Is leasehold landed or leasehold cluster a better investment option if both have similar tenure left?

When considering an investment between a leasehold landed property and a leasehold cluster home in Singapore, several factors come into play.

Capital Appreciation

Leasehold cluster homes have historically shown significant capital appreciation, often outpacing other types of leasehold properties. For instance, during market booms, leasehold cluster homes have seen rapid price growth, with some periods showing annual price increases of up to 20.1%.

Affordability and Pricing

Cluster homes are generally more affordable than conventional landed properties, with prices sharply lower due to the shared facilities and strata title arrangement. This makes them an attractive option for those looking for a landed living experience without the high cost of a traditional landed home.

Rental Yields

Cluster homes tend to offer competitive rental yields, often ranging from 2% to 4%, and in some cases, even exceeding 5%. This is due to their lower purchase price compared to traditional landed homes, which can result in higher gross rental yields.

Maintenance and Facilities

Cluster homes come with the advantage of shared facilities such as swimming pools, gyms, and 24-hour security, which are managed by the Management Corporation Strata Title (MCST). This reduces the individual owner's maintenance burden and provides a more convenient living experience.

Demand and Supply

The demand for cluster homes has been robust, especially among those who have sold their units in en bloc sales and are looking for replacement dwellings. The limited supply of cluster homes, due to stricter development guidelines, also helps in maintaining their capital values.

Lifestyle Considerations

For investors who prioritize space and amenities, cluster homes offer a unique blend of landed living with condo-like facilities, making them an appealing option for families and those who value these amenities.

In summary, if both options have similar tenure left, leasehold cluster homes might be a better investment option due to their potential for higher capital appreciation, competitive rental yields, and the convenience of shared facilities and maintenance. However, the decision ultimately depends on individual investment goals, lifestyle preferences, and the specific market conditions at the time of investment.