Land Ownership

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Land Ownership

Land ownership in Singapore falls under two categories: freehold and leasehold.

 

What is Leasehold Property?

As the word LEASE denotes, it simply means that the property owned will expire at the end of the lease term tenure. The proprietorship of land is of a fixed period as detailed in the lease document, range from thirty years, sixty years, 99 years or 999 years with the most common is 99 years. At the end of the leases, the rights of the leasehold owner are effectively nullified. For 99-year leasehold Housing Board flats, the unit will be returned to HDB, which will then surrender the land back to the state.

Some flats in older estates may be selected for redevelopment under the Selective En bloc Redevelopment Scheme (Sers). For private property owners who want to continue living in their homes, they can apply to the Singapore Land Authority (SLA) to top the lease back up to 99 years. It requires SLA’s approval and the premium will be determined by its chief valuer. Owners must first reach consensus. If the property is older than 10 years, at least 80 per cent of the owners must agree to the sale or the lease top-up. In a collective sale, the incoming developer will have to pay to take the remaining lease back up to 99 years. This makes it more difficult for owners with shorter remaining leases to find a willing buyer.[/vc_column_text][vc_single_image image=”8707″ img_size=”large” alignment=”center”][vc_column_text]

What is Freehold Property?

Freehold owners will hold on to the land title in perpetuity. This means there is no expiry date. Freehold is more valued when it comes to the proprietorship of land. But on the other hand – when it comes to Freehold condominiums (also known as freehold strata) and other types of properties, owners will get a certain share value. The Freehold property price may be as much as 17% higher than Leasehold property in the same scenario. Financiers, lenders or the Banks will not enforce any loan bounds when it comes to 999 years leasehold and freehold property as well; thus, it is easier to get a loan with lower interest for Freehold land.

 

How it Affected Real Estate Market?

 

  • Affect affordability, stability, and market price

  • Emerge of various building typology, especially residential

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Affordability, Stability, and Market Price

 [/vc_column_text][vc_column_text]The land acquisition allows the government to control housing development project at the same time the government able to provide various affordable housing for the residents despite the high cost of land in Singapore. Looking at the comparison of median housing price between few major cities below, we can see that Singapore housing is lower than a market price rental house in other cities. In addition, price to income ratio also gives a broad sense of affordability of house in Singapore. In addition, Singapore has the highest number of homeownership rate compared to other countries.

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Emerge of various building typology

Emerge of various building typology caused by the demand of residents. Singapore real estate market can be divided up, labeled, categorized, and sliced into various forms and types of housing types. The detail report of residential typology can be seen here.

Public Housing – (HDB): Public Housing is subsidized and regulated by the Housing and Development Boards (hence HDB), the flats were hugely popular and today more than 80% of Singaporeans live in public housing. Relatively cheaper housing does come with some strings attached, the most notable of which is that to be eligible for HDB property your household income cannot be a specified amount. HDB flats were built primarily to provide affordable housing for the poor and their purchase can be financially aided by the Central Provident Fund

  • HDB consists of studio, 1, 2, 3, 4, and 5 Bedrooms unit.
  • 3Gen Flat: The HDB is trying out a new type of design dubbed the 3 Gen Flats, or 3 generation flats,  specifically tailoring to multi-generational families.
  • Executive Flats: The highlights include an extra space, ideal for a study room or alternative television corner. Additionally, some of the executive flats come adorned with a balcony
  •  DBSS falls somewhere in between the larger HDB flats and an Executive Condominium

 

Public – Private Hybrids: It’s a public-private partnership between government and private entity. Executive condominium is one type of Public private hybrid.

  • Executive Condominiums: type of property starts off as a public housing unit, then phases into private housing after 5 years of ownership. Tailored to young professionals who can afford more than an HDB flat but find private property still a little out of reach, the executive condominium share most of the design and facilities of a private condominium yet has the cheap edge of being HDB issued. the executive condominium comes with a 5-year Minimum Occupation Period (MOP), which means that you have to live in the condominium for at least 5 years before you are granted the rights to sell it on the open market to Singapore Citizens and PRs

 

Private Housing: The different types of private residential property can mainly be subdivided into two main cadres: landed property and Condominiums/apartments.

  • Condominiums: Condominiums can be regarded as the liberated, and relatively unrestricted brother of the executive condominium. Home to recreational facilities such as swimming pools, security, gyms and at times tennis courts, basketball pits, and well-maintained gardens, condominiums are the go-to option for those who are looking for private housings yet find landed properties either too expensive or too much maintenance.
  •  Apartments: Apartments are similar to condominiums yet they tend to be part of smaller developments and are home to less generous provisions of communal and recreational facilities. Apartments are generally more affordable than both landed property and condominiums.
  •  Walk ups: Brilliantly coined the “walk up”, this particular type of dwelling is a condominium or apartment that has been specified for not including a lift.

Landed Property: Landed Property is by many Singaporeans viewed as the housing equivalent of reaching the top tiers of the society’s social ladder.[/vc_column_text][vc_column_text]

Who’s being Disturbed?

 

  • Real Estate Developer & Speculator

  • Private Land Owner

  • Lender

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A Brief Overview       Real Estate Disruptions on Orchard Road      Case Study: 313 vs Peranakan      Predicting the Future

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