Hold Weight in the Present?

In this era of rapid transformation, what worked before is no longer successful. Ten years ago, property agents could rely on classifieds ads to generate buying inquiries, but now they have to take their listings to the digital realm of platforms like Facebook and PropertyGuru in order to get the most exposure. The Classifieds section has become a shadow of its former self. Ultimately, it has become outdated and superfluous.

Are You On The Cutting Edge…Or Stuck In The Past?

As I challenge some long-held beliefs cherished by some, how will you react? It is natural to be averse to change, yet here I am offering readers of this blog 3 property investment beliefs that may be past their prime.

Investment Belief #1: Owning a Freehold Property in Singapore is a Far Superior Investment than Leasehold

Have you ever asked yourself if Singapore freehold properties are better than leasehold? Well, I hear you cry as you ponder this debate – but, trust me, I walk the ground daily, witness transactions and have exclusive data unavailable to the general public.

Take Bartley Ridge as an example: a 99-year leasehold condo that saw multiple transactions in 2018. So is the belief in freehold investments outdated? Absolutely not – it is still highly relevant!

Bartley Ridge (Leasehold) : 2018 Transactions

Bartley Ridge psf Pricing Trendline

Let us take a look at Oasis Gardens – a freehold development nearby– and make a comparison.

Oasis Gardens (Freehold) – PSF Trendline

The PSF pricing for this freehold development has decreased, leading to fewer transactions taking place as owners purchased at higher prices and are unwilling to sell at lower prices. The trendline is evident, with a slight decrease and a lack of significant movement. If you’re seeking a property investment for the long-term, a freehold property may be the most beneficial option; however, for a mid-term period (3-8 years), a new 99-year leasehold property may be the smarter selection.

Investment Belief #2: Buying Near MRT Is Better

It’s often said that choosing a spot close to an MRT station is a wise move, and I have to agree – in many cases, being in the vicinity of public transport has its advantages. Nevertheless, I’ve come across instances where this is not necessarily the case.

The Quartz (near MRT) vs Riversails

Below are the Riversails’s most recent transactions:

Riversail 2018 Transactions (Further away from MRT)

Riversales psf Trendline

Let’s take a look at the Quartz PSF trendline.

Take note the Quartz is located nearby Buangkok MRT station.

The Quartz PSF Trendline (Near MRT station)

Living close to a MRT station may not always be the best and safest option when it comes to investing. Location alone is not a surefire way to guarantee success – there are other factors that must be taken into account, such as the entry cost of the investment and which specific product to buy (when there are a variety of options in the same area).

Investment Belief #3: The Next Door Resale Condo is a Bargain!

I recently had the pleasure of connecting with a couple who were curious about the current state of the property resale market, so let’s take a peek at the resale property price index!

2013 was the pinnacle of sky-high prices, with J Gateway launched that June, boasting an average PSF of a staggering $1650. I couldn’t believe it – it was just too expensive. The timing was unfortunate too, coming right before the 2013 cooling measures. J Gateway was released and sold at the most exorbitant rate. Fast forward to the present day, let’s take a peek at J-Gateway’s most recent transactions.

J-Gateway Most Recent 2018 Transactions

It is astonishing to witness the phenomenal sales rate of J-Gateway units, with prices soaring up to as much as $19XX per square foot! Even more impressive, some buyers have reported incredible returns of up to $200K in profits!

J Gateway PSF Trendline

If we compare the launch of J Gateway with that of Caspian’s, we can see the clear appreciation in J Gateway’s prices over the last five years. Caspian, being the resale option, became a popular choice for people looking to buy a property in the west. Let’s take a closer look at Caspian’s PSF trendline.

Caspian PSF Trendline

If you had purchased Caspian back in 2013, when it was available for $11XX PSF, compared to J-Gateway’s launch price of $14XX to $16XX PSF, you could have already been collecting a generous rental income of $1500 a month, and making a profit of $54K after three years! This is much lesser than the potential 6-figure profits that could have been gained from J-Gateway, which is still under construction.

Despite selling at its highest peak prices in 2013, J-Gateway property investments would still have yielded higher profits than any other form of investment in the end. There is a vast difference in the gains and appreciation between the two.

Conclusion

Gaining a better understanding of Singapore’s property market can be a tricky endeavor, and none of us have a perfect grasp of it. Nonetheless, as we gain more knowledge and insights, it is important to be able to be flexible and open-minded, having the humility to accept when we’re wrong.

You might be thinking that I’m being biased in favor of the newer properties, but what I have said is not without reason. Everyday I’m witness to the improved performance of newer properties versus their older counterparts – the evidence is all around.

No matter my bias, the evidence that slowly erodes all the “rules” we’ve made is undeniable. While these rules are not entirely wrong and should be used as a general guideline, if you’re hoping to make a property investment and exit at its peak, these so-called rules may not be quite so applicable.

Despite the introduction of the TDSR cooling measures on 29 June 2013 – the day prior to the launch of J-Gateway – Singaporeans have defied the unwritten rule of “never enter the property market at the peak price” and pushed J-Gateway to record highs in 2018, showing just how much their buying habits have changed over the years.

Are you feeling uncertain about the preference of newer properties in the market? It’s become apparent that there is much less interest in older properties, meaning they become a second choice rather than a sought-after option. This goes to show how the property market is ever-changing and rarely follows the rules or expectations.

Worried that your own biases are impacting your view of the property market?

Allow me to assist you – schedule a thorough financial assessment session with me to gain more clarity on the property market.

You May Also Like …


5 Impacts Of The Singapore Government’s Cooling Measures On Property Investing
Mandarin Top 5

5 Impacts Of The Singapore Government’s Cooling Measures On Property Investing

The Singapore government has implemented several cooling measures over the years to regulate the property market and prevent it from...
Read More
6 Indicators and Measures to Determine if Your Home Has Unrecognized Profits
All Blog Posts Buying Tips Opinion Selling Tips

6 Indicators and Measures to Determine if Your Home Has Unrecognized Profits

TLDR The booming real estate market presents opportunities for homeowners to profit from selling their properties. Two key signs that...
Read More
Beware of These 7 Deceptive Tricks In Showflat Condo Sales
All Blog Posts Buying Tips

Beware of These 7 Deceptive Tricks In Showflat Condo Sales

TLDR When navigating the complexities of the real estate market, it's crucial to be wary of hidden marketing tricks when...
Read More
Property Market: Buyer’s Paradise or Seller’s Dreamland?
All Buying Tips Opinion Selling Tips

Property Market: Buyer’s Paradise or Seller’s Dreamland?

TLDR The property market in Singapore post-Covid has seen a surge in HDB and private property prices, with a noticeable...
Read More
5 Top Primary Schools in Singapore Popular with Expat Chinese Community
Mandarin Top 5

5 Top Primary Schools in Singapore Popular with Expat Chinese Community

5 Top Primary Schools in Singapore Popular with Expat Chinese Community When it comes to education, Singapore is a top...
Read More
6 Compelling Reasons Why 3-Bedroom Condos Might Shrink Further
All Blog Posts Buying Tips Opinion

6 Compelling Reasons Why 3-Bedroom Condos Might Shrink Further

TLDR Three-bedroom units in Singapore have significantly downsized from 1,700-1,800 sq. ft. in the 1980s to around 1,000 sq. ft....
Read More
5 Reasons To Invest In UK Property In 2024 Instead Of Saving
All Buying Tips

5 Reasons To Invest In UK Property In 2024 Instead Of Saving

TLDR Investing in UK property in 2024 offers significant advantages over saving due to the potential for long-term value growth,...
Read More
6 Must-Know Factors to Consider When Purchasing a Resale HDB in 2023
All Blog Posts Buying Tips

6 Must-Know Factors to Consider When Purchasing a Resale HDB in 2023

TLDR When buying a resale flat in Singapore, make sure to walk around the neighborhood to assess actual distances, check...
Read More
The Best Time to Invest in Singapore’s Property Market: Timing is Everything
Mandarin Top 5

The Best Time to Invest in Singapore’s Property Market: Timing is Everything

Investing in the property market is a significant decision that requires careful consideration and analysis. One crucial factor that determines...
Read More
Should You Be Upgrading To A Condo In 2023?
All Blog Posts Opinion

Should You Be Upgrading To A Condo In 2023?

TLDR The 2022/23 property market is experiencing high prices, making it challenging for individuals to decide whether to upgrade their...
Read More
6 Misleading Claims Property Agents Often Make That Savvy Buyers Are Aware Of
All Buying Tips Opinion

6 Misleading Claims Property Agents Often Make That Savvy Buyers Are Aware Of

TLDR Real estate agents can sometimes use deceptive tactics to push sales. Be cautious of claims about other interested buyers,...
Read More
Unveiling the Truth: Why Freehold is Not Always the Optimal Choice for Property Investment
All Blog Posts Opinion

Unveiling the Truth: Why Freehold is Not Always the Optimal Choice for Property Investment

TLDR When it comes to investing in real estate in Singapore, traditional beliefs may not always hold true in today's...
Read More
5 Reasons : Can Your Real Estate Investment Hedge Against Inflation?
Mandarin Top 5

5 Reasons : Can Your Real Estate Investment Hedge Against Inflation?

Inflation is an economic phenomenon that can have a significant impact on an individual's financial well-being. As the cost of...
Read More
Top 5 : Best Street Art Murals in Singapore
Mandarin Top 5

Top 5 : Best Street Art Murals in Singapore

Singapore, a vibrant and multicultural city-state, is not only known for its iconic landmarks and delicious cuisine but also for...
Read More
Top 5 Secrets : Foreign Investors Are Rarely Told About Singapore’s Real Estate Market
Mandarin Top 5

Top 5 Secrets : Foreign Investors Are Rarely Told About Singapore’s Real Estate Market

Singapore's real estate market has been a popular choice for foreign investors due to its stable economy, strategic location, and...
Read More
What is Buyer’s Stamp Duty (BSD) in Singapore and How Does It Work?
All Blog Posts Opinion

What is Buyer’s Stamp Duty (BSD) in Singapore and How Does It Work?

TLDR When it comes to navigating the Additional Buyers Stamp Duty (ABSD) in Singapore, legal strategies are available to overcome...
Read More
Why Some New Condo Releases Outperform Others
All Buying Tips Opinion

Why Some New Condo Releases Outperform Others

TLDR When it comes to the real estate market, familiarity plays a crucial role in the success of larger condo...
Read More
Top 5 Reasons : Why Investing in Singapore’s Property Market Is a Smart Move for Expats – Expert Analysis!
Mandarin Top 5

Top 5 Reasons : Why Investing in Singapore’s Property Market Is a Smart Move for Expats – Expert Analysis!

Singapore, a thriving city-state in Southeast Asia, has long been a popular destination for expatriates seeking new opportunities and a...
Read More
5 Key Insights to Take Away from the Latest 2022 Cooling Measures
All Blog Posts Buying Tips

5 Key Insights to Take Away from the Latest 2022 Cooling Measures

TLDR Affordability of HDB Market: Government is focused on ensuring affordable public housing and may increase supply if needed. Long-term...
Read More
Top 5 Coffee Shops in Singapore for Coffee Lovers
Mandarin Top 5

Top 5 Coffee Shops in Singapore for Coffee Lovers

Singapore, a bustling city-state known for its diverse culture and vibrant food scene, has also become a haven for coffee...
Read More

 

Compare Listings