The Straits Times | April 20, 2013
But look out for hidden issues such as parking, cost of restoration: Analysts
Many home hunters may assume that landed freehold property - the rarest of land titles in Singapore - is way out of their reach.
Not necessarily so.
Fairly small freehold plots in Geylang and MacPherson have been selling for about the price of a suburban condominium.
The 10 cheapest freehold landed properties were sold for under $2 million apiece last year, a check with the Urban Redevelopment Authority's real estate information system (Realis) showed.
The cheapest freehold landed property sold last year was a terrace house with a land area of 1,841 sq ft, on Westerhout Road in the central district of Geylang, selling for just $720,000 or $392 per sq ft (psf).
Another terrace house with a land area of 893 sq ft in MacPherson Garden Estate was sold for $1,133,000, or $1,276 psf, in September last year.
According to Realis, the second cheapest freehold landed home sold last year was in the prime location of District 10. The terrace house on King's Road was sold for $800,000. But analysts suggested that the transaction was unlikely to have been at market value.
"The freehold property in District 10 sold for less than $1 million is definitely a one-off transaction, possibly between related parties," said OrangeTee executive director Michael Tan.
The last transaction in the neighbourhood five years ago was for $2.5 million, while another landed home on King's Road was sold for $1.87 million in 2007.
According to a report by consultancy DTZ, resale prices of freehold landed homes in prime districts rose 7.3 per cent last year.
In contrast, resale prices of freehold condo units in prime districts rose a milder 2.3 per cent in the same period, said DTZ.
Suburban leasehold condominium prices rose 3.4 per cent last year, down from a jump of 8.4 per cent in 2011.
Analysts pointed out that much of the value of landed properties lies in the land, rather than the dwellings built on them.
"In Singapore, foreigners are generally not allowed to buy landed homes. As such, prices and demand for landed properties are less volatile and speculative," said PropNex chief executive Mohamed Ismail.
Freehold landed properties in MacPherson Garden Estate are being marketed at $1.6 million to $1.8 million. The plots are between 883 sq ft and 1,050 sq ft, said real estate agent Tommy Ng.
"The prices of these landed homes can be below $2 million mainly because of the land size. Though the psf price may seem high, the total quantum is still affordable because the land size is small," he said.
He said buyers of such landed homes are becoming younger, aged between 35 and 40 years old. Three years ago, most buyers were above 40.
Other reasons that some landed homes are sold at a lower price are the age, condition and location of the property, said DWG senior manager Lee Sze Teck.
"Some homes could be single-storey, have very few rooms, dated design, are poorly maintained and far away from amenities and public transport," said Mr Lee.
Mr Tan also said properties marketed below the market price could have hidden issues.
"Parking or quality of the neighbourhood could be possible reasons for the low asking price. For example, there are landed properties with car porches that are too small for big cars," he said.
Experts warned that buyers should take note of the amount of money they need to fork out to restore and maintain the property.
And those shopping for private leasehold landed properties should mind the remaining lease.
"Anyone looking at a property with a lease of less than 60 years should be more cautious as you will need to fork out a large amount of cash, and there is less demand in the resale market subsequently," said Mr Ismail.
Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Senior Sales Director
DTZ Property Network Pte Ltd (L3007960A)