One of the primary advantages of owning a freehold property is that the owner has the assurance that the lease will never expire. Because there is no time limit on ownership, such assets are very valuable for legacy planning because they allow owners to pass them down from generation to generation. A word of caution: governing authorities can still take back that land for national development projects. So, when picking New Property Launch In Singapore, keep a long-term perspective in mind to avoid land locations that are more likely to intersect with national infrastructures such as train lines or communication networks.

Another advantage of everlasting ownership is the convenience of ongoing financing. Banks in Singapore require that properties have at least 30 years of remaining tenure. If the property begins to age, the amount of financing that these institutions may issue, commonly known as the Loan to Value (LTV) ratio, might be drastically reduced. As a result, bidders for properties with limited tenure have fewer financing choices, limiting the owners' ability to sell their properties. Owners of freehold properties, on the other hand, are exempt from this difficulty due to their infinite ownership.

Furthermore, when compared to a leasehold property in the same region, the sale price of a new freehold condo unit can be 10 to 15% higher. Freehold properties are usually one of the more sought-after property kinds in Singapore due to the status and perceived worth that they carry.

Is it true that I own the land if I have a freehold title?

Yes and no; it all depends on the sort of Hyll on Holland Condo.

If it is a landed property, such as a detached house, semi-detached house, terrace house, or Good Class Bungalows (GCBs), the owner also owns the land.

Individual unit owners are not the landowners in freehold condominiums and cluster houses.

The Management Corporation Strata Title owns the land on which multiple property units are erected (MCST). The Building Maintenance and Strata Management Act empowers such an entity to administer and oversee the common property of strata projects such as private condominiums, shopping centres, and industrial facilities in order to fulfil management tasks (Chapter 30C). In summary, it acts as a managing agent to ensure that the property and facilities are kept in compliance with the Act.

What Is the Meaning of En-bloc?

A collective sale, often known as an en-bloc, is the sale of two or more real estate units to a single developer. This happens when a developer wants to buy the land where an existing property is located and redevelop it as a new estate.

What Factors Influence En-bloc Potential?

Condo Plot Plot Ratio

The plot ratio is the most important aspect that can influence en-bloc potential. It governs the height of developments as well as the number of residential units that can be constructed. Developers primarily want ancient condos with underutilised plot ratios so that they can create more residential units than the existing development and earn a higher profit margin.

Development Site

The location and size of the land are also important factors in attracting developers' attention because they might affect the marketability and profitability of the new development. A prominent site naturally attracts customers because to its convenience; yet, if the land size is too large, developers may be intimidated by the higher government tax and charges that they will suffer if the property is not finished and sold out within five years of acquiring the land.

Stability

Tenure is a further sign of en-bloc potential because the older the property, the more likely it is to be the object of collective sales and the easier it is for the developer to gather enough residentials to consent to the sale. For a development older than ten years, only 80% of the owners must agree to sell their properties before the collective sale can take place. The ratio rises to 90% for projects lasting fewer than ten years.

Well-developed Community

A well-developed neighbourhood, such as one with improved accessibility, such as new train stations, amenities, and rising prices in other nearby property developments, can also indicate a potential for en-bloc because development in such areas is more marketable, allowing developers to price their projects higher for a higher profit.

Singapore Enbloc Cycle

The en-bloc cycle appears to be a 10-year cycle. The first wave occurred in 1997, with almost 100 collective sales conducted in the three years preceding it, and the second occurred in 2007, with nearly 170 en-bloc transactions totaling $12.61 billion executed in a single year. There were at least 37 tenders in the most current wave, which happened in 2017.

In general, developers choose freehold properties for their en-bloc projects because the Government Land Sales (GLS) no longer releases freehold plots to developers, making buying over old freehold properties through collective sales the only way to reclaim these lands. Nonetheless, these are win-win scenarios for developers looking to purchase freehold plots and property owners looking to profit from these higher-priced collective sales.

Is En-bloc Potential an Important Factor to Consider When Buying a Home?

Yes and no, because it all relies on the purchasers' objectives and preferences. Furthermore, with the 2018 cooling measure imposing a 30% Additional Buyer's Stamp Duty (ABSD) on developers purchasing residential properties, en-bloc may be more difficult to find.

Buyers should perform extensive study and analysis before embarking on a buying frenzy in Singapore's ever-changing property market. When in doubt, contact our experts to benefit from their expertise.

Should I Purchase a Freehold Condominium with En-bloc Potential?

While the prospect of profit from an en-bloc sale is appealing, it should not be the primary motivator for purchasing a freehold apartment. Why not consider the objectives for purchasing a house and the diverse lifestyles of the occupants before making the purchase? Such an endeavour can frequently reveal viable options that were previously unconsidered.

List of Freehold Condos that we believe have En-bloc Potential

If freehold condos with en-bloc potential are still at the top of your shopping list, here are some possibilities we believe have good En-bloc potential: