Leasehold vs Freehold

3 types of condo tenures in Singapore

Freehold
99-year leasehold
999-year leasehold

There are three types of condo tenures in Singapore - freehold, 99-year leasehold and 999-year leasehold. The 999-year leasehold developments are in essence freehold properties.

The common understanding is that freehold properties can be held indefinitely by the buyer, while 99-year leasehold properties will revert back to the state after the tenure ends. The 999-year leasehold properties also technically revert back to the state after the tenure ends.

But if we take the 999-year leasehold tenure out of the picture, how do the freehold and 99-year leasehold tenures measure up against each other?

The common conclusions is that:

Freehold fetches better value
Leasehold fetch better rental yields
Freehold has theoretical advantages rather than practical advantages

These are the most common conclusions many property buyers arrive at after researching the advantages and disadvantages of leasehold and freehold properties in Singapore. Let’s explore further.

Which Is better – Leasehold or Freehold ?

Scotts Square vs The Orchard Residences

Both developments are about 400m apart

Development	Scotts Square	The Orchard Residences
Tenure	Freehold	99 Yr Leasehold
Launch Date	Jul 2007	Mar 2007
Highest Achieved at Launch	$4,701 Psf	$5,000 Psf
Avg Price at Launch	$4,002 Psf	$3,316 Psf
Avg Price in 2020	$3,394 Psf	$3,046 Psf
% Change	-15%	-8%

In this case 99 yr leasehold lose lesser compare to a FH.

Next let us take a look at another comparison..

D13: Blossoms@Woodleigh (FH) vs 8@Woodleigh (99yr)

Both developments are situated beside each other

For this scenario, 99yr performs better than a FH from 2009 to 2020.

Next…

D18 : Ris Grandeur (FH) vs Elias Green (99yr)

Both developments are situated at about 600m apart

Again, 99 yr performs better than a FH from 2010 to 2020.

D18 : Sunhaven (FH) vs Savannah Condopark (99yr)

Both developments are situated beside each other

From 2002 to 2020, 99y performs better than a FH.

Which has a better rental Yield?
99yr or FH ?

Value of Leasehold vs Freehold

$psf Median Prices (including new sale, resale and subsale) for Bukit Timah area

In the Bukit Timah area the growth from 2000 to 2020 clearly a 99yr is better than a FH.

Is a leasehold property better to own than a Freehold property???

Next explore more….

Is FH property a better Wealth Accumulator than 99LH property over long term horizon?

Average Transaction volume by tenure (2013- 2020)

Average transaction volume per mth: 99-yr LH: 1,218 units Freehold: 528 units

Transaction Volume of Freehold is 1.9x < 99-yr LH

Freehold units are very scarce. Great opportunities to accumulate new Freehold properties now.

Case Study: FH & 99LH Resale Condos Spanish Village (FH) vs Hollandswood Court (99LH)

Both development are about 600m apart.

Spanish Village (FH) 226 units Completed in 1987

Hollandswood Court (99LH) 27 units Completed 1978

Higher Capital Gain for Freehold Condos over a long term period

Do FH property has a better Wealth Retention than 99LH property over long term horizon?

•Case Study 1: What is the Price Disparity?

•FH & 99LH Resale Condos along Holland Road & next to Holland Village MRT: Willyn Ville (FH) vs The Merasaga (99LH)

•Both are about 100m apart

FH versus 99LH Condos in the Holland Enclave (next to Holland Village MRT Station)

Willyn Ville (FH) 33 units Completed 1982

The Merasaga (99LH) 116 units Completed 1995

FH property values appreciate more with time

20 years ago FH is $819 LH is $853 Price disparity is -4%

Recent transaction: FH is $1755 LH is $1584 Price disparity is 10%

Case Study 2: What is the Price Disparity?

FH & 99LH Resale Condos along Holland Road, walking distance to Holland Village MRT Station:

Viz At Holland (FH) vs Hollandswood Court (99LH)

Both are about 500m apart

Viz At Holland (FH) 165 units Completed 2008

Hollandswood Court (99LH) 27 units Completed 1978

Freehold properties is a great vehicle for Wealth Retention

12 years ago FH is $1,212 psf LH is $648 psf Price disparity is 46%

Recent Transaction: FH is $1,684 psf LH is $762 psf Price disparity is 54%

What is your take?

Leasehold or Freehold?