Singapore Property | Business Times has reported that there is a change in trend in the ongoing en bloc fever, as developers prefer leasehold properties instead of the freehold.
A study by Cushman and Wakefield indicated that the number of units of properties on leasehold transacted en bloc rose to 92% in the previous year and 83% in 2017.
The figures have shifted from those recorded in the 2008 – 2013 en bloc boom where the majority of the units under the en bloc sales were on freehold.
According to Christine Li, research director Cushman & Wakefield, the en bloc boom of 2005 – 2007 had more than 70% of the total sales being freehold properties.
Players in the industry have credited the change to the high demand of private homes in the mass-market as well as lacking government land sales supply.
“Developers favor leasehold sites that are bigger since they have bigger economies of scale and consequently generate more income,” said Ong Teck Hui, JLL.
Other than being bigger, the former Housing and Urban Development Company estates are somewhat cheaper based on land rate psf ppr in comparison to other en bloc sites, which makes them more attractive.
Tan Hong Boon, director of investments JLL observed that more HUDC estates that have been privatized are available than before. Due to their large nature, they are suitable to meet the land-banking needs of developers.
“Majority of HUDC owners have reached their 60s and they want to sell their properties whose leases are depleting,” added Tan.
“The 10 – 15% price premium of freehold properties over leasehold ones was hindrance to buyers and investors who are quantum-sensitive since the TDSR is still in place,” said Li. Click on the links to view some freehold properties such as the Belgravia Villas, a freehold strata landed, City Suites, a freehold 1 bedroom development in D12 as well as Belgravia Villas Phase 2.
Ian Loh, Knight Frank investment and capital markets head concurred and said that affordability plays a big role in a product selling in the highly regulated property market Singapore.
You may also read on the condominium units available by the developers in year 2017 by clicking on the link.