We Have A $4.5 – $6m Budget. Should We Buy A Freehold Condo, Cluster Landed, Or Landed Home?

11 min read

Hi

We have a budget of $4.5 to $6m and would like to understand which of the options would make the most sense in terms of practicality and investment return. We are a family of 2 adults and 2 kids (one 12 and one 10 years old). In the future, we may have parents staying with us or need to live closer so we want something accessible to amenities. Kids schools are near Ang Mo Kio and Buona vista, while work is near Buona Vista and Lavender respectively. So we are thinking Thomson or Stevens MRT is a good one for public transport.

1. A FH 4-bedroom apartment in District 9/10/11 with full facilities eg. Park Infinia or the Shelford

2. A FH cluster landed in a fairly central location eg. Chancery or Stevens area 

3. A FH landed terrace or small corner terrace in Thomson, Ang Mo Kio area 

We would especially like to understand your analysis on how FH cluster landed has compared to landed historically and welcome your feedback on what you think would make the most sense for us among the 3 options.

Thanks

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Hello there,

That’s a fairly broad spectrum of different locations and property types. It would seem that you are still quite early on in your decision-making process, and perhaps it is worth really honing down on the location first (as that would present the biggest lifestyle change for you given the variance in everyone’s different locations) rather than thinking about what type of property would suit your needs better.

Nevertheless, the general rule of thumb is that freehold properties tend to perform better in the long run and have better value retention potential, so you’ll notice that they mostly have a lower transaction volume as owners usually hold on to these properties for a longer period of time (say >10 years). With lower transaction volumes, prices also move slower in the short run as compared to 99-year leasehold developments which typically see the most appreciation in their younger years.

Seeing that you are only looking at freehold properties, we presume your plan is to stay in the property for a long time (as it makes it more worth it to pay that premium). As your kids are now 10 and 12, they’ll soon be attending secondary school so perhaps your choice of the location of your property should not be affected by their present school locations. But since your workplaces are in Buona Vista and Lavender, we understand the draw of staying somewhere more centralised. However, if your plan isn’t to stay for the long term, then these options may not be the most suitable.

Let’s go through the options that you have listed:

Option 1: Freehold 4-bedroom apartment in D9/10/11 with full facilities

From the graph above, we can see that prices of freehold 4-bedders in the Central area are moving in line with all other freehold condominiums in the same area, along with freehold condominiums in Singapore as a whole.

It is interesting that you mentioned full facilities because this is one factor that may affect the demand and in turn value, of a property. There are many freehold developments in the Central region and quite a number of them are smaller luxury condominiums that cater to a niche group of buyers and may not have extensive facilities. A development with full facilities not only attracts homeowners but also investors who are buying the place to rent out as tenants would appreciate a project with more (functional) facilities over one with fewer facilities.

Having full facilities usually also means that the development is of a certain size and being in a decently sized project has its perks. Generally, the bigger the development, the more the cost of maintenance is shared amongst more households, keeping it more affordable.

This is the reason why some new landed owners choose to put in a pool, regardless of the usage of one, as they know that this would be an attraction point when it is time to sell later on.

Option 2: Freehold cluster landed in a fairly central location

In terms of affordability, your budget of $4.5 – $6m will allow you to purchase a freehold cluster home. For your information, here are some transactions in the past 6 months within the CCR:

Project Name	Transacted Price ($)	Area (SQFT)	Unit Price ($ PSF)	Sale Date	Address	Property Type	Number of Units	Tenure	Completion Date
MONTCLAIR @ WHITLEY	$3,960,000	4,026	$984	5 Dec 2022	121B WHITLEY ROAD #01-XX	Semi-Detached House	1	Freehold	2011
VILLAS @ GILSTEAD	$4,688,888	7,449	$629	17 Nov 2022	46C GILSTEAD ROAD	Semi-Detached House	1	Freehold	2011
FERNHILL COTTAGE	$4,200,000	2,443	$1,719	17 Oct 2022	66 FERNHILL ROAD	Terrace House	1	Freehold	2001
PALMS @ SIXTH AVENUE	$5,168,888	4,596	$1,125	30 Sept 2022	235 SIXTH AVENUE	Semi-Detached House	1	Freehold	2015
FIVE CHANCERY	$7,488,888	6,512	$1,150	29 Sept 2022	5G CHANCERY LANE	Detached House	1	Freehold	2011
WATTEN RESIDENCES	$4,550,000	4,090	$1,112	1 Sept 2022	24 WATTEN RISE	Semi-Detached House	1	Freehold	2011
THE WHITLEY RESIDENCES	$5,300,000	6,125	$865	29 Jul 2022	139C WHITLEY ROAD	Semi-Detached House	1	Freehold	2016
VENTURA HEIGHTS	$3,750,000	4,661	$805	15 Jul 2022	71B JALAN LIM TAI SEE	Semi-Detached House	1	Freehold	2011
WATTEN RESIDENCES	$3,900,000	2,949	$1,322	17 Jun 2022	30B WATTEN RISE	Terrace House	1	Freehold	2011
SHAMROCK VILLAS	$4,680,000	6,340	$738	14 Jun 2022	53B NAMLY PLACE	Detached House	1	Freehold	2013
DUBLIN LODGE	$6,700,000	2,562	$2,615	13 Jun 2022	42 DUBLIN ROAD	Terrace House	1	Freehold	1987
MOUNT SINAI RESIDENCES	$4,250,000	6,954	$611	10 Jun 2022	35 MOUNT SINAI LANE	Detached House	1	999 yrs from 21/09/1885	2012
CHANCERY HILL VILLAS	$5,000,000	5,651	$885	10 Jun 2022	12J CHANCERY HILL ROAD	Semi-Detached House	1	Freehold	2018
DUBLIN LODGE	$6,700,000	2,583	$2,594	10 Jun 2022	32 DUBLIN ROAD	Terrace House	1	Freehold	1987
ESTRIVILLAS	$4,100,000	5,780	$709	9 Jun 2022	55E JALAN LIM TAI SEE	Semi-Detached House	1	Freehold	2013

Most of these were built in the last 10-11 years, so we doubt that major renovations are needed. Moreover, the benefit of a cluster home is that you would typically only require renovations done internally as compared to landed homes where you may want to raze the building to the ground and rebuild it.

So should you get a cluster landed home or one that’s purely landed?

First, let’s briefly touch on the difference between the two.

Both cluster landed and landed properties are houses (that is, a standing building with a ground floor and usually one or more upper floors). 

The difference is whether or not there’s a strata title. Cluster housing involves a strata title, in which there’s a Management Corporation Strata Title (MCST). The overall development is shared by multiple owners. It works the same way as a condo, except your unit is a house and not just an apartment. 

Cluster housing includes common facilities, such as a pool, clubhouse, gym, etc., and the owners share the maintenance costs for these.

With a landed property, there are no other owners except you; the land and the property on it are yours to maintain and change as you see fit (within the bounds of URA regulations). 

Also, note that for cluster homes the monthly maintenance costs will be higher than what you might expect from a typical condo, given the smaller number of units. Some of these cluster homes do come with a lift, and private pool – but these will come with their own set of additional monthly maintenance fees that will come out of your own pocket.

If you haven’t viewed any cluster homes yet, it is also worth mentioning that sometimes the house doesn’t quite feel as big as spacious as the size may suggest on paper. Especially if it is set over several floors, there’s a lot of “wasted” space that goes to the landing, stairs, planters, and balconies, etc.

You’ve also asked about the performance between cluster and pure landed homes.

Looking at the graph, we can see that prices of cluster landed in the Central region have been rather stagnant and its growth rate in the last 2 years at 15% is slower compared to landed properties which have appreciated by 27% in the same time period.

The price gap between the two property types is also increasing with cluster landed transacting at an average PSF of $1,061 and landed at $2,358 from January 2022 till date. If we are looking at a 2,000 sq ft house, it will cost $2.594M more to purchase a landed than a cluster landed which is a considerably large difference. Buyers who are set on buying a landed house in the Central region but are priced out of buying a landed property may then turn to a cluster landed instead.

It ultimately boils down to what you are looking for in the property. Besides the space, buyers looking to purchase a landed property usually appreciate the privacy a landed house provides. So if their affordability allows, most buyers will likely pick a landed over a cluster house. But if you want to stay in a landed but do not want the hassle of maintenance, you prefer cluster housing where the maintenance is handled by the MCST. Here are some questions you should ask yourself when you’re deciding between a cluster landed and a landed property!

Option 3: Freehold terrace in Thomson or Ang Mo Kio area

First things first, unless your kid would be continuing their secondary school in the Ang Mo Kio area, it doesn’t seem like a great choice in the long term as it is still an unknown where their secondary schools would be in the future.

Nevertheless, let’s check out the latest transactions for freehold terrace homes in the Ang Mo Kio Planning Area:

Project Name	Transacted Price ($)	Area (SQFT)	Unit Price ($ PSF)	Sale Date	Address	Type of Sale	Type of Area	Property Type	Tenure
TEACHERS’ HOUSING ESTATE	$3,338,000	2,176	$1,534	24 Nov 2022	20 IQBAL AVENUE	Resale	Land	Terrace House	999 yrs from 02/12/1885
SEMBAWANG HILLS ESTATE	$3,780,000	1,501	$2,519	7 Nov 2022	65 CASUARINA ROAD	Resale	Land	Terrace House	Freehold
PRESIDENT GARDENS	$5,308,000	3,850	$1,379	21 Oct 2022	38 LENTOR GREEN	Resale	Land	Terrace House	Freehold
THOMSON HILLS ESTATE	$4,250,000	2,268	$1,874	18 Oct 2022	26 THOMSON HILLS DRIVE	Resale	Land	Terrace House	Freehold
TEACHER’S HOUSING ESTATE	$1,650,000	1,807	$913	13 Oct 2022	33 TU FU AVENUE	Resale	Land	Terrace House	999 yrs from 02/12/1885
SUNRISE VILLA	$3,520,000	1,717	$2,050	4 Oct 2022	86 SUNRISE AVENUE	Resale	Land	Terrace House	Freehold
LENTOR VILLAS	$3,880,000	2,168	$1,790	26 Sept 2022	45 LENTOR CRESCENT	Resale	Land	Terrace House	Freehold
SEMBAWANG HILLS ESTATE	$2,550,000	1,501	$1,699	15 Sept 2022	124 NEMESU AVENUE	Resale	Land	Terrace House	Freehold
SEMBAWANG HILLS ESTATE	$3,680,000	1,518	$2,425	15 Sept 2022	94 CASUARINA ROAD	Resale	Land	Terrace House	Freehold
TEACHER’S HOUSING ESTATE	$2,800,000	1,804	$1,552	14 Sept 2022	49 IQBAL AVENUE	Resale	Land	Terrace House	999 yrs from 02/12/1885
THOMSON HILLS ESTATE	$3,000,000	2,010	$1,493	9 Sept 2022	41 SEMBAWANG HILLS DRIVE	Resale	Land	Terrace House	Freehold
LENTOR VILLAS	$3,850,000	2,122	$1,815	6 Sept 2022	23 LENTOR CRESCENT	Resale	Land	Terrace House	Freehold
LENTOR VIEW	$3,530,000	2,531	$1,395	6 Sept 2022	18 LENTOR PLACE	Resale	Land	Terrace House	Freehold
THE COUNTRYSIDE	$5,010,000	3,510	$1,427	26 Aug 2022	8 COUNTRYSIDE ROAD	Resale	Land	Terrace House	Freehold
FLORISSA PARK	$3,550,000	2,260	$1,570	19 Aug 2022	11 FLORISSA PARK	Resale	Land	Terrace House	Freehold
SEMBAWANG HILLS ESTATE	$3,458,888	2,121	$1,631	19 Aug 2022	59 JALAN CHENGAM	Resale	Land	Terrace House	Freehold
RAINTREE VALLEY	$4,600,000	3,421	$1,345	17 Aug 2022	2 MUNSHI ABDULLAH WALK	Resale	Land	Terrace House	Freehold
THE COUNTRYSIDE	$4,028,888	2,852	$1,412	17 Aug 2022	26 COUNTRYSIDE PLACE	Resale	Land	Terrace House	Freehold
FLORISSA PARK	$5,480,000	4,976	$1,101	15 Aug 2022	2 FLORISSA PARK	Resale	Land	Terrace House	Freehold
THOMSON HILLS ESTATE	$3,128,000	2,013	$1,554	1 Aug 2022	5 SEMBAWANG HILLS DRIVE	Resale	Land	Terrace House	Freehold
SEMBAWANG HILLS ESTATE	$4,200,000	1,501	$2,799	31 Jul 2022	97 CASUARINA ROAD	Resale	Land	Terrace House	Freehold
SEMBAWANG HILLS ESTATE	$3,450,000	1,501	$2,299	14 Jul 2022	39 NEMESU AVENUE	Resale	Land	Terrace House	Freehold
FLORIDA PARK	$4,000,000	1,692	$2,364	8 Jul 2022	50 SUNRISE WALK	Resale	Land	Terrace House	Freehold
LENTOR VILLAS	$6,450,000	4,731	$1,363	7 Jul 2022	39 LENTOR CRESCENT	Resale	Land	Terrace House	Freehold
FUDU PARK	$4,380,000	3,068	$1,428	5 Jul 2022	12 FUDU WALK	Resale	Land	Terrace House	Freehold
CHIP THYE GARDEN	$3,300,000	1,889	$1,747	4 Jul 2022	86 YIO CHU KANG GARDENS	Resale	Land	Terrace House	Freehold
TEACHER’S HOUSING ESTATE	$3,220,000	1,799	$1,790	1 Jul 2022	140 TAGORE AVENUE	Resale	Land	Terrace House	999 yrs from 02/12/1885
TEACHER’S HOUSING ESTATE	$3,258,000	1,794	$1,816	29 Jun 2022	154 TAGORE AVENUE	Resale	Land	Terrace House	999 yrs from 02/12/1885
FLORISSA PARK	$4,380,000	3,226	$1,358	13 Jun 2022	58 FLORISSA PARK	Resale	Land	Terrace House	Freehold
CHIP THYE GARDEN	$3,768,000	2,160	$1,744	10 Jun 2022	37 YIO CHU KANG GARDENS	Resale	Land	Terrace House	Freehold
SEMBAWANG HILLS ESTATE	$4,020,000	1,983	$2,028	7 Jun 2022	24 JALAN TELANG	Resale	Land	Terrace House	Freehold
THOMSON HILLS ESTATE	$2,850,000	2,013	$1,416	2 Jun 2022	7 SEMBAWANG HILLS DRIVE	Resale	Land	Terrace House	Freehold

Quite clearly, homes in the area are well within your budget (most are actually below). One that falls within your budget is this corner terrace home that has a pretty sizeable land area of 3,850 sqft and is within walking distance to Lentor MRT:

The home looks to be two-storeys high with an attic, and looks to be suitable for housing a room on the ground level (potentially for your parents) and 3 bedrooms upstairs. There’s also a long driveway which allows for plenty of space for your kids to run around (assuming you wouldn’t be parking too many cars here!).

So how have prices of cluster homes fared here compared to landed homes? For this, we’ll consider D20 as a whole which covers the Bishan and Ang Mo Kio area:

From the graph it may seem like prices of cluster houses in D20 are rather erratic but this is due to the extremely low transaction volume so it may not be reflective of their true value. On the other hand, if we were to just look at landed houses, prices are on a gradual uptrend and have appreciated 33% in the last 2 years.

District 20 is a popular choice for many homeowners for obvious reasons. Besides its good location on the city fringe, you get to enjoy the benefits of staying in a mature estate – there are many renowned schools for families with kids, lots of markets and food centres, shopping malls for retail options, proximity to nature parks, etc.

Cluster landed vs Landed Performance

We have previously written a piece on the historical price trend of cluster houses which you can read about here!

For the most part, cluster houses experience a lower price appreciation compared to landed houses and also condominiums in fact. As certain districts do not have cluster houses or a very small number of them, it may not be a fair comparison to look at the overall trend. So we’ve picked out a couple of districts across the island for comparison.

We can see that cluster houses in some districts perform better than others, but even then they are always lagging behind the landed properties in the same area.

This could be due to several reasons. Firstly, there is a smaller number of freehold cluster houses as compared to freehold landed properties so generally, transaction volumes are lower and prices may appear more volatile.

Secondly, if their affordability allows, we believe the majority of landed buyers would choose a landed house over a cluster house so cluster houses actually cater to a niche group of buyers and demand does not fluctuate too much. This also means reselling it in the future could pose a challenge.

What would make the most sense for you?

Suffice to say, with a budget of $4.5 – $6M you do have many options to choose from as shown in the transactions above.

In terms of practicality, it really depends on what is important for you.

For instance, you’d have convenient access to an array of facilities if you were to stay in a condominium but you will not get the same privacy as staying in a landed house.

The former may be important to you as having facilities could mean a lot of spare time can be spent doing recreation or exercise in the condominium’s swimming pool – particularly important if you want your kids to exercise frequently.

The latter could make a lot of sense if you prefer privacy – not that a condominium isn’t private, but it’s certainly less so compared to owning your own home.

Staying in a landed home also means there’s a good chance that your kids have to walk more out of the estate to get to access transportation options.

Staying in a central location such as D9, 10, 11 can be very accessible in terms of getting around, but it does not have the same infrastructure that a heartland has, like wet markets and hawker centres due to a lack of HDBs around.

In other words, practicality is very subjective as it’s based on your lifestyle needs.

On investment returns, seeing that the performance of cluster houses typically lags behind condos and landed properties, it will be the last on our list.

It is also important to consider your holding period. Even if you were to stay for a long term, how long is long exactly?

One thing buyers tend to overlook is the upkeep of the property. For a landed, you’ll have to bear the cost of maintenance and over time as there could be an external or structural repair that needs to be done and these can be rather hefty.

Since we are looking at freehold properties, their prices generally hold up well over time but it’s hard to say for sure which property type has the upper hand. But in land-scarce Singapore, many times buyers ultimately choose a landed property over a condominium.

If we were to look at the price trends of freehold condominiums and landed in the last 8 years, prices of condos have grown faster than that of landed properties. However, we also need to consider consumers’ quantum affordability as well.

Overall, among your options, if appreciation and practicality are your main concern, then freehold condominiums in D9/10/11 would be a better choice. There are several options that are also close to amenities like those in Novena, where malls such as Novena Square and Square 2 with a plethora of F&B options are hosted.

Having facilities could also be very desirable as you have kids, and you mentioned your parents may want to move in with you, so having a landed home may not be as suitable unless you’re prepared to build a room on the ground level for them to stay in (or at least build an elevator which can be very costly!).

Its freehold nature also gives you a hedge against real estate inflation. Moreover, there is only that much supply of 4-bedroom freehold condos in D9/10/11 Singapore today which can help protect your upside further.

That said, a freehold landed can still make sense for you – if you find the right one. While we aren’t sure if Ang Mo Kio/Thomson is the right choice given your requirements, perhaps other locations may be a better fit. The issue for a landed home would be if the layout is suitable for your needs in the long term. Besides having a lift, you would want to have a bedroom on the first floor for your parents.

Have a question to ask? Shoot us an email at hello@stackedhomes.com – and don’t worry, we will keep your details anonymous.

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We hope that our analysis will help you in your decision-making. If you’d like to get in touch for a more in-depth consultation, you can do so here.