SINGAPORE: Holding on to an ageing property may not be a wise move, especially for homeowners with a 40-year-old home. According to 99.co, public and private properties start to lose value faster once they pass the 40-year mark or when the remaining lease drops below 65 years, as this is when depreciation accelerates and it becomes harder to preserve the home’s value or secure a strong resale price.
The property portal said that homes with 85 to 65 years of lease left fall into a moderate depreciation phase, where annual value can drop by about 5% to 8%. While owners can still sell the property at this stage, the chances of selling the property smoothly and at a high value start to narrow.
When the remaining lease drops to between 65 and 40 years, depreciation often exceeds 10% a year as the property enters its rapid depreciation phase.
The property value dips into the terminal phase when the remaining lease has fallen below 30 years. At this point, the home’s value sinks to just 20% to 30% of a comparable freehold property.
Ageing homes quietly drain finances, and these three costly factors show why it may be wiser to put a 40-year-old home up for sale:
Costly repairs and special levies
Many older condominiums were built with sinking funds based on outdated maintenance budgets. As lifts, façades and waterproofing systems need replacing, the Management Corporation Strata Title (MCST) may not have sufficient reserves for major works.
When this happens, owners face special levies that can run into tens of thousands of dollars. Unlike Housing and Development Board (HDB) estates, private developments have no government buffer, so the full cost falls on residents.
Higher maintenance fees
Monthly maintenance fees in older developments almost always rise over time amid frequent repairs, inflation and stricter safety requirements. Meanwhile, newer developments have lower upkeep because their systems are modern and still under warranty.
Expensive renovations
Older HDB flats and private condos often require major renovations. According to 99.co, a homeowner may need between S$60,000 and S$84,000 for a full renovation of a three-bedroom resale condo, while it may cost more than S$90,000 for a four-bedroom unit. These costs exclude structural or wiring replacements needed for homes over 40 years old.
These costly renovations also do not extend the lease of the property or lift its long-term value but simply help maintain it—capital that could otherwise be redirected towards a newer property. /TISG
Read also: Refreshed Jurong Eco-Garden now open as The Potter’s Garden
Featured image by Depositphotos (for illustration purposes only)
