I've been here 9 years and property
prices here still confuse me.
But if i'd bought a property in '96 for a million i'd probably be down 300K now which is about what i've paid in rent in the same period. That is somewhat extreme because i arrived at the peak.
But i throw what i think into the pool for discussion based on what i've read above. I'm against investing in 99 year lease properties.
The value of property relates to
1: what will you pay for it
2: what will someone else pay for it
3: how many empty properties are there
4: how deep are the pockects of the people holding those empty properties
5:what can you rent a property for against what you can buy it for
6: What interest rates are
7: How confident do you feel that what you buy today will be worth more tomorrow
8 Lots of market stuff you have no control over - but as an example someone who may have chosen to invest in Singapore as a safe haven in the past may now feel he has acceptable risk and better financial returns in China or Indonesia or Malaysia.
There are other issues like do you want to live in it and have a home of your own ( i've moved 5 times in 9 years and i hate that)
I am currently paying my lowest rent in 9 years. I used to be way out on the east coast for 3K and now i'm in town bigger and better for 2K
In my bulding there are a lot of empty apartments.
When i'm renting i have a choice of numerous new apartments at reasonable prices or even more old apartments at very low prices.
If i'm buying i'd pay a small premium for that "new apartment" feel so will most people i think.
I think a new apartment will go into rental decline between 5 -15 years max depending on location desirability etc. Once the rentals are down the investors want to put their money in more profitable places.
If its on a 99 year lease once its 30 years old you cant get a mortgage.
Singapore has only existed for 40 years so nobody really knows what happens to "old" leashold properties.
On my logic 0 - 10 years it could hold its value, after that its in decline.
If the market stays bad it could be in decline from day 1. If you are selling to me, every day off the lease is a day i'll want from your pocket and not mine.
If you have deep pockets and you hold freehold eventually the market always comes back.
Not so for leasehold - if you wait long enough you dont own anything but your furniture..