I read with the article published on Saturday, July 10 2010, “Some missing out on property boom” by Esther Teo with gratification. With the current properties surging sky high, and many articles ‘talking up’ the market, this article helps to remind to us the inherent risks in property market. The prices will not be going up forever. What goes up will come down.

For projects launched amid a property boom when speculative mood is high, you tend to get burnt easily especially if you are not financially strong. Just take a look one of the laggards is 99 year leasehold Bishan 8 by Far East Organization: it was launched at an average of $1000 psf in June 1997, however the pricing of the development has not been catching up with the property hike now. The recent transactions have been hovering over average pricing of $800 psf, except with the most recent transaction at $912 psf transacted last month.

Other properties appearing on the list are Avalon at Anderson Road, Chelsea Gardens at Walshe Road, Duchess Crest at Duchess Avenue, Gardenville at Walshe Road, Seasons View at Pemimpin Drive, and Villea Marina at Jalan Sempadan.

From the chart, we are able to see that the sluggish pricing has been more prominent with properties with 99 year leasehold status. Though the pricing gap between freehold & leasehold has been narrowing in today’s market, the leasehold pricing will start to feel its greatest depreciation impact when it hits above its 50 years. The value of the property will be depreciating with an accelerating rate as the number of tenure reduces.