TENURE CHOICE - FACTORS AFFECTING INVESTORS' CHOICE OF INVESTMENT IN SINGAPORE PRIVATE RESIDENTIAL PROPERTY

Abstract

This dissertation was undertaken to study the factors affecting the investors' choice of tenure. In general, freehold properties are viewed as a preferable choice of investment, investors prefer freehold properties to leasehold properties. This is due to the legal and financial constraints tied to leasehold properties. As the remaining leases of leasehold properties shorten, it is more difficult to dispose them as compared with freehold properties. In addition, 99-year leasehold prices decrease at a faster rate than freehold properties with weak market sentiment. Given the attractions and drawbacks of both tenure, there are different underlying factors affecting the investors' tenure choice. Hence, a survey was conducted to examine the different underlying factors affecting the investors' tenure choice. Chisquare analysis and factor analysis were used to test the validity of the hypothesis. The findings of the study show that there are different factors affecting the investors' tenure choice. For freehold tenure, greater emphasis is placed on locational factors and age of condominium are the least importance affecting their choice. In contrast, investors investing in leasehold property are more concerned about the purchase price and age of condominium. Implications and recommendations to developers are also discussed in this study to enhance their understanding in the investors' preference of condominiums