What makes a condo valuable?

[Watwheels]

3 words: Location, Location, Location.

[Icedbs]

i understand but what i dont understand why are new 99LH condos in OCR that are relative near to MRT more expensive than FH condo in equally good location?

 

i can only guess its due to age.

 

To answer this question, we need to look at people's mentality when it comes to investment.

 

Look at the stock market. HP, a nearly 100 year old establishment with many years of financial profits and proven products is now worth roughly 50 billion in market cap. Facebook, on the other hand, has not even proven a history of revenue profit, but is demanding the same 50 billion in market cap when it goes IPO next month.

 

Why is investors paying so much for Facebook when most don't even know if it can last the next 10 years?

 

The answer is sentiments. Property like stocks, thrives on sentiments and hence often not rational.

 

I often look at developers like the fund managers. Having deep pockets, they can drive up prices, create sentiments and news. The fund managers, are the same...having deep pockets, they can move the market and driving the herds to buy that stock. Developers have agents to help them spread the news. The fund managers have analyst to help them do the same.

 

So it goes back to you as the investor. Are you going to buy based on sentiments, because everyone is saying sure will make money when TOP? Or are you going to evaluate the correct price and fundamentals before you make your purchase? And whether you are buying to rent or own stay does influence that decision as well.

Edited April 26, 2012 by Icedbs

[Mustank]

but if, in a few months time, we start to see all the caveats lodged, then how do we explain this phenomenon?

 

my guess is that these buyers are real buyers...hence this all puzzles me

 

Idle cpf and Money

people work and earn money. they want their cpf and money to grow. inflation is 5%. cpf rate and bank interest is less than 5%. somemore cpf wait long long than can taste the fruit. so must as well ultilise the cpf and idle money in the bank to buy house? peoblem is there are quite a number of people who has a substaintial amount of cash and cpf just like you and me. all of us dont like to see them idling around in the account......

 

Limited supply + demand from tenants

land is in short supply. so people buy house and rent to foreigners who are coming in 25,000 per yr intake. even if dont rent out, still can enjoy a spanking new house.

 

 

[Wt_know]

TOP in 1993 ... the site should be >20 years old already. in-n-out + design must be very outdated already.

if location is sibei good then will attract buyer. the only good point is FREEHOLD

 

Look at Bullion Park, freehold, huge site area, full facilities, 3 bus stops from YCK mrt...but barely touch 1000psf

Edited April 26, 2012 by Wt_know

[Rubberpad]

TOP in 1993 ?????

if location is sibei good ok la ... but it's not

 

yes...old but FH.

 

i am using this as a comparison with brand new 99LH condos in OCR that are also like 3 bus stops away from mrt.

[Jrage]

Factor 1 : Buyers of pte condo now falls into 2 grp.

1) naive investors who are buying to sell in 4 yrs time or rent out of some "unexpected rental" yield..... these grp will look for newly launch, and generally smaller units.

>> rental yield, that day i met with a stupid agent.. told me a particle unit could be rent out for 3.5k.. the fact is another bigger unit in the same dev is only just rented for 3k.. i dun know how she got the cheek to say 3.5k.

>> when i was at bartley resident, the agent told me that the 2 bedrm can be rent out for 4.5k.. hmm... seriously overstated.

2) buyer for own stay. These grp of buyer generally prefer newer condo

 

Factor 2: Low transactions on older condo.

1) monkey see , monkey do.. when alot of ppl is buying into the estate.. more ppl will buy.

2) low transaction , means valuation stay flat

Alot of older condo ,esp those at CCR, have very low transaction because owner are staying. Even if they rent out, they dun really want to sell unless they dont have holding power or other better investment alternative.

3) very old FH are likely to enbloc... Buyers will stay way from them because of the 4 yr stamp fees.. they may be force to sell to pay stamp fee if it enbloc.

[Rubberpad]

OK, help me out here.

 

I am looking at 2 condos, Soleil at Sinaran and The Peak@Balmeg - 3 bedder for own stay.

 

But of course i hope to sell it at a profit in the future. Which would be a wiser choice?

 

I can't decide.

 

[Soya]

Idle cpf and Money

people work and earn money. they want their cpf and money to grow. inflation is 5%. cpf rate and bank interest is less than 5%. somemore cpf wait long long than can taste the fruit. so must as well ultilise the cpf and idle money in the bank to buy house? peoblem is there are quite a number of people who has a substaintial amount of cash and cpf just like you and me. all of us dont like to see them idling around in the account......

 

Limited supply + demand from tenants

land is in short supply. so people buy house and rent to foreigners who are coming in 25,000 per yr intake. even if dont rent out, still can enjoy a spanking new house.

 

 

cpf i can collect 2.5% and 4% for the 1st 60k from ah gong. cash i collect 0.001% interest from bank. i'd rather use cash to pay as much as possible then touch my cpf.

[Mustank]

cpf i can collect 2.5% and 4% for the 1st 60k from ah gong. cash i collect 0.001% interest from bank. i'd rather use cash to pay as much as possible then touch my cpf.

 

totally agree!!!!

[Stratovarius]

When I went to see The Luma at Grange Road, the developer was asking for $3,000psf and claimed that most units sold, left a few only.

I walked away since I did not like the external facade design and $3000psf was IMHO too high for the Grange/Devonshire locale, at that time.

 

Now, about 3 years later, I know better.

They couldn't sell ... only managed 18 units, out of 35 (or wad it 55?).

So my gut feeling was right after all.

 

They actually lied low for a while and are now re-launching ... after 3 fcuking years!!!

Who is the developer? According to my condo-guru friend, most developer are able to break even if they manage to sell one third of the total apartments. If the market is not good, they will withhold the sales and relaunch it when the market demands it. This will prevent the value of the apartments from going south.

 

Till now, I'm still quite puzzled why so many ppl are buying condos? Some of my friends with combined income of slightly over 10k bought or are looking for those mass market condo where they are surrounded by HDB flats. Are they really value for $$$?

[Icedbs]

OK, help me out here.

 

I am looking at 2 condos, Soleil at Sinaran and The Peak@Balmeg - 3 bedder for own stay.

 

But of course i hope to sell it at a profit in the future. Which would be a wiser choice?

 

I can't decide.

 

Soleil.

 

But if own stay, many other factors to consider. The views, privacy, distance from work, etc.....not just prices.

[Asd78]

yes...old but FH.

 

i am using this as a comparison with brand new 99LH condos in OCR that are also like 3 bus stops away from mrt.

 

 

if the FH hse u have is a landed then that is another matter.....for landed hse, FH is a true gauge of its worth because the next buyer can redevelop the hse when he takes over the FH title but for a 30, 40 yrs old condo, you cant redevelop the condo urself...you can only hope for en-bloc and not all enbloc are successful or the price you want....so location, tenure, size of condo land, plot, height ratio is still the best overall reference....

[Asd78]

cpf i can collect 2.5% and 4% for the 1st 60k from ah gong. cash i collect 0.001% interest from bank. i'd rather use cash to pay as much as possible then touch my cpf.

 

 

u can use cash for a lot of things...makan, holiday, emergency use, buy car..watever.....cpf u cant draw out as and when u want....

[Rubberpad]

Soleil.

 

But if own stay, many other factors to consider. The views, privacy, distance from work, etc.....not just prices.

 

what is your reason?

 

actually i am leaning towards Peak@Balmeg for its potential

[Jrage]

OK, help me out here.

 

I am looking at 2 condos, Soleil at Sinaran and The Peak@Balmeg - 3 bedder for own stay.

But of course i hope to sell it at a profit in the future. Which would be a wiser choice?

I can't decide.

Both very risky..

1) there is alot new development in that area, so rental may be a problem soon.

2) rental yield low, ocr give you a better yield

3) new development vs old development , price difference too great.. i see some older development going for 1300psf only. the 2 you mention is going for 1800-2k psf.. i find the diff is too big.. given that all are freehold.

I am looking at mansion@evelyn now.. but development quite old :(

Edited April 26, 2012 by Jrage

[Asd78]

dun tok c--k ley, you mean silversea right, seastrand is relatively cheap

 

 

silversea if u got any selling for $1000psf, tell me I buy from you...heck...anyone will buy from u if you sell them $1100 psf...

[Asd78]

Both very risky..

1) there is alot new development in that area, so rental may be a problem soon.

2) rental yield low, ocr give you a better yield

3) new development vs old development , price difference too great.. i see some older development going for 1300psf only. the 2 you mention is going for 1800-2k psf.. i find the diff is too big.. given that all are freehold.

I am looking at mansion@evelyn now.. but development quite old :(

 

 

Look at Viva, FH but slightly further away from Mrt. PSF ard $1800 onwards...expected top end of the yr...

[Windwaver]

Sentiment for now