Food for thought: Is it good to buy a condominium?

[Cecil Lee]

Dear all,
1. This paper and several others that follow takes into account a working life cycle of typical Singapore families.
2. This paper looks at `Strategic Planning to safe guard one's old age or retirement.'
Note: This paper DOES NOT TAKE into consideration FENG SHUI.
3. Introduction
3.1 10 years ago, in Singapore, we hear of 95 percent of Singapore population staying in Public housing.
3.2 I do not exactly have the correct statistics but overall, this implies that only 5 percent of Singaporeans life in either condominums + private residential properties such as terrace houses, sem-detached or bungalows (purely landed property).
3.3 Today, the figure is something like 85 percent of Singaporeans live in Public Housing while 15 percent now live in either condominums and private housing.
This figure can be quite alarming! Especially since, to-date, there are more than 800 condominums sprouting on this tiny island.
4. My fears are:-
Let's say that you are staying in a condominium with 500 units today.
If one is generally simply just a "worker" or salaried worker, there will come a time when one has to retire.
So, what's so wrong with retiring?
4.1 Many Singaporeans would still be servicing their loan on their beloved condominium even close to retirement age or later. (Unless one is lucky to have made a substantial sum selling off e.g. a previous public housing). Or if one had amassed sufficient sums to pay off the loan.
4.2 Even so, the question here is can one afford paying the monthly maintenance plus other daily essentials?
Case Study 1:-
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Usually, on average a condominum monthly maintenace fee can come to S$250 to $350 depending on the units and size of your property.
Assuming that there are two persons living in the condo, the retiree and his wife.
There are also the unexpected costs of health care (as one grows older) and also daily basic maintenance.
The situation may arise that out of 500 existing residents - and if all of them age appromiately around the same time, there can be quite a substantial amount of `first' residents that may be forced to downgrade to smaller homes.
Both to recoup money (since they have already retired) or since their purchaing power is down, may have no choice but to do so.
In fact, even today, during my continous audits, I have seen this happen. Many young couples purchase even resale Government 5 room type of apartment from retirees who prefer to downgrade.
Therefore, if one between 30 years to 40 years old may 20 to 30 years down the road, find many of their neighbours moving out for this reason.
In the next article, we will look at more case studies and how to protect your interests - i.e. especially look out when one purchase a condominum.
For example, some condominums although afford privacy, pretty much looks like any other public housing. Such as poor view - apartments in close proximity `looking at each other'.
Since, more and more condominums are sprouting around and the price per sq feet for new ones are very attractive i.e. $400 per sq foot (psf) or more. Would seem to be more affordable, if one had inadvertenly purchased a `rotten apple'.
Without Feng Shui, this is as good as entrapping one' self in a rout. And perhaps forced to sell a truly a loss.
More about this later....
Warmest Regards,
Cecil
PS. Presently, Singapore is a country with a high majority of salaried workers and fewer enterpreneurs. Perhaps, one day, this may change slightly.

[Cecil Lee]

As a follow-up of the earlier article, my chief concern is that if one is a `salaried worker' and should one day, this salaried worker goes into retirement (voluntary or otherwise), one major consideration is to how to `continue' living without any more steady income.
Especially since, living in a condominium already has fixed costs of not less than say S$250.
Even more so, if one is `entrapped' unable to sell one's condominum due to some of these major considerations:-
1. It is a 99-year lease. And, usually the lease could easily go down to 75 to 60 years left. Many banks would not loan potential buyers - even if they want to buy it if the property falls below say 60 years lease left.
2. With the glut of condominiums both new and old at competitive prices, many buyers may instead opt for totally new - and wait for TOP.
3. In addition, if one has invested in a condominum that looks much like any public housing, it is hard put for them to sell these units or sell them at a reasonable price. To recoup their savings.
4. I have visited many condominums and in my opinion, some of them other then their `skin' or cosmetic look - other than private grounds and security guard, look like any other public housing.
Note: I have nothing against public or private housing. But rather base my opinion on future re-coop of capital investment - to sustain a person, his wife thru their old age. Not withstanding that one or more may have to incur major surgery or operation - using their own funds (not considering public or government subsidy).
In my opinion, some examples not worth considering investing they are:-
Windermere Condominium
Address: 20, 22, 26-32 Choa Chu Kang Street 64
Developer: ST Technologies Properties Pte Ltd
Tenure: 99 years TOP: 2002
Total of 395 units
(MRT is not exactly near) Current price per sq feet of larger unit is approximately S$330 for units of 2,700 sq feet. This low price reflects the market sentiments of such high rise development.
Woodsvale condominum
Location: 5 to 11 & 15 Woodlands Drive 72
Developer: Capitaland, Singapore
Tenure: 99 years
TOP: 2001
Total of 492 units
Poor price per square foot between S$380 to only $422 psf.
Hougang Green Condominum


Location:


5 Buangkok Green / Hougang Street 51


Developer: Hiap Hoe Group


Tenure: 99 years


Top: 1988 with 99 units


This development is almost undistinguishable from nearby public housing.

Can you spot more examples in the area where you live?
It is important to safe-guard the value of your property especially if they are of 99 year lease properties. More importantly, your house should be marketable at anytime - should one ever need cash funds for any emergency - not withstanding personal savings. How fast can your property be converted to cash in reation to capital gains instead of loss.
I am not saying that one should totally forgo condos with 99 year leases. But rather choose wisely.
Based on commonsense approach on marketability:-
1. Convience to good transport e.g. MRT
2. If they are e.g. low height e.g. 4 floors can be considered
3. disadvantages if these apartments seem to `look into' a neighbour's unit.
Happy Hunting! And erh.. Cavet Emptor!
Warmest Regards,
Cecil

[Cecil Lee]

More `unexciting' condominums include:-
Chuan Park Condo
Location: 240, 242, 244, 248 and 250 Lorong Chuan
Developer: Far East Organisation
Tenure: 99 years
TOP: around 1985
Designed much like HUDC / HDB old generation point blocks
Re-sale Price per square foot on average S$370 to S$390

[Cecil Lee]

Location: 1,3,5,7 & 9 Jalan Membina
(Next to Tiong Bahru Plaza/Tiong Bahru MRT)
Developer: Winwell Investment Pte Ltd - Wing Tai
Tenure: 99 years
TOP: 1995
Although this condo is 99 years old and highrise with 412 units, because of its excellent location (across the street from Tiong Bahru MRT) - it will still command a good price per Sq foot of between $600 to $790 psf. Although a high price, but before the lease goes to 60 years, in my opinion, still a good investment for now.
Current owners can easily sell it off in the future, should they ever need $$$.
Besides these, 99 year old condos that are 4 storey or less height, are worth looking into. As the attraction is the low height - "kampong" style living. Compared to the common - stale high rise apartments.
Under Feng Shui, it has good Shapes and Form since each block have mimimal missing corner(s).

 

Photos of Hougang Green:

[Cecil Lee]

Yet another e-bike which was charging that caught fire at Buangkok Green condo unit...

[Cecil Lee]

On 23 January 2023 Windermere EC