You’ve viewed penthouses, five-bedder condo units, and all the largest property types out there. Still, there just isn’t anything with enough room. It’s time to look at landed properties, which are as big as they come.
This is also when you’ll realise landed properties are among the most diverse housing segment; ranging from shop houses to corner terrace houses to full bungalows. One of the first key differences to consider is whether to go for cluster housing, or a full landed property. Here’s how to pick between the two:
What’s the difference between cluster housing and full landed properties?
Both cluster housing and full 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 full 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).
There are upsides and downsides to both options. Here are 7 questions to answer when choosing:
1. What is your available budget?
During our last check, we found the biggest price difference between cluster housing (average of $1,232 psf) and full landed properties (average of $2,500 psf) to be around $1,268 psf was at District 9.
Here’s the full table for your reference:
In effect, you could be paying about double the price for a fully landed property. Remember that:
- Your monthly loan repayment cannot exceed 60 per cent of your monthly income, due to the Total Debt Servicing Ratio (TDSR). It’s best to avoid repayments that exceed 30 per cent of your monthly income.
- The total cost of your home should not exceed five times your combined annual income.
If your budget is around $2.5 million or under, cluster housing is usually the only landed option.
2. How “customised” do you want your home to be?
Cluster housing is much less flexible than fully landed housing. You cannot, for instance, tear down the house and rebuild it to your liking. The MCST will also have rules to maintain a uniform appearance for the houses, so you may be restricted in how you alter the façade.
It’s unlikely that you can expand the driveway, knock down a wall to have an open kitchen, add a basement level, etc.
With fully landed housing, you can do as you please, within URA regulations. That means you can hire an architect or construction company to build your dream house, and make your home truly one-of-a-kind. From indoor elevators to a basement den (with fully functioning toilet and TV lounge), you can do whatever your family needs.
That said, some landed properties have even more restrictions than cluster housing
These exceptions are in the form of conserved houses, such as Good Class Bungalows, or some shop houses. Due to their historical value, these properties are even more restrictive than cluster homes.
You’re definitely not allowed to tear down and rebuild conserved homes; and even the material used in interior renovations – such as the type of wood for floor boards – may be regulated. Depending on the level of conservation, it may not be possible to tear down or put-up new walls in your preferred manner.
Take a moment to think about the changes you want to make, either now or later. If all you want is to change the interior layout, then just check with the rules of the MCST – there may be sufficient flexibility in a cluster home. But if your desired changes include features like elaborate backyard gardens and koi ponds, then just look for a fully landed home.
3. Common and private facilities: do they make a big difference to you?
A cluster home means having to share the pool, gym, BBQ pits, etc., much as you would with condo living. This means, for example, that you won’t be able to monopolise the pool for poolside parties; or to use the gym for private physical training.
The upside is that maintenance is handled for you: the MCST has staff on call to clean the pool, pick up the litter, and handle the upkeep. As the cost is also shared, maintenance could be cheaper (e.g. you don’t have to buy and replace all your own gym equipment). This point is quite debatable, however, as if constructed well, a newly built landed should not be as costly to maintain.
Consider how often you’ll use the facilities, and to what purpose. If you only go for a dip in the pool once every few weeks, and aren’t the sort to host a lot of events, then cluster housing may be more convenient (otherwise you could end up spending more time maintaining your facilities than using them).
If the inverse is true, then pick fully landed properties, so you don’t need to deal with a dozen other families and their relatives coming to use the pool, gym, etc. Upmost privacy does come at a price.
4. Where are you going to park your car(s), and how do you feel about narrow roads?
Cluster housing almost invariably comes with a parking lot, with at least two parking spaces for each household (some have more).
With fully landed properties, parking is all on you – if the driveway isn’t large enough to accommodate your vehicles, then you’ll have to see if you can extend it, or risk parking your car outside.
On a related issue, most landed housing enclaves feature tight and winding roads. An example of this would be the housing enclave in Siglap, near the Siglap Hill area. This makes parking difficult, and it can be frustrating if a stranger’s car blocks your driveway, or some of your visitors have to park 600+ metres away on Christmas / Chinese New Year.
Also let’s not forget that if for example, you only have one sheltered carpark lot, your other cars or visitors will have to deal with the brunt of the weather. It really isn’t great convenience wise if its raining and you have just come home from a grocery run.
5. How do you feel about a more “packed” layout?
In general, cluster homes are more densely “packed” together than full landed properties. For example, Summer Gardens – while being one of the better located cluster housing developments – is often also criticised for how closely packed the units are.
Because of this, some home buyers may feel that cluster housing doesn’t provide the sense of privacy that you get from true landed housing. This is compounded by having to share the common facilities.
6. Do you hate being told what to do in your home?
Cluster housing is run by its MCST. This means the imposition of rules, such as no skating along the common pathways, restrictions on where you can walk your dogs, the ever-contentious rules on whether domestic helpers can use the pool, and so forth.
How do you feel about living under these rules? For some home owners, it makes little difference to their lifestyle (e.g. those without children or pets may not care). But if you feel you’ll chafe under these restrictions, then a full landed property may be the happier choice.
Note that you’re not entirely without voice in a cluster housing development; you can still vote at management committee meetings. But there’s no guarantee that you’ll get things your way.
7. Do you need 24-hour security?
Custer housing comes with in-house security. Never underestimate the importance of this. For example, consider what happens if you’re going abroad for a few weeks or a month: a full landed property will be completely unguarded in that time, and you’ll have to depend on neighbours for help.
Owners of full landed properties sometimes contend with issues like vandalism (the common issues involve people damaging your bins outside), illegally parked cars blocking their driveway, and on rare occasions even loan shark activity*.
An often-overlooked benefit is that, if children or pets wander out of the house, cluster developments have security guards who might spot them on time.
*Beware of landed properties that are sold to you on a cheap and urgent basis. Ensure the previous owner hasn’t used the address, when borrowing from unlicensed moneylenders.
Finally, there’s the issue of capital gains and yields
There’s no universal answer as to whether a cluster home will appreciate better than a landed home, or by what margin. However, we have made some long term comparisons in an earlier article, which show different results in various districts.
As for rental yields, a cluster home will almost always outperform their full landed counterparts, for the simple fact of their lower quantum (gross rental yield = annual rental income / cost of property). However, pure investors seeking high yields should question why they’re looking at a cluster home, versus just investing in a condo (or two, given the price).
For in-depth reviews of cluster home developments, along with other forms of private housing, follow us on Stacked.
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