When it comes to buying a landed property in Singapore, there are several options to consider. These include rebuilding, A&A (additions and alterations), renovation, and brand new developer sale. Each option has its own set of pros and cons, and it's important to carefully consider your needs and preferences before making a decision.
Rebuild
Rebuilding is an option for those who are looking for a completely new and custom-built home. This option allows you to design and build your dream home from the ground up, giving you complete control over the layout, size, and features of your property. However, rebuilding can be a time-consuming and costly process, and it may not be the best option for those who are looking for a more affordable or quicker solution. Typically you would want to plan for around 1.5 to 2 years for the building to be completed.
If you want to consider this option, you should be looking for a single storey or double
storey landed home with the age of roughly about 25 years and older. They require immediate and extensive renovation including full teardowns and rebuilds the moment they are purchased. These properties are more suited for buyers who are particular about interior design, and want to design the architecture of the home according to their own preferences.
Base on Jan 2023 latest figures, depending on where you would like to purchase your property, property prices for such old house based on land size in OCR is averaging around $1,000 to $1,600 per square feet, in RCR is around $1,500 to $2,100 and in CCR is around $2,300 to $2,900. You would also need to budget for around $400 to $600 per square feet multiply by the buildup area for the construction cost of rebuilding a landed property.
A&A
A&A, or additions and alterations, is another option for those who are looking to make changes to an existing property. This option allows you to make changes to the existing structure of a property, such as adding rooms, renovating the kitchen or bathrooms, or making other changes to the layout. This can be a more affordable and quicker solution than rebuilding, but it may not be as flexible, and you will be limited by the existing structure of the property. Typically you would want to plan for around 6 to 12 months for the building to be completed depending on the amount of work to be done.
Please note your building proposals need to meet the following criteria to qualify as an Additions & Alterations (A&A) proposal:
Proposed additional gross floor area shall not exceed 50% of the approved gross floor area;
External walls that are to be removed and replaced with new walls shall not exceed 50% of the approved external walls;
Structural changes to the existing landed dwelling house (eg replacing or constructing new columns/beams and reconstructing existing floor slabs) shall not exceed 50% of existing building;
Changes/replacement of entire roof (with/without resultant increase in height) shall not involve an additional storey;
Where an attic is added, the increase in GFA shall be less than 50%.
Proposals that do not comply with the above criteria for Additions & Alterations shall be considered as Reconstruction (Rebuild) proposals. Works resulting in the following outcomes shall also be deemed as reconstruction, regardless of whether the works exceed 50% of the existing building GFA:
Increase in storey height (including changes/replacement of any part of the roof involving an additional storey)
Change in landed dwelling housing form (for example, from semi-detached house to detached house).
If you want to consider this option, you should be looking for a 2 to 3 storey landed home with the age of roughly 15 years to 25 years since anything older might have structural integrity issues. They likely require major renovation in the form of Addition and Alteration (A&A). These properties are more suited for buyers who are more budget conscious and would like to move into the property earlier than compared to a Rebuild project.
Base on Jan 2023 latest figures, depending on where you would like to purchase your property, property prices for such house based on land size in OCR is averaging around $1,500 to $2,100 per square feet, in RCR is around $2,100 to $2,700 and in CCR is around $3,000 to $3,600. You would also need to budget for around $200 to $300 per square feet multiply by the buildup area for the A&A cost for a landed property.
Renovation
If you're looking for a more move-in ready option, a newer resale property may be the right choice for you. These properties have already been built and are ready for occupancy, which means you can move in with some minor renovations. If you want to consider this option, you should be looking for a 2 to 3 storey landed home with the age of roughly 5 years to 15 years. They are typically priced at a discount compared to brand new development and there a higher chance of finding more units available for sale in the location you want.
Base on Jan 2023 latest figures, depending on where you would like to purchase your property, property prices for such house based on land size in OCR is averaging around $1,700 to $2,300 per square feet, in RCR is around $2,400 to $3,000 and in CCR is around $3,300 to $3,900. You would also need to budget for around $50 to $150 per square feet multiply by the buildup area for the renovation cost for a landed property.
New Developer Sale
Developer Sales are another option for those looking to buy a landed property in Singapore. These properties are typically new constructions that are being sold by developers. This option would be the quickest solution, and it also come with some additional benefits, such as warranties and a more modern design. However, developer sales may be limited in terms of customization options, and you might be buying a property that is similar to other properties in the development. Such properties are desirable for families looking to move in quickly and don't mind paying a slight premium for a brand new property.
Buy a building under construction from the developer is also an option for those who are looking to move into a new home faster and still allow for some customization to be done to your preference. This option can be more cash flow friendly than buying a completed property, as you only need to make a 5% booking fee and pay the remainder with progressive payments. It's great if you want to lock down a property purchase with minimal upfront payment.
Base on Jan 2023 latest figures, depending on where you would like to purchase your property, property prices for new developer sales based on land size in OCR is averaging $1,900 to $2,500 per square feet, in RCR is around $2,700 to $3,300 and in CCR is around $3,700 to $4,300.
Comparison Between the Different Options
In the chart below, I did an analysis on the different options in different regions of Singapore based on a hypothetical scenario of a buyer looking for a landed property with 2000 sqft Land size and 4000 sqft of Build Up Area. The psf (Land Size) values are based on the average of the figures I presented above. From there, I multiply it by 2000 sqft Land Size to get an estimate of the Property Price that you would need to pay. Depending on the different choice of property you might want to buy, there are different additional cost that you have to pay to add up to the Total Cost. Finally I took the Total Cost divided by 4000 sqft buildup area to get the psf (Build Up Area) to decide which option gives a better value.
From the analysis above, it is interesting to note that based on the current market price, the psf (Build Up Area) is quite similar among the different options you can choose. The property market is actually very efficient in removing any arbitrage opportunities so if you can purchase any landed property which gives you a lower psf (Build Up Area) compared to my hypothetical scenario, you might consider it as a good deal. If you have any property in mind and want to know how does it compare against the various other options available in the market, feel free to reach out to me for a discussion.
Your Finances
Your finances has a significant impact on the type of landed property you can purchase due to government regulations such as TDSR (Total Debt Servicing Ratio). Landed properties, such as terrace, semi-detached, and bungalow also come with varying price tags depending on factors such as location, size, and amenities. If your budget is limited, you may have to consider smaller or less luxurious properties in areas that are less expensive. On the other hand, if you have a larger budget, you may be able to afford a larger property with more features in a prime location. It is important to establish your finances before embarking on a property search to avoid wasting time looking at properties that are outside of your price range. Check out my article: "How Much You Need to Earn to Afford a Landed Property in Singapore?" for a more in-depth analysis on this topic.
Pros and Cons
Beside the financial analysis above, I also summarize the Pros and Cons of the different options. Depending on your individual situation and needs, you might prefer different options beside considering the financial aspect.
If you want more tips on landed property selection, check out my article: "Investing in Singapore's Landed Property Market: How to Choose the Right Property".
Conclusion
In conclusion, when choosing between landed property options in Singapore, it's important to consider your budget, time frame, and preferences. Each options have their own unique set of pros and cons, and it's essential to weigh them before making a decision. Ultimately, the key is to find the option that best fits your needs and goals. Whether you decide to rebuild, carry out an A&A project, buy a newer resale property, or purchase a brand new property from a developer, I am here to help you navigate the process and find the perfect property for you.
Disclaimer: PropNex Realty Pte. Ltd. or its salesperson will not be responsible for any errors or omissions or for the results obtained from the use of this information. All information is provided with no guarantee of accuracy. If in doubt, kindly seek advice from your financial advisors or bankers before you make any property investment decisions.