Landed homes hold a special allure in Singapore’s property market because they stand as timeless symbols of prestige and exclusivity. Furthermore, because of the limited supply of new landed homes, they have become a unique wealth preservation asset during downturns. This is particularly true when you look at the overall supply and stock of landed homes in the whole of Singapore. There are only an estimated 73,000 landed homes, which is 19% of the private housing stock and only 4% of the total housing stock, according to data from URA’s REALIS. These numbers are inclusive of freehold/999-year leasehold/99-year leasehold pure landed homes, and strata landed homes.
As the property market continues to evolve, could the price appreciation of landed homes make them further out of reach of the average Singaporean? In this article, we will explore pricing gaps in the landed market, and why Pollen Collection’s brand new landed homes present a unique opportunity for homebuyers who have been hunting for a good entry into the segment. For more project information about Pollen Collection, do refer to our previous article here.
Categorisation of Landed Types
Typically in high-rise private condominiums and strata landed homes, residents only own the strata space and not the land that they are built on. On the other hand, in land-scarce Singapore, it is no wonder why pure landed homes are a coveted asset class of property because it is where an owner literally gets to own a piece of private land, with land title and home.
Pollen Collection is one such example of a pure landed property. It is a development comprising semi-detached and terrace houses, and one of the rare brand new landed developments that is developed to cater to Singaporeans’ aspiration of owning landed homes in Singapore. Pollen Collection offers buyers who are considering 4-5-bedroom condominiums an alternative housing option, with attractive entry prices from $3.65 million.
There are also hybrid types of landed housing with facilities, known as strata landed housing. These are usually found in condominiums with MCST.
One difference between strata landed and pure landed properties is the maintenance. For strata landed properties, owners are required to pay MCST fees for the maintenance of the estate and facilities within the development. MCST approval is also required for any renovations or alterations done to the external facade of the property. On the other hand, there is no MCST nor monthly maintenance fee to be paid by owners of pure landed properties. Owners of pure landed properties have the discretion and ‘freedom’ to carry out renovations, alterations, or even fully rebuild their homes, as long as approvals are obtained from relevant authorities.
Categorisation of Pure Landed Homes and Pricing Gap
Over the last 3 years (2020 to 2023), pure landed properties have appreciated greatly, causing many prospective buyers to be priced out of the market. The current quantum for a Cat 2 or Cat 3 (refer to graphics below) freehold/999-year leasehold inter-terrace is around $4.5 million to $5 million after factoring in land costs, and can even balloon up to $5.5 million to $6 million after factoring in the renovation/A&A costs. This has created a disparity effect, where we observe downward spillovers in demand as buyers who are priced out look at alternative asset classes based on size and quantum.
We can break down pure landed homes into 4 main categories. The first category are what we call ‘Cat 1’ homes, which are landed properties over 30 years old and require a full rebuild that typically takes around 18-24 months to complete. The second category, ‘Cat 2’ homes, are landed properties over 20 years old and require some A&A that typically takes around 6-12 months to make it a livable home. The third category, ‘Cat 3’ homes, are newer landed properties that are less than 15 years old and require some renovation that typically takes around 3-6 months to complete depending on the scale of renovations. The last category, ‘Cat 4’ homes, are brand new landed properties bought directly from a developer.
Although we can categorise 99-year leasehold pure landed properties into these 4 categories, we generally discourage owners of 99-year leasehold properties to tear down and rebuild or do any A&A because there is no economic value given the depreciating lease.
Looking at the comparison above across the different categories, we can see that there is a pricing gap between freehold pure landed inter-terraces and 99-year leasehold pure landed inter-terraces.
Cat 1 freehold pure landed inter-terraces comes with an entry price quantum of around $5.5 million to $5.8 million after taking into consideration the cost of tearing down ($350 PSF to $450 PSF) and the rebuild cost (~$1.2 million to $1.6 million). On the other hand, Cat 4 brand new 99-year leasehold pure landed inter-terraces at Pollen Collection is going for a quantum starting from $3.65 million.
That is around a $2 million pricing gap between entry-level freehold pure landed inter-terrace and a brand new 99-year leasehold pure landed inter-terrace at Pollen Collection.
Buying a Brand New 99-year Leasehold Pure Landed: Why It May Make Sense
1. Pure Landed Appreciation Potential
Pure landed transactions are still strong, with an average of 1,500 units being transacted per year over the past 10 years. And as we mentioned earlier, the average PSF has appreciated strongly in recent years and will likely continue to do so due to rising land costs and asset inflation.
2. Limited Supply
Furthermore, pure landed properties are limited in Singapore, as the landed stock has plateaued at around 73,000 since 2018. It is very rare to find brand new landed homes in the market now since niche developers of freehold properties or existing landed owners in the resale market are trying to avoid taking the risks of rebuilding Cat 1 landed homes due to high land price, rising construction costs on the PSF level, and increased demand for provisions such as home lift, solar panels, and EV chargers.
3. Brand New Home: Peace of Mind
Opting for a newly developed landed home eliminates the need to oversee the reconstruction process, providing peace of mind regarding the home’s condition and structural integrity. This assurance is particularly valuable to investors and potential buyers, justifying the slightly higher cost. Additionally, some new developments like Pollen Collection extend customer care services for up to 12 months after key collection, ensuring ongoing support from the developers even after property handover. This is a unique feature unavailable in the resale landed property market.
4. Collective Mindset only enjoyed by New Launches
Buying a brand new home, especially in an enclave like Pollen Collection where all the buyers are entering at the same price and PSF range, will also generate a Collective Mindset. 3 years later when all these landed homes achieve TOP, it is the one chance that every owner will have the same mindset to sell at more than the purchase price, creating what we call the upward valuation potential whenever a project hits its TOP date.
Closing Thoughts
In today’s market, it is challenging to find a property with a generous size of over 4,000 sqft of built-up space priced under $4 million. Pollen Collection’s spacious designs offer ample room for 7-10 family members to live together in an intimate and luxurious setting. On top of being a brand new landed home, future-proofing features such as a lift to all levels also come with the unit, ensuring convenience to family members of all ages.
With the pricing gap that we have identified earlier, brand new 99-year leasehold pure landed homes at Pollen Collection offers a good entry into the landed market without the need to do any major renovations or A&A. Future launches, if any, will serve as an insurance for buyers of Pollen Collection because with prices appreciating with asset price inflation, developers are unlikely to launch at lower prices.
If you are in the market for a landed home, and are looking at a budget of around $3.65 million all in for an intermediate terrace home, a brand new landed home at Pollen Collection may be your last window of entry into the landed segment.
We hope that this article has given you a better understanding of this unique asset class and provided a good analysis of why you should consider a brand new 99-year leasehold pure landed home at Pollen Collection. We recently concluded our live and exclusive PLB x BSEL seminar, where PropertyLimBrothers CEO Melvin Lim did a deep dive into Singapore’s landed property landscape and shared insightful analyses regarding the growth potential of the segment. For more information on Pollen Collection, do sign up here for a showflat visit.
If you are interested in learning more about the latest trends and developments in the property market, do follow our educational YouTube channel, NOTG and upcoming webinars, where we will be sharing our insights and analysis on various hot topics in real estate. Do also join us for our upcoming in-person seminar to learn more about the opportunities in Singapore’s landed property market.
For those in need of tailored advisory services, our team of experienced real estate consultants is always here to provide professional guidance and expert advice that aligns with your unique preferences and requirements. Feel free to reach out to us, and we will be more than happy to assist you with your property decisions. Thank you for reading and following PLB, we look forward to hearing from you soon!
