• Joshua Loo

Are Living in Residential Landed Properties Worth It?

Updated: Sep 6



If the rich in Singapore have one thing in common, it is that they love their landed houses. After all, how else will you be able to showcase your opulent lifestyle? Jokes aside, there is its fair share of advantages to owning landed property.


As with the advantages, however, comes with setbacks that typically affect these kinds of properties.


If you have already decided to invest in a landed property and looking for a guide to buying landed property in Singapore, read the following article.


Guide to Rebuilding Landed Properties for Private Home Owners


It covers the entire process of investing in a landed property in Singapore, including finding the right piece of land for rebuilding.


Advantages


Stable Asset Growth


Based on past sales transactions of landed homes, there is an approximate capital appreciation of close to 12% per year.


This beats most investment vehicles, which typically gravitate around 3-7% for low-risk ones. Furthermore, the Real estate does not have to be overcomplicated with indices and markers as seen from the stock market. All it takes simply are a basic understanding of supply, land prices, and construction costs.


The following points mentioned below also goes back to how landed properties help to increase your asset value in a stable manner.



Less Prone to Speculation




Although real estate tends to be heavily speculative, these are usually in regards to new-launch condos due to the mindset of its purchasers, which are lured by the promises of good capital appreciation and rental potential.


This does not mean it is not true, because it is. As with all investments, however, it is very dangerous to put money in what you don’t understand thoroughly. The lack of information is what causes investors to purchase condos oversaturated with shoebox apartments, which eventually causes a drop in their capital investment from the lack of incoming cash flow.


People that opt to place their money in landed properties optimally aim for good value purchases. Buying an undervalued land is definitely a no brainer, but it’s usually secured very quickly be real estate developers unless you are actively knocking on doors daily to get such information.


If you are interested in finding a suitable landed property at competitive prices, feel free to contact me.

Exclusivity


The supply of landed properties is falling in Singapore fast. The Telok Kurau area is has been rapidly losing its status as a landed residential community as more real estate developers are coming in to redevelop the land. Just past Siglap Canal, however, this land is protected with as landed zoning.


Buying a great landed property in this area will surely make it very appealing for real estate developers to pay good money for! If you are keener to reside in one for a very long time, go for these protected landed zones. I am sure that in time, these will surely appreciate greatly.




Talking about this point reminded me of previous articles that I had written before, which are related to Sentosa Cove properties, which are highly exclusive. In my opinion, I feel that Sentosa Cove properties are a pretty good buy for landed properties. Its prices have fallen a long way from its previous highs, which are contributed by the pre-2010 purchases, which are largely speculative.


Sentosa Cove property prices have since stabilized since 2015 as a result of cooling measures, and this shows that the owners of these properties will have good holding power for years to come.



The “elephant in the room” situation shown in the chart is also in regards to how Sentosa leasehold prices are in comparison to East Coast properties. At a glance, it might seem that the average PSF is too high. It is important to note that all Sentosa Cove properties have a land tenure of 99 years, which makes for less competition to “freehold” properties on Sentosa, which does not exist.


This is similar to condos around the Bugis area, which do not have freehold residential properties, yet demand a high cost.


Read my articles on Sentosa Cove here


Review: 12 Treasure Island, Singapore

Are Sentosa Cove Properties a Poor Buy?


Privacy


Buying a residential, landed real estate also means that you own the land which your house also is sitting on. This will also mean that you are given that privacy. By having a good distance as setback, passersby will be unable to peek into your living spaces if they were to walk past. Living in a residential landed estate also means that there will also be a reduced volume of people within the area generally, at any given point in time.


This is due to lower density built-up in the area, which is contributed by strata-living apartment stacks and commercial skyscrapers in the Core Central Region of Singapore.


This makes for a safer community, as you are familiar with all the residents in the area.

Disadvantages


Low Volume of Transactions



Landed properties are the lowest quantity in comparison to other housing types. This makes for a low transaction volume in correlation to its quantity.


Finding a landed property that you absolutely adore is one piece of the puzzle but financially, does this purchase make sense? The low transaction volume makes it difficult for valuers to accurately price the property for what it is worth.

Inconvenience (Lack of Amenities)


I feel that this point is rather subjective, but I will leave it here just in case you might find this to be a pain point. In the past, transportation out of residential enclaves is a big headache and walking to the nearest MRT station can either be more than 15 minutes away or longer. This was the days when Singapore’s MRT system pales in comparison to what it is today.


Besides, most landed property owners are usually moving within their particular estate and will be used to the amenities offered in the area. Someone who is living in the Bukit Timah area for years will not suddenly make the jump into living within the East Coast.


Singapore is so well connected via public transportation, and even if the location that you are looking at is not, you can significantly get good pricing as compared to its counterparts.


However, even buying groceries and other amenities is just a phone call away. I have recently seen an advertisement on Facebook in regards to on-call barbers!


How crazy is that?

Rebuilding Your Dream Home


With wealth, it is not unusual to be interested in building your dream home. After all, a man’s home is his castle. What better way to be reminded of your career successes by relaxing in the architectural masterpiece that you call home?


However, there are many occurrences that I have personally encountered of overzealous buyers seemingly buying an undervalued land and were not well informed on its land encumbrances. Coupled with not finding the right rebuilders to provide them with an attractive quote, this makes for an exorbitant purchase.


So not only did the total bill of the property is far above the cost of new rebuilt properties, but the encumbrances might affect the overall design of your dream home.


This is the reason why it is very important to conduct your purchase through a trusted real estate salesperson, that has a fine understanding of landed properties in Singapore.


I will cover this in another article on how can you go about evaluating a piece of land if it is truly worth your investment.


Summary


Thanks for reading my article on landed residential properties. Truth be told, the advantages of living in a residential enclave are pretty obvious and its financial and lifestyle benefits are amazing. However, this comes at a steep cost which makes it out of reach for the average Singaporean family.


Finding the right land to rebuild your home is a long and extensive procedure. If you are already combing through PropertyGuru for a suitable piece of land for rebuilding and will like my opinions on the approximate Gross Floor Area after taking into account URA’s guidelines, I am more than happy to assist.


Call/WhatsApp me (Joshua) at +6596329840 or email all enquiries at estatemagnates@gmail.com.

The views, thoughts, and opinions expressed in the text belong solely to the author, and not necessarily to the author’s employer, organization, committee, or other group or individual. The author does not accept any responsibility whatsoever for any harm or loss arising from accessing or relying on information contained in this blog post.

 

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Real estate advice on the internet can be very general and might not be specifically applicable to your current situation. This is especially worrying due to the huge costs involved in every property investment.


Find out if the current direction you are heading towards is the right choice by making an appointment with our representatives.

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