Over the next 10 years, I expect Freehold land prices to appreciate faster than market. To me, market means the overall housing market, including private condos, terraces, semi-detached, bungalows, and public housing. My predicted appreciation for each property asset class in the next 10 years are as follows:
1. Overall housing market: 4% p.a.
2. HDB, if you bought from the govt at subsidized rates: 6% p.a.
3. HDB, if you bought from the resale market without subsidies: 4% p.a.
4. ECs, if you bought from the govt: 5% p.a.
5. 99yr Condos: 2% p.a.
6. Freehold condos: 4% p.a. Govt land sales are only 99 yrs. Rare factor in play.
7. FH terraces: 3% p.a. Land values have already risen at a premium to FH condos' strata on a psf basis. Rarity factored in.
8. FH semi-detached: 4% p.a. Land values is also at a premium to FH condos' strata.
9. FH bungalows: 5% p.a.
Landed or condos? I'd rather buy a condo in a good location, near good schools, MRT, amenities like cafes, restaurants, shopping centres than a house with no amenities.
GCB land is going for around SGD1300 - 1400 psf. I believe it will appreciate by 5% p.a. for the next 10 years.
Prime bungalow land in KL is going for RM 500 - 600 psf for the same size, i.e. > 24k sf. Singapore's land prices is 6.4x of KL's. I believe the gap will eventually narrow to 3.5x, which is the income gap between Singapore and KL. If I assume prime bungalow land will be SGD2,200 psf in 2024, and the gap will narrow to 3.5x by then, KL's land will be RM1,635 psf. This translates to 11.5% p.a. This price appreciation will definitely beat Malaysia or Singapore stocks, or any other type of property asset class.
For Leisure Farm in Iskandar, if you assume that by 2024, it will be 30% cheaper than KL's because land will still be more abundant in Iskandar even by 2024, and income in Iskandar will still lag behind KL, then it will eventually settle at RM1,258 psf. It is currently at RM160 psf now for 24,000 sf. This translates into 22.9% per annum of return unleveraged!
Even if I assume that Leisure Farm's discount to prime KL will be 50%, it will still reach RM818 psf by 2024. That means
1. Overall housing market: 4% p.a.
2. HDB, if you bought from the govt at subsidized rates: 6% p.a.
3. HDB, if you bought from the resale market without subsidies: 4% p.a.
4. ECs, if you bought from the govt: 5% p.a.
5. 99yr Condos: 2% p.a.
6. Freehold condos: 4% p.a. Govt land sales are only 99 yrs. Rare factor in play.
7. FH terraces: 3% p.a. Land values have already risen at a premium to FH condos' strata on a psf basis. Rarity factored in.
8. FH semi-detached: 4% p.a. Land values is also at a premium to FH condos' strata.
9. FH bungalows: 5% p.a.
Landed or condos? I'd rather buy a condo in a good location, near good schools, MRT, amenities like cafes, restaurants, shopping centres than a house with no amenities.
GCB land is going for around SGD1300 - 1400 psf. I believe it will appreciate by 5% p.a. for the next 10 years.
Prime bungalow land in KL is going for RM 500 - 600 psf for the same size, i.e. > 24k sf. Singapore's land prices is 6.4x of KL's. I believe the gap will eventually narrow to 3.5x, which is the income gap between Singapore and KL. If I assume prime bungalow land will be SGD2,200 psf in 2024, and the gap will narrow to 3.5x by then, KL's land will be RM1,635 psf. This translates to 11.5% p.a. This price appreciation will definitely beat Malaysia or Singapore stocks, or any other type of property asset class.
For Leisure Farm in Iskandar, if you assume that by 2024, it will be 30% cheaper than KL's because land will still be more abundant in Iskandar even by 2024, and income in Iskandar will still lag behind KL, then it will eventually settle at RM1,258 psf. It is currently at RM160 psf now for 24,000 sf. This translates into 22.9% per annum of return unleveraged!
Even if I assume that Leisure Farm's discount to prime KL will be 50%, it will still reach RM818 psf by 2024. That means
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