What’s the difference between 99 years vs 999 years property investment? For starters, a freehold property is usually held indefinitely by the owner. So, a property with 99-year leasehold is usually returned to the state once the lease expires. On the other hand, properties with the 999-year leasehold are usually holdovers that are from the colonial era. They are normally considered as freehold because of the long period of the lease. In Singapore, there are three types of tenures designed for condos i.e. freehold, 99-year, and 999-year. The latest 999 Years Leasehold Development will be Ki Residences which is located at the heart of Clementi by Hoi Hup Realty. Ki Residences will be available for sale soon at the mature estate of Clementi.
Difference Between 999 Years and 99 Years Leasehold Developments
Regardless of the type of lease, they are certain provisions which allow the government to reclaim them. This could be for security reasons or for the development of infrastructure. This means that if you have a freehold property located in the way of the main highway, this means that it can be taken. Note that a developer can also make an en-bloc attempt aimed at your freehold condominium. In case the other residents agree, this also means that you will be forced to move out.
99 years vs Freehold: Which One is Worth More?
Property values are different so this makes this question complicated to answer. So, what does this mean? A freehold property that’s located on the outskirts of CBD has a lesser value than a property located in CBD with even 75 years of lease left. One of the main factors that make it difficult to determine a property’s worth is the lease.
Research done by real estate investors and analysts indicates that leasehold certainly has price effects. According to this research, it’s okay to conclude that:
Reality of 999 Years Leasehold Development
– A freehold development fetches better money during en-bloc but this is only practical in theory. Well, this is because an en bloc can be affected by factors such as zoning laws, the nature of the market, as well as the nearby amenities.
– It’s more theoretically correct to say that a freehold development has many benefits. The reality is totally different.
– Leasehold is great for rental yields: rental yield simply means the annual rental income. This amount is usually divided by the total property cost. The lower the cost, the higher the yield. Note that the rental income remains constant. So, whether the condo is on leasehold or freehold, it remains unaffected.
– The price difference usually occurs at the 21-year and 40-year mark: A new freehold property will cost 10 percent more compared to a property on lease. But freehold properties have a high depreciation rate than leasehold properties, which is usually at the peak in year 21 and 40.