Invest in THE SHORE residence and Greenwood terrace

Singapore Property Buyer

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In view of the recent few launches such as that of “The Shore residence” and the “Greenwood terraces”, both of which are bought as Free hold land, redeveloped and sold as 103 years lease hold strata title. These are 2 Far East developments which have been launched recently.

Singapore government can release land in various forms, but more likely than not, most land parcels being released are 99 years leasehold land, while very few are freehold or 999 lease hold land. This means that the supply of perpetual land (FH, 999 lease hold) are diminishing all the time.

In land scarce Singapore, this means that in the coming years, Freehold land may become even more scarce.

The recent developments where developers who bought Free Hold land, develop and then subsequently sell it as 99 years lease hold could further accelerate the depletion of Free Hold land to the public.

We look at the implications of such developments

IMPLICATIONS OF DEVELOPERS RETAINING A REVERSIONARY LEASE

Developers may now bid for many Freehold land parcels or take over existing free hold property through en-bloc sales. The Singapore economy is still weak, if you look at the salary census, Singapore’s salary growth has been slower than that of growth of property prices.

In other words, affordability is an issue. Say for instance a couple earning a combined income of $10,000 a month with no financial commitment on a 30 years loan repayment tenure can only afford a $987,000 Singapore property loan with a threshold interest rate of 4.5%.

At 20% downpayment, and a loan of $987,000, the property price that such a property buyer can afford is $1,233,750.

If the property developer who wants to market his property at $1300 psf for a 1,100 sq feet property, the Singapore property developer would need to either reduce prices or reduce size to meet that affordability figure.

Singapore property developer's goal

The developer’s goal is always to maximize profit (There is nothing wrong with it).

Trend of Smaller singapore condominium units

In this scenario, the property developer can choose to reduce the size of unit, thereby meeting the affordability price quantum and achieve superior price per sq feet per plot ratio (psfppr). This could lead to a trend of smaller size condominium units in the future.

FH land becomes Leasehold 99 years land

In another scenario, the property developer opt to maintain the size of the unit, but converts the Free hold land to a 99 years leasehold land. The developer owns the Free Hold land title. This could lead to the gradual disappearance of the Free Hold land titles available to the public.


Overtime, if the law permits, developers could even sell properties on 70 years lease, 50 years and lesser.

Singapore hands power over to the large property developers?

If developers are allowed to hold on to the free hold land titles while developing properties and selling it as a 99 years lease, then this will over a period of time dilute the effectiveness of Singapore Land authority to regulate the market.


Say for instance when the building is 20 years old and run down, the residents opt for selling en-bloc, they can sell en-bloc for the remaining lease of 79 years. Whoever buys this piece of land en-bloc would find it hard to redevelop and sell it again as there is not much lease remaining.

Supposedly in any potential en-bloc deals, the residents are only selling the remainder 79 years lease of the land to another developer.

In order to make this development attractive, a top up of the lease by 20 to 30 years would be required. In the case of topping up of this lease, the property developer that owns the land has the final say on setting the rates. (Not SLA’s Development charge).


So whether you can en-bloc or not depends solely on the goodwill of the property developer. If the property developer sets a high price for the top-up, then that would mean that no other developer would want to bid for it, leading to lower market value for that property.


The final rights then remains in the hands of the developer who owns the master title of the free hold land.

In this case, Far east wold retain the rights and option to develop the land should the residents want to go en-bloc. Far East having a right to set development charges or extract additional fees, will have the first right of refusal in any land parcel development.


As more and more developers do this in the near future, the authority of Singapore land authority could become eroded. There is always a worry that such developers will eventually wield too much power.

DEPRECIATION OF THE CONDOMINIUM BUILDING

Let’s say the building is poorly maintained, the condition becomes worse, over time the value of the building drops. So in such a scenario, even if Far east makes an offer for the land that is giving only a slight premium, the residents will have no choice but to accept the offer and sell back the remaining lease to the developer and lose any potential upside.

WHAT IS PROPERTYBUYER.com.sg STAND ON THIS?

PropertyBuyer.com.sg is a Singapore mortgage consultants that is research focused, so what we do are to merely to inform the public of these matters. Whether such deals are good deals or not, it is a matter between the buyer and seller. We only state it as it is, the way we understand it.

We have already got in touch with Singapore land authority to enquire about under what circumstances are developers allowed to buy Free Hold land and release it back as 99 years lease hold land.

We are not against property developers maximizing profit. Ultimately it is a matter of buyer power versus seller power. If the seller has the pricing power, it is very obvious that buyers will have to do so on the seller’s terms and the reverse is true as well. Ultimately all profit seeking enterprises are there to make money, and rightly so.

What does this mean for you if you own a FREE HOLD properties?

We are checking with SLA under what statute or circumstances are such arrangements allowed. If this is allowed, wouldn’t you then be able to offer your Free Hold landed property for sale at a slight discount as a 99 years lease hold property?


Imagine, this is really a unique way of passing money and assets to the next generation while retaining a vested option in the land value of the property.
I would say, it has all the UPSIDE and none of the downside.


Stay tuned while we wait for a reply from Singapore land Authority.

Invest in Singapore property using CPF

Singapore Property Investor and CPF funds for second property



CPF is abbreviation for Central Providend fund. It is similar to the American 301k plan. CPF funds are supposed to be saved for retirement.



Every Singaporean must contribute 20% of their income into CPF. Therefore Singapore’s CPF has billions of dollars of funds. Singapore property investor and Singapore property buyer also have lots of fund and liquidity, unlike other markets. The Singapore market is more about confidence than about liquidity.



About Property Buyer Contact Property Buyer

www.PropertyBUYER.com.sg

We are a Research-focused Singapore Mortgage Consultant which helps you compare Singapore Home loans either for new home loans or refinancing, we balance risks versus rewards for each home loan to match your risk profile and financing needs.

Buying property is a serious affair, we do NOT advocate a Greed based buying approach, we emphasize that you need to check your affordability and do your sums right. If you are unsure, we are happy to help you check.

Not Simply Cheap, but what Fits. We Research, You Save!

Tel: 6100 - 0608

SMS: 9782 - 8606

loans@propertyBUYER.com.sg

CPF causes you to overpay?

Singapore government likes to get maximum value for its land. If too many people can afford Housing, it is time to raise prices. In other circumstances, we can say it’s market forces or free market as supply and demand are determined by private enterprise. But not in this case.



HDB Government Housing market is Not a free market

But in Singapore’s case, government housing (HDB) is a controlled market, www.propertybuyer.com.sg is often critical of the way some policies are dished out, to the disadvantaged of the Singapore property buyers.



Many people along with us also see the setting of prices as arbitrary, because the government controls much the state land and there is no question of supply, but rather that of demand and affordability. The government can freely control supply to set prices.



CPF funds adds to affordability

Allowing the use of CPF funds for HDB and property in general raises the affordability.



With this new found liquidity, the government can then raise the selling prices of HDB, by putting in more frills and of course enhancing the construction industry producing more value add.



Of course, ultimately the home buyers and the Singapore property investors are the ones that pay for it through sapping up their retirement funds in CPF.



Raising prices of HDB flats is a means to sap liquidity out of the individual’s CPF account into the government coffers through land sales.



Since the Singapore property investor – buyer may have limited cash, the Singapore government allows the use of individual’s CPF funds to pay for their government “subsidized” housing. As a result properties become more and more expensive, effectively becoming an indirect tax.

Coupled with more funds (through the use of CPF) money, plus low interest rate environment, many Singapore banks cannot reduce rates much more rather they start to come out with newer terminology and features. Comparing Singapore Home loan has become much more tedious exercise, it is prudent to engage www.PropertyBUYER.com.sg mortgage consultants to help. They can be contacted at +65-6100-0608.



Refinancing home loan can also be tedious.



Singaporeans have lesser and lesser CPF money for retirement



Singaporeans have lesser and lesser CPF monies left for their retirement as they pay for ever more expensive properties. At some stage, we have to say, “Mr. Government, stop eying our CPF money!!!”



Since so many people are resigned to the fact that they will never really see their CPF money as cash as more and more rules are put in place to tap into their CPF.



Even after retirement age at 55 years, there is the minimum sum that you have to set aside. Currently (as at 2009) the minimum sum is $117,000 for retirement. This is the minimum sum that a person must have in the account. You can only withdraw any CPF funds in excess of the minimum sum upon retirement age.



Many Singaporeans have already given up on hoping to see their CPF money. As a result, many Singaporeans and PR used CPF to buy their second property before 1st July, 2006.



Can I use my CPF to purchase more than one property?

(Source: www.cpf.gov.sg)

Yes, you may use your CPF to purchase more than one property.

However, if you already own a property (HDB flat or private property) bought with your CPF savings and wishes to buy another property with CPF savings from 1 July 2006, you will be able to do so only after setting aside in your Ordinary and Special Accounts (including the amount used for investment from the Special Account) the prevailing Minimum Sum cash component if you are below 55 years, or the Minimum Sum cash component shortfall if you are aged 55 and above.

If you currently own more than one property bought with CPF savings before 1 July 2006, you need not set aside the prevailing Minimum Sum cash component unless you subsequently buy another property using your CPF savings on or after 1 July 2006.



Please note that this is not applicable if you are applying to use your CPF to purchase a second or subsequent property with non-related singles. Non-related singles can only jointly use their CPF to purchase their one and only property (private property or HDB flat).



Your first property can be used as a pledge for half the monies required under the Minimum sum. This means that if you with to use CPF for your second property (as at 2009), you must have at least $58,500 ($117,000 x 50%). Any CPF above $58,500 can be used for your second property.



Is Singapore Market over Leveraged?



Although Singapore is no where near as dangerous as other markets where there are plentiful “no cash down” home loans. With CPF being allowed to make up the 15% down-payment on the purchase price and only 5% is cash down-payment, we at www.PropertyBUYER.com.sg would consider the Singapore market rather leveraged compared to the early say 5 years ago or pre-2000.

The current property boom in 2009 lacks fundamentals (Refer to Property Buyer update July 2009 in the article section of www.PropertyBUYER.com.sg/articles/article.php) as its underpinnings, so it is still hard to say whether sentiments will change the economic fundamentals or economic fundamentals will eventually bring the sentiments back in line.



There are good and bad deals in every property cycle, please exercise your own good judgement.





About Property Buyer Contact Property Buyer

www.PropertyBUYER.com.sg

We are a Research-focused Singapore Mortgage Consultant which helps you compare Singapore Home loans either for new home loans or refinancing, we balance risks versus rewards for each home loan to match your risk profile and financing needs.

Buying property is a serious affair, we do NOT advocate a Greed based buying approach, we emphasize that you need to check your affordability and do your sums right. If you are unsure, we are happy to help you check.

Not Simply Cheap, but what Fits. We Research, You Save!

Tel: 6100 - 0608

SMS: 9782 - 8606

loans@propertyBUYER.com.sg

Invest in Singapore Property: Building under construction payment schedule

Payment Schedule of BUC properties

The below is a typical payment schedule for the Singapore Property Buyer. (This is not indicative of all cases)

1% of the purchase price
Option to purchase.

4% of the purchase price – 14 days after Option to purchase.
Exercise option

Payment of Stamp Duty (~3%)
28 days from option to purchase

15% of the purchase price
12 weeks after exercising option to purchase.

If the property that you bought is an uncompleted Condominium, then you will have to pay progressively as the building achieves various milestones.

10% of purchase price – Timing depends on speed of construction
Notice of foundation work completion.

10% of purchase price
Notice that reinforced Concrete framework of the unit has been completed.

5% of the Purchase Price
Notice that the brick walls of the unit have been completed

5% of the purchase price
Notice that the ceiling of the Unit has been completed.

5% of the purchase price
Notice that the door and window frames are installed and the wiring and plastering have been completed.

5% of the purchase price
Notice that the car park, roads and drains serving the housing project have
been completed.

25% of the purchase price
Payable 14 days after notice of vacant possession and the Temporary Occupation Permit of Certificate of Statutory Completion n respect of the unit (or a certified copy thereof)

A certificate by the qualified person engaged by the vendor that the building and all roads and drainage and sewerage works serving the Housing project have been completed and that the water and electricity supplies, and gas supplies (if any) have been connected to the unit.

15% of the purchase price
On Completion date. Of which 2% is payable to the vendor (i.e. the developer) and 13% is payable to the Singapore Academy of law as stakeholder.
Whether you can afford the condominium or not, buying a condominium under construction can be a good way to gradually put up the cash for buying a property.

Smoothing out Funding of a Private property
In the case where you have the earning capacity, but you will need some time to recover after the initial 20% downpayment. The Singapore home loan installment will be lesser at the earlier stages, this enables you to save up and build up your cash reserves as there may be many other costs associated with owning a private property.

If you are Singapore property investor, if your view is that the property market will pick up in a few years, buying a property under construction is similar to buying shares on “Contra”, except that this “contra” gives you several years of holding “option”.

Many speculators like this feature which gives them the chance to finance a property cheaply and flip the property for a profit.

Genuine Home Buyers can get burnt buying a Property Under Construction

Due to the ease of financing, holding on to a Building under construction during the early stages can be rather cheap. This means that speculators can easily get in and bid up the prices for genuine buyers, creating a squeeze on the prices.

This means that such buyers will tend to end up paying a higher price due to cheap singapore home loans.

How to profit from Property Under Construction?

Due to the presence of speculators, when the pressure mounts and when they cannot turn a profit flipping the property and cannot lease the property out and starts to default. You can then stand on the side lines to punish these greedy speculators and pick up the properties cheaply.

Singapore SIBOR Home loan mortgage

Courtesy of www.PropertyBUYER.com.sg

Singapore Interbank Borrowing Rate is commonly referred to as SIBOR.

Sibor is traded amongst banks at the Association of

Banks Singapore (ABS)


Contact us

Tel: 6100 - 0608 sms: 9782 - 8606

Email: loans@propertyBUYER.com.sg

http://www.propertybuyer.com.sg/contactus.php


The Singapore economy is still hurting, however the absolute worst may be over.

Given that the economy has stabilized, the Sibor and SOR tends to stay low

in a weak economy.

Reduced Risk of Major melt down.

So in short, the major risks of credit crisis or financial meltdown is much

reduced. Sibor and SOR should not hike due to panic.

Risk of Inflation

Each medicine comes at a price. The price is a hang-over or side-effects lasting

several years.

Obama's massive fiscal stimulus and that of many countries are going to hit

the fan soon.

Is the USA printing money

You cannot create something out of nothing. What the USA did by pumping

the economy is similar to creating 1+ Trillion dollars out of thin air.

The only reason why it is not a PURE "PRINTING money" exercise is

because the "Printing" is financed through debt.

The extra + 1 Trillion is created, but debt is created to finance it, so there is

minus - 1 Trillion. So +1 trillion - 1 trillion in debt = 0 (not printing).

But when you add 1 trillion to a 14 trillion dollars economy, that is something

like 7% of US GDP. Surely after some of the deflationary pressures are

sorted out, if the US do not pull this money out, a serious inflation may

appear.

So far, the US government have reiterated that they have plans in place to suck up the

excess liquidity. We think that would be tough. Take it away too soon, economy falls

back into recession.


SOR and SIBOR is quite directly affected by US Fed funds rates and policies.

If the US suffers from inflation, the world's economy may suffer as well. And

Sibor and SOR may shoot up too. We cannot rule out this possibility.


Get Home Loan or Refinance Home loan with www.PropertyBUYER.com.sg

We never emphasize cheap loans, we never emphasize we are the best

home loan company.


What we do is a research focused approach to help

busy home owners sort out the home loans and refinance home loans

balancing risk and rewards for each possible option they choose.


ABOUT US Contact us

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Download FREE Property Checklist / Guide (Kiasu Property Checklist)

Singapore Property Investor and Buyer update June 2009

Singapore Property Investor and Buyer update June 2009
Courtesy of www.PropertyBUYER.com.sg

The property market has woken up remarkably from late Feb to now. Credit

has also eased considerably. In April and May we have started to see

property sellers becoming greedy by withdrawing their properties from the

market.


Contacts: -
Tel: 6100 - 0608 sms: 9782 - 8606
Email: loans@propertyBUYER.com.sg
http://www.propertybuyer.com.sg/contactus.php

Remember we wrote in an earlier article about herd mentality, that when the market rises, everyone wants to go in. And sellers

withdraw. And when the market drops, suddenly every seller wants to come into the market and sell to add on to selling

pressure. This is the typical BUY HIGH, SELL LOW syndrome driven by 2 factors. Excessive greed and excessive fear, both are

bad for your financial health.


Obama's plan to stimulate the market to the tune of more than US$1 trillion dollars have finally sunk in, and the market

believes it will alleviate credit and share market has rallied in expectation that the recovery is coming. We emphasize the word,

"expectation". House prices have however continue to fall although it has fallen at a smaller rate which the market considers a

win!

Jobs are still being lost, although at a smaller rate which the market again consider a positive sign.

So these days, it seems that the market will take whatever slightly positive news and hope for the best.

The worst of the credit crisis looks over, however is consumption returning?


That is the doubtful part as US unemployment rate has broken through 9% as we write and will continue to worsen. (Although it

is worsening at a slower rate) We are hopeful that a recovery is coming. Americans consumers are losing wealth in the billions

as we speak, so it is expected that they will not be able to resume fully to their spending patterns of previous years.


Singapore Market Liquidity


There is enough liquidity (i.e. Money) in the Singapore financial system. In Jan 2009, Singapore's M1 money supply increased

by around 6 billion. There is also sufficient liquidity in the hands of the population (though it is not evenly distributed),

reduction in property prices tend to be able to draw out latent pent-up demand.


But is the recovery sustainable?

We seriously doubt that.

The Singapore GDP is still falling at a projected 6 to 9% annualised rate for 2009. Q1, 2009 GDP annualised fall is around -14%

and in order to reach our goal of a -9%, this means Q2 should come in around -10 to -12% and Q3 should be better than -9%

and Q4 should at least come in at -4 to -5%. And that will enable us to achieve a -9% GDP.


The large chip off our GDP is caused by our over-dependence on exports.

Demand overseas have fallen, factories have shut their gates, therefore, this

segment of the economy will continue to suffer.


Our exports depended a large part on the USA.

So while our Singapore GDP languish and unemployment continue to rise, it

is very hard to see how this recent property rally can be sustained after the

pent-up latent demand has been exhausted. A more stable market yes, but a

rising market? We doubt.


After August when the quieter property volume months resume, together

with reality of job losses, more property launches. So by August and

September we should get a clearer picture of the market.


Developers are clearing stock

The market is getting hot now, developers are launching 99 years properties

again to "CLEAR stock", so unless you really like these properties, there is a

reason why they clear the 99 years and not the 999 or FH properties in their

portfolio.


EN-BLOC developers Leasing out their properties on 2 year leases

Some developers who had bought en-bloc developments and who have

been lucky enough NOT TO TEAR down the development yet, have begun

leasing their properties out on 1 year and 2 years leases. This also indicate

that these developers who have been caught out cold are expecting that the

economy will NOT RECOVER ENOUGH for them to tear down and launch their

properties for sale at the prices they want. So rather than tear it the property

down, they are leasing it out on 2 year leases and tying themselves in.


Exercise Caution

There are always good deals and bad deals in any property cycle. People

buy property for various reasons. We are not advocating whether to buy or

not to buy, but rather that you should exercise caution when buying (if you

buy).


Dishonest Property agents are on the loose again when market hots up

Property agents are again out on the loose and here is one on Singapore

Management University (SMU). Do not buy on impulse or greed and do NOT

bring your cheque books when going for a viewing. It's okay we lose a Home

loan deal, but it's not okay if you over-pay by too much.

we strongly encourage you to do your home work.

http://www.propertybuyer.com.sg/viewnews.php?article=107

But if you still decide to buy after reading our articles, please consider to use

our services for Getitng your HOME LOAN or to refinance your home loan. The service is free to you as we receive a fee from

the banks.

Contact them at: -
Tel: 6100 - 0608 sms: 9782 - 8606

Email: loans@propertyBUYER.com.sg

http://www.propertybuyer.com.sg/contactus.php


Property Checklist / Guide (Kiasu one)

http://www.propertybuyer.com.sg/viewnews.php?article=39

Read More of their articles

http://www.propertyBUYER.com.sg/articlesnews.php

Invest in Singapore property: Select right property

Invest in Singapore property: Selecting the right property
Courtesy of www.propertyBUYER.com.sg
http://www.propertybuyer.com.sg/viewnews.php?article=109

There are many things to consider in property investment. Financing is one of them

First of all, let us clarify, we are NOT property agents, so we have no vested

interest in what property you select. We are merely writing this based on our

experience. We are Singapore Mortgage Brokers who help you get home

loans or to refinance your property.

Tel: 6100 - 0608 sms: 9782 - 8606
Email: loans@propertyBUYER.com.sg
http://www.propertybuyer.com.sg/contactus.php


The key things to consider in Property Investments are: -

* Affordability and holding power

* Rental yield

* Capital appreciation


Affordability and Holding Power

Ideally, you should not purchase an investment that is way beyond what you

can Safely Afford.


You should also have good holding power to withstand Mortgage home loan

interest rates fluctuation as well as have enough cash flow set aside for up

to 24 months of Mortgage Home loan installment.


This is important as market condition can become volatile and the last thing

you want to do is to sell your investment property at a huge loss in a

Singapore Property market stricken with panic.


You can check your affordability with us: -

Email: loans@propertybuyer.com.sg


Rental yield and Income

Rental yield is important in a property investment. However rental yield

cannot be over-emphasized.


What is important is the Return on Invested Capital (ROIC), most commonly

referred to as ROI.

Rental yield is: -

Annual Rental divide by Property purchase price


Return of Invested Capital (ROIC): -

[Annual Rental - (Interest financing cost) - (Maintenance & Misc Cost)] divided by Invested Capital

By looking simply looking at a property investment and comparing yield can

be very mis-leading. It is similar to looking at P/E for shares. As rental prices

fluctuate, so does property prices.


Buying based only on investment yield is the of the most foolish mistakes a

property buyer/investor can make.


RENTAL DEMAND

Singapore's rental demands are mainly derived from foreign expatriates as

most Singapore citizens own their own homes.


RENTAL SUPPLY

Property stock do not stay the same, as Property Developers will likely get

first hand information from Governmental development plans in order to add

to the supply.

PROPERTY VACANCY RATE

Singapore's property vacancy rate have traditionally stayed at around 6 to

8%. This means that 6 to 8% of all private properties remain vacant.


From the recent late 2006, 2007 and 2008 experience, especially in 2008,

population grew up around 5.5% to 4.8m. The bulk of the population growth

is through foreigners coming to Singapore to work or stay. This drives the

vacancy rate downwards to around 3 to 4%. Rental prices start to shoot

upwards when vacancy rate drops to around 3 to 4% as this indicates

severe shortage.


In order for vacancy rate to go from 7% to 3% (within a year), based on the

property stock of ~ 300,000 units of private property, that is 12,000 units of

additional rental demand needs to be created.


Given that property developers are adding to the stock all the time, in 2008

forecast supply growth is around 4%.


That means for 2009, there needs to be 24,000 rental demand (within a

year) in order to SQUEEZE the rental market. Of course certain locations

will be more SQUEEZED than the others and start to rise first.


Otherwise, the rental market will remain very SLACK and without direction.

What happens when RENTAL yields go up?

When rental rates go up, the yield increase. When the yield increase, the

property prices go up.

So it is important to look at YIELD for a rolling 2 to 5 years instead of simply

the latest and most recent yield.

As an illustration, a Property with a 4% Rental yield.

In 2006

$3,000 per month or $36,000 per year ------> $ 900,000

In 2007

$3,500 per month or $42,000 per year ------> $1,050,000

In 2008

$4,500 per month or $55,000 per year -------> $1,375,000

In 2009 and Beyond???

$3,000 per month or $36,000 per year -------> $ 900,000

Given that property developers usually hold out till rental prices are good

before they launch so as to capture the BULK of the VALUE. And because

the property developers time it so well, the BULK of the VALUE created for

their company is from you and paid for BY YOU.


The average yield for SIngapore Properties is around 3 to 5%. At 4%, it

represents a 25 times leverage.

For every $100 increase in monthly rental, it leads to $1200 rise in annual

rental and hence $30,000 more for a property!!!


MAJOR RISK BUYING AT HEIGHT OF RENTAL PRICES

If you go in at 2008 thinking that a property is NOT BAD at 4% yield, it is

worth it to pay $1,375,000, you are exposing yourselves to a huge risk,

because if rental values cannot keep up or falls back, you are looking at a

$475,000 of capital loss.


WHAT IF BANKS ASKS YOU TO TOP UP CASH

And in case the banks exercise their clause to ASK YOU TO TOP UP your

equity in the home / property since the valuation has FALLEN, you will face

severe hardship!!!


CAPITAL APPRECIATION POTENTIAL

Some Singapore properties such as River Valley, Orchard road as well as

Singapore properties around District 9, 10, 11 and 15 have highly volatile

rental prices.

For example a yield of 10%, (formula 1 / 0.1 = 10) the leverage is 10 times.

For a rental of $12,000 a year, this leads to a

Capital value of $120,000


For a yield of 4%, (formular 1/0.04 = 25) the leverage is 25 times.

For a rental of $12,000 a year, this leads to a

Capital value of $300,000


So it is important to compare and get the yield from a Rolling 3 year

average, 5 year average from which to do your calculation. Otherwise you

are prone to make the "Mistakes of small numbers", by basing your decision

on a particular short span of track record of the property market and it's

possible income (rental).


Strata Title

No matter where you go, buying a condominium unit will entitle you to a

share of the land where the condominium is located. The higher the

Condominium go, the less land share you have.

As an illustration: -

Land of Estate = 200,000 sq feet

Plot ratio is 3 = 600,000 sq feet

That means that that entire plot of land builds up to 600,000 of space that

can be SOLD to public.


That can be either 3 storeys x 200,000 sq feet or 6 storeys x 100,000 sq feet

or 24 storeys x 25,000 sq feet each floor. Developers will build higher or

lower depending on regulatory requirements.


Let's say 600,000 sq feet is built into 600 condominium units of 1,000 sq feet

each.

If you own a 1 condo unit, your share of PHYSICAL LAND is only 333 sq

feet.


This is vastly different from owning a landed property where you own the lot.

Strata title risks.

Strata title land has some risks of collective decision making. For example if

80% or 90% (depending on age of property) decides to sell to an en-bloc

developer, even if you disagree, you will have to sell.

En-bloc may not necessarily be a good thing in some circumstances.

Landed Title risks

Landed title do not have the risks of Collective decision being imposed on

you. But it holds other risks. Due to the smaller cost for the government to

acquire your land under Urban redevelopment Authority's land acquisition

act, in case the government wants to build a road through your house, your

house will be forcibly acquired. And although the government pays a market

price (or so they claim) for your property, most people whose property had

been acquired has never been really happy with the compensation. And the

government do time their purchase at a time when the market values are

low, leading to home owners capitalising the losses.


Should we go as high as possible?

Typically NO. Taller buildings have a higher maintenance cost over the longer term. Not only that, you are paying more for a building rather than the Land.


Over time, the building deteriorates. And if the land's appreciate does not

offset the price drop of the aging building, the Capital appreciation could be

moderated.

Should we go as low as possible?

Yes, generally true as you own more of the "Physical Land". But if you want

to own a condominium which has less than 6 storeys high, you may miss out

on speculative demand from Foreign buyers.

6 Storey High Properties

Foreigners cannot buy landed property or property whose development has

less than 6 storeys high. This is to prevent hedge funds and wealthy

individuals from cornering and hence controlling Singapore's domestic

economy through LAND.


Singapore mortgage advisor like us to help you go through many valuations

and recommend a SAFE price to bid for your property. That drags out the

buying time.


Why work through www.PropertyBUYER.com.sg for mortgage home loans?

We help property buyers to look through each property's valuation to

establish a valuation range for any given unit. And based on that, we

recommend a bid price for the buyer.



www.propertyBUYER.com.sg is a research-focused Singapore Mortgage

Advisor that helps individuals get the best fit Singapore Home loans or to

refinance their properties, not simply the cheapest Singapore Home loans.

You can come to us for your Singapore Home Loan needs and we will do the

research work to compare all the bank's packages as well as assess the

best fit for you.

ABOUT US Contact us

Tel: 6100 - 0608 sms: 9782 - 8606

Email: loans@propertyBUYER.com.sg

Contact us

http://www.propertybuyer.com.sg/contactus.php

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Invest in Singapore Property: Jurong Lake District

Invest Singaore, Invest in Singapore's Own Lake District

Courtesy of http://www.PropertyBUYER.com.sg/articlesnews.php

"...National Development Minister Mah Bow Tan yesterday unveiled a vision for a revamped Jurong, starting with a new name: the Jurong Lake District.

The ambitious plan, to be implemented over the next 10 to 15 years, involves building new waterways, 1,000 private homes, 2,800 hotel rooms and adding 750,000 sq m of office and retail space.

The Jurong Lake District, which at 360ha is the size of Marina Bay, will consist of two precincts.

One is the 70ha Jurong Gateway, which will boast swanky new offices, condos and entertainment features, including an Olympic-size ice-skating rink, all set around Jurong East MRT station.

The other is Lakeside, which is being targeted as a hang-out for young families.

It will feature a bold new science centre, tourist attractions and parks complemented by water activities, all set around the Chinese Garden and Lakeside MRT stations.

Mr Mah told a 500-strong audience at an Urban Redevelopment Authority (URA) seminar yesterday that many Singaporeans saw Jurong as a suburban residential and industrial area 'located far away from the city centre'.

But he described it as a 'gem', with compelling reasons singling it out for redevelopment. It is near established towns, with a large labour force and a population catchment of more than one million residents...."
Source: Channel News Asia
http://www.channelnewsasia.com/stories/singaporelocalnews/view/339270/1/.html


Should we buy into the Jurong Lake District Dream?

For those of you who have been to the UK Lake District, you will know that

Singapore's Jurong Lake District will never match up. The air, the breeze
and even the rustle in the wind is different, not to mention the clean air free
of industrial pollutant.

And the above is the BEST CASE scenario assuming the beautiful scenario
comes true.


Will Jurong Lake District become reality?

Do you remember Minister Mah Bow Tan wanted Singapore to qualify for
World Cup in 2010? It's 2009, what do we have to show for it?

Remember what happened to Punggol 21?

http://www.mrbrownshow.com/2007/09/21/the-mrbrown-show-punggol-21-plus-plus/

Do you remember what happened to Punggol 21? The hype, the excitement
and the promise! So many people bought into the dream of a leisurely and
riverside lifestyle. They ended up buying into expensive HDB units which
were half occupied.

The place was so deserted that there were hardly any amenities and facilities. It took a good 10+ years and yet the promise is still not fulfilled.


Singapore's very own Lake District

Any chance of Jurong Lake District happening? We suspect the only people
laughing all the way to the bank are the developers who timed their property
launches after the government announces this publicity campaign.

The government's track record of fulfilling plans such as Punggol 21 and sengkang new town is not compelling. There were a lot of promises.


The industrial parks and the factories are not about to move out of Jurong
any time soon, pollution is still a problem. Although there are some logistics
park and some business parks, building houses around 2 lakes is hardly a dream, much less a beautiful dream.


Even if all the commercial activities do take off, we doubt the place will be a
truly enjoyable living experience as it will be over crowded. (You only need to
take a MRT ride to Boon Lay to experience it today).

Should you pay for your Home at an inflated price?


We would not hold our breath for Jurong Lake District, until more plans and
concrete action becomes available. Not more nice plans and announcements!!!

Should you hold your breath for it? It's up to you, if you already like the place
even before the hype, by all means go for it. But if you are buying into the
hype, we suggest you have at least 10 to 20 years of holding power.

Or you can wait for the Singapore government to cook up another beautiful scenario
and remember to OFF LOAD your property at that time. During this time, the
rental in Jurong is uncertain at best.

This means you should avoid 99 years lease hold properties, because
capital values of 99 years properties do not hold so well when the number of
years remaining on the lease is shorter.

About www.PropertyBUYER.com.sg

www.PropertyBUYER.com.sg is a research-focused mortgage Advisory that do NOT simply emphasize cheap rates but rather what works best for the individual based on his/her circumstances to structure a balanced Risk versus Benefit home loan or refinancing package. The service is Free to you as banks pay them directly as banks save on staffing cost.

Tel: 6100 - 0608 sms: 9782 - 8606

Email: loans@propertyBUYER.com.sg

Contact us
http://www.propertybuyer.com.sg/contactus.php

Read More articles
http://www.propertyBUYER.com.sg/articlesnews.php

Refinance and Mortgages DIY steps
http://www.squidoo.com/Singapore-homeloan