2 topics of interest on private property if u can shed some light on 1. I've been told that buyers like new launches, hence they're willing to pay a premium over comparable properties in the same vicinity - what's a fair premium size or %? - will older properties in the same vicinity be able to capture part of this premium in 3-5yrs? 2. for small size non-condo (non-mixed residential/commercial) freehold type developments where transactions are few and far between, how do you estimate the fair value of the property? - reason I'm asking is b'cus valuers are providing mkt values that are no different than that b4 covid days...how can that be? Would appreciate your insights on this, thanks
Good location flats depreciate slower than poorly located ones, in fact some good location old flats are still transacting at their highest prices now. This is likely also due to the low supply of new flats in those central mature estates, people wanting to live in those estates under a certain budget may have no choice but to buy an older flat. Trifecta of property: Location, Size, Age/Type. Properties with at least two of these factors will retain its value better than the ones without.
Great video, have been a fan. Just a side note, would you be able to replot the scatter plot, controlling for confounders such as locations? This will address your reason 1, i.e. "our observations are not location - specific". Thanks!
Hey Lewis! Thanks for sharing your thoughts, we'll look more into this! The issue is that we can't say the same for non-mature estates like Punggol and Sengkang due to how old it is. That's why the study is flawed here, the older flats are geared towards older estates.
Hi.. we are looking to purchase an old flat at Marine Parade. Point block, seaview. But the flat was built in the 70s. Mind sharing your thoughts? Will we have difficulties of selling in the future when our kids grown up? Btw, We're in our early 40s.
Older flats especially those build in the late 90’s are also larger than current newer tiny Ones. More LIVING SPACE for couples and families with young children.
Good analysis to dispel this myth. Not many people input CPF into the equation. Using actuary assumptions, you will see that it will appreciate over the long term with average money supply inflation.
Hi Stacked Homes, I loved your videos. I have a question to ask. I currently own an old HDB Flat at Commonwealth Drive. Are there any en-bloc potential based on your expertise?
En-bloc so called SERS is unlikely to be offered to the sheer number of flats reaching 60+ lease left. The sheer number of flats built during the period from 1980 to 1990, with an added 50,000 over newer ones reaching MOP after 2022, will leave older flats depreciating. Do not be misled by the mention of location, that these older flats will even 'appreciate'. Now, if your flat reaching close to 60yr of lease left, to quickly plan your 'escape route'!
Bala curve only zoom down in the last 30-40 yrs, we don’t have much data of such flat now but those who buy in now will feel the hit a decade later. You enjoy the size, the life style but you need to pay for it.
If retirees were to buy old hdb that have 40 years lease and then passed away in say 10 or 20 years time, and their children already owned their own HDB flats or condo units, what will happen to the old hdb flat? Sell back to HDB or total loss, since they can't be sold and their children can't inherit them?
IMO, even if I’m a 70years old grandpa, I wouldn’t wanna buy a property with 40yrs lease left on it. I rather get a newer one and I still can pass it down to my children. Even if they already have their own hdb, they could sell mine away and keep the money. A classmate of mine bought a mansionette for over a million. In my head I’m saying, “what a idiot” lol
Thanks for sharing your thoughts on this! I think the idea here is that an older property allows one to keep more cash, and it's also less of a burden in terms of monthly interest payments 👌 Of course if this is not an issue, there's nothing wrong at all in buying a new flat and eventually passing it on to your children!
The depreciation should still be there, it's just not appreciating as much as a freehold equivalent - assuming they're both priced at value when comparing 👌 At some point, inflation wouldn't really save the property e.g. 10 years lease remaining.
This is a very misleading video that old HDB don't depreciation. Gone are the early days when such statement hold true to a certain extend but no longer. From 1980 to 1995, flats like these will reach lease decay of 60 yrs or less from 2023 to 2030 and beyond. What is so alarming is, the bulk of hdb were built during those period which result in over 550,000 hdb of all sorts reaching lease decay of less 60yrs. Becos of this, the rate of depreciate will nose dive unless the gov comes out with a viable solution to 'rescue' these sheer bulk of hdb owners, which i doubt.
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2 topics of interest on private property if u can shed some light on
1. I've been told that buyers like new launches, hence they're willing to pay a premium over comparable properties in the same vicinity
- what's a fair premium size or %?
- will older properties in the same vicinity be able to capture part of this premium in 3-5yrs?
2. for small size non-condo (non-mixed residential/commercial) freehold type developments where transactions are few and far between, how do you estimate the fair value of the property?
- reason I'm asking is b'cus valuers are providing mkt values that are no different than that b4 covid days...how can that be?
Would appreciate your insights on this, thanks
Good location flats depreciate slower than poorly located ones, in fact some good location old flats are still transacting at their highest prices now. This is likely also due to the low supply of new flats in those central mature estates, people wanting to live in those estates under a certain budget may have no choice but to buy an older flat. Trifecta of property: Location, Size, Age/Type. Properties with at least two of these factors will retain its value better than the ones without.
Thanks for sharing your thoughts!
Great video, have been a fan. Just a side note, would you be able to replot the scatter plot, controlling for confounders such as locations? This will address your reason 1, i.e. "our observations are not location - specific". Thanks!
Hey Lewis! Thanks for sharing your thoughts, we'll look more into this! The issue is that we can't say the same for non-mature estates like Punggol and Sengkang due to how old it is. That's why the study is flawed here, the older flats are geared towards older estates.
Hi.. we are looking to purchase an old flat at Marine Parade. Point block, seaview. But the flat was built in the 70s. Mind sharing your thoughts? Will we have difficulties of selling in the future when our kids grown up? Btw, We're in our early 40s.
but I think 2021 is special year, which the demand is high, so caused the buyer willing to pay more.
Thanks! We'll look into pre-covid times too to see if there's this relationship
Older flats especially those build in the late 90’s are also larger than current newer tiny Ones. More LIVING SPACE for couples and families with young children.
Thanks for sharing!
How to calculate the value from the percentage of freehold value? Assuming we see the property asking at 1M.
Good analysis to dispel this myth. Not many people input CPF into the equation. Using actuary assumptions, you will see that it will appreciate over the long term with average money supply inflation.
Thanks for sharing your thoughts on this!
Hi Stacked Homes, I loved your videos. I have a question to ask. I currently own an old HDB Flat at Commonwealth Drive. Are there any en-bloc potential based on your expertise?
Hey Alfred! We won't be able to say for sure I'm afraid!
En-bloc so called SERS is unlikely to be offered to the sheer number of flats reaching 60+ lease left. The sheer number of flats built during the period from 1980 to 1990, with an added 50,000 over newer ones reaching MOP after 2022, will leave older flats depreciating. Do not be misled by the mention of location, that these older flats will even 'appreciate'.
Now, if your flat reaching close to 60yr of lease left, to quickly plan your 'escape route'!
I think it is not that matured location old flats retain their selling price, rather it is the newer non matured estate flat prices have caught up.
Bala curve only zoom down in the last 30-40 yrs, we don’t have much data of such flat now but those who buy in now will feel the hit a decade later. You enjoy the size, the life style but you need to pay for it.
Appreciate the insight! Definitely something to consider for the future. 😊
What about the lease depreciation rate of leasehold condos?
Something we'll look into!
Thanks for the great video. :)
Thank you for watching! 😁
Of course, because there is inflation… and how much it costs to rent a similar property
it's a good sharing!
Thanks for visiting!
If retirees were to buy old hdb that have 40 years lease and then passed away in say 10 or 20 years time, and their children already owned their own HDB flats or condo units, what will happen to the old hdb flat? Sell back to HDB or total loss, since they can't be sold and their children can't inherit them?
What about Boon Tiong road HDB flat?
may need to look beyond just 2021 and compare years before covid as that is likely to revert to after covid
Thanks for your feedback! Will look into it!
i think old flat hold their value due to location, quite a number use their flat as home office or storeroom for their business
Location is quite a big factor, we'll see how we can improve our analysis for future studies :)
@@StackedHomes your analysis is spot on,my observation is about my new neighbours upstairs who use it as their office/storeroom aka business
IMO, even if I’m a 70years old grandpa,
I wouldn’t wanna buy a property with 40yrs lease left on it.
I rather get a newer one and I still can pass it down to my children. Even if they already have their own hdb, they could sell mine away and keep the money.
A classmate of mine bought a mansionette for over a million. In my head I’m saying, “what a idiot” lol
Thanks for sharing your thoughts on this! I think the idea here is that an older property allows one to keep more cash, and it's also less of a burden in terms of monthly interest payments 👌 Of course if this is not an issue, there's nothing wrong at all in buying a new flat and eventually passing it on to your children!
i dont think you can pass on HDB to your kids
@@fool1124 You can, if not who will sell?
Factor in inflation and depreciation seems negligible
The depreciation should still be there, it's just not appreciating as much as a freehold equivalent - assuming they're both priced at value when comparing 👌 At some point, inflation wouldn't really save the property e.g. 10 years lease remaining.
Would 2020 and 2021 be considered outliers, since it’s accentuated by covid 🧐
We'll look into the data prior to 2020 to see if this is truly a 2021 phenomena 👌
This is a very misleading video that old HDB don't depreciation. Gone are the early days when such statement hold true to a certain extend but no longer. From 1980 to 1995, flats like these will reach lease decay of 60 yrs or less from 2023 to 2030 and beyond. What is so alarming is, the bulk of hdb were built during those period which result in over 550,000 hdb of all sorts reaching lease decay of less 60yrs. Becos of this, the rate of depreciate will nose dive unless the gov comes out with a viable solution to 'rescue' these sheer bulk of hdb owners, which i doubt.
Thank you for sharing your insights, Keng! 😊
Self promotion on Reddit, sick.
Hey! Not sure what you mean by self-promotion there, but it sure wasn't us!