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Leasehold real estate refers to property that has a contractual agreement between lessor and lessee that grants the latter exclusive right of use and control, for a specified time period.
Most private property in Singapore are leasehold, while all HDB flats are lease hold.
At the end of a 99 year lease, ownership reverts back to the original owner.
The land might then be redeveloped or leased to another party.
Because of this, it goes without saying that freehold property would be more valuable that leasehold property.
When lenders assess mortgage applications for leasehold property, the number of years left on the lease is often a basic criteria that has to be met.
For example, a bank might not even consider financing a building with 30 years left on the lease. Even if the borrower only takes on a 10 year property loan tenure, there’s risks involved with foreclosure as the value of the property would be depreciating fast. It might not even sell at a good price at the auction house to settle the mortgage debt.
An apartment with 20 years left would also make no sense to finance should a borrower want a 30 year mortgage.
While residential leasehold property usually come with 99-year lease brand new, industrial property often come with 60-year lease.
for the last 36 months?
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