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Wednesday July 27, 2:17 AM
Singapore ChannelNewsAsia

Prices of Older Leasehold Homes Expected To Rise 10%

SINGAPORE : Property agents expect prices of private homes with less than 60 years' lease remaining to surge over the next few months.

They said prices of such landed properties would likely go up by 10 per cent, while apartments by about 5 per cent.

The government relaxed its rules on home financing for older leasehold properties last week, allowing home buyers to use their CPF to purchase them.

There has been renewed interest in older leasehold properties since the government relaxed its rules on home financing.

So now, owners of such properties are holding firm on their selling price.

Some are even planning to renovate their homes in order to attract a higher value.

Currently, such landed properties are priced at just a third of new landed homes, while private apartments fetch around half the price of new units.

Property agents said potential buyers would now find these properties attractive.

Mohamed Ismail, CEO of PropNex, said: "This is like a sudden new lease of life given to properties that are less than 60 years. In the past, most of them will never want to put their money there because from the investment angle, in the long term, such properties were depreciating in value."

He said there was more interests lately especially among older people because of the new policy and fewer restrictions in terms of the usage of CPF.

At the moment, prices of such properties have yet to rise sharply.

This is because many home buyers are still unclear about the new policy - and how it will affect them.

Banks have also not given clear guidelines as to how buyers can finance their loans for such properties.

Still property agents said they were confident the situation would improve - with prices rising by as much as 10 per cent over the next few months.

But with ample supply of brand new private residential developments and at competitive prices, some property agents said home buyers would still prefer to pick their choice property from the primary market.

Moreover, most home buyers would prefer to own a brand new property with better design and at good locations.

Still, market watchers expect the new policy will have a dampening effect on leasehold en-bloc sales - which have been generating much interest this year.

This is because as property prices surge, there will be less incentive for both the owners and developers to pursue collective sales. - CNA/de