This is a question many homebuyers frequently ask when purchasing a new condo project: Is freehold or a 99-year leasehold a better choice?
While it may sound simple on the surface, it is actually a very complex and profound question. A question that is almost impossible to answer. Ask any Singapore real estate expert, and they will tell you that you’re just asking for trouble. We tried to answer this question before, but in short, it all depends on the property itself and your purchasing purpose and needs.
As Singapore is still a young nation, we have very few examples of leases running out. In fact, it was only recently in December 2020 that we saw the first residential lease expire and be reclaimed by the state. Most older leasehold condos will attempt a collective sale (Enbloc).
Therefore, in this article, we will analyze the performance of new freehold and 99-year leasehold condo projects and see if there are any trends to learn from.
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Table of Contents
Overall Performance of Freehold vs. 99-Year Leasehold, by Condo
The following is based on condos with transactions from 2014 onwards (e.g., the first new sale registration date is January 2014 or later). This is to avoid distortions by looking at the period before major cooling measures were implemented.
There is also a volume issue: there will always be far more 99-year leasehold condos than freehold ones, and the transaction volume will affect the data. However, this is unavoidable and will always be the case.
Finally, in the list below, note that we have primarily limited the data to new homes; that is, these units were initially purchased from the developer and then resold. There are some cases of resale-to-resale transactions, but these account for only 30 out of 3,254 transactions (<1%), as well as sub-sales, but these cases are few, and we believe they do not significantly skew the data.
| Project Name | Tenure | Number of Transactions | Average Profit/Loss Amount | Average Profit/Loss Percentage | Average Holding Period (Years) |
|---|---|---|---|---|---|
| 183 Longhaus | Freehold | 1 | -$125,000 | -8.3% | 4.1 |
| 24 One Residences | Freehold | 1 | -$45,000 | -5.2% | 4.0 |
| 38 Jervois | Freehold | 1 | $40,899 | 3.5% | 3.2 |
| 8 St Thomas | Freehold | 3 | -$239,233 | -10.7% | 2.2 |
| Adana @ Thomson | Freehold | 7 | $98,214 | 7.9% | 5.6 |
| Affinity At Serangoon | 99-year leasehold, from 18 May 2018 | 3 | $64,333 | 6.5% | 3.0 |
| Amber 45 | Freehold | 2 | $155,500 | 7.1% | 3.4 |
| Amber Skye | Freehold | 4 | $350,500 | 14.1% | 4.3 |
| Artra | 99-year leasehold, from 15 Feb 2016 | 14 | $212,158 | 13.6% | 3.7 |
| Ascent @ 456 | Freehold | 2 | -$111,250 | -11.3% | 3.7 |
| Bellewaters | 99-year leasehold, from 28 Aug 2013 | 14 | $252,841 | 27.5% | 5.7 |
| Bellewoods | 99-year leasehold, from 12 Aug 2013 | 13 | $168,632 | 18.5% | 5.0 |
| Bijou | Freehold | 1 | $3,992 | 0.3% | 4.9 |
| Botanique at Bartley | 99-year leasehold, from 14 Apr 2014 | 162 | $168,587 | 18.4% | 5.1 |
| Boulevard 88 | Freehold | 1 | $3,120,000 | 33.3% | 2.6 |
| Cairnhill Nine | 99-year leasehold, from 12 May 2014 | 10 | $148,350 | 3.8% | 4.6 |
| City Gate | 99-year leasehold, from 15 Apr 2014 | 23 | $81,977 | 6.3% | 5.7 |
| Coco Palms | 99-year leasehold, from 7 Jan 2008 | 178 | $191,994 | 20.6% | 5.5 |
| Commonwealth Towers | 99-year leasehold, from 7 May 2013 | 125 | $139,426 | 12.7% | 5.2 |
| Floraview | Freehold | 11 | $60,772 | 5.4% | 4.7 |
| Forest Woods | 99-year leasehold, from 5 Feb 2016 | 45 | $210,466 | 18.7% | 4.5 |
| Forte Suites | Freehold | 1 | $31,400 | 4.1% | 4.0 |
| Fourth Avenue Residences | 99-year leasehold, from 7 Mar 2018 | 1 | -$54,000 | -3.3% | 1.5 |
| Gem Residences | 99-year leasehold, from 21 Sep 2015 | 49 | $154,232 | 14.4% | 4.6 |
| Gramercy Park | Freehold | 6 | $884,815 | 13.3% | 3.5 |
| Grandeur Park Residences | 99-year leasehold, from 25 May 2016 | 55 | $195,038 | 17.2% | 4.1 |
| High Park Residences | 99-year leasehold, from 5 Nov 2014 | 307 | $187,356 | 25.6% | 4.8 |
| Highline Residences | 99-year leasehold, from 22 Jul 2013 | 25 | $210,604 | 13.7% | 4.3 |
| Hilbre 28 | 999-year leasehold, from 1 Sep 1876 | 2 | $42,221 | 3.9% | 3.1 |
| iNz Residence | 99-year leasehold, from 27 Nov 2015 | 2 | $186,500 | 22.9% | 3.5 |
| JadeScape | 99-year leasehold, from 19 Jun 2018 | 7 | $144,254 | 10.8% | 2.7 |
| Kallang Riverside | Freehold | 7 | $350,563 | 16.4% | 5.1 |
| Kandis Residence | 99-year leasehold, from 11 Jul 2016 | 2 | $119,610 | 11.9% | 3.6 |
| Kent Ridge Hill Residences | 99-year leasehold, from 10 Nov 2018 | 1 | $59,800 | 5.4% | 3.1 |
| Kingsford Waterbay | 99-year leasehold, from 3 Mar 2014 | 115 | $78,601 | 10.1% | 4.9 |
| Lake Grande | 99-year leasehold, from 9 Jun 2015 | 33 | $121,227 | 12.8% | 4.7 |
| Lake Life | 99-year leasehold, from 30 Oct 2013 | 16 | $251,000 | 27.7% | 6.6 |
| Lakeville | 99-year leasehold, from 30 Apr 2013 | 55 | $138,974 | 10.5% | 5.6 |
| Le Quest | 99-year leasehold, from 29 Aug 2016 | 13 | $117,568 | 14.3% | 3.6 |
| Liiv Residences | Freehold | 1 | $136,400 | 10.0% | 2.0 |
| Loft 33 | Freehold | 9 | $80,914 | 9.9% | 6.0 |
| Margaret Ville | 99-year leasehold, from 13 Mar 2017 | 1 | $25,000 | 2.8% | 3.1 |
| Marina One Residences | 99-year leasehold, from 1 Jul 2011 | 15 | -$6,105 | -0.9% | 4.8 |
| Marine Blue | Freehold | 3 | $139,033 | 11.1% | 4.5 |
| Martin Modern | 99-year leasehold, from 28 Sep 2016 | 20 | $474,421 | 16.1% | 3.6 |
| Neem Tree | Freehold | 4 | $26,578 | 2.2% | 4.0 |
| New Futura | Freehold | 3 | $1,223,433 | 15.2% | 2.4 |
| North Park Residences | 99-year leasehold, from 19 Mar 2015 | 76 | $192,083 | 16.5% | 4.9 |
| One Duchess | 999-year leasehold, from 27 Dec 1875 | 2 | $483,388 | 26.2% | 4.6 |
| Parc Botannia | 99-year leasehold, from 28 Dec 2016 | 22 | $129,227 | 12.9% | 3.7 |
| Parc Esta | 99-year leasehold, from 12 Jul 2018 | 4 | $204,500 | 16.5% | 3.1 |
| Parc Life | 99-year leasehold, from 13 Oct 2014 | 10 | $173,608 | 23.2% | 4.0 |
| Parc Riviera | 99-year leasehold, from 11 Nov 2015 | 116 | $140,846 | 15.0% | 3.9 |
| Park Colonial | 99-year leasehold, from 11 Oct 2017 | 8 | $189,736 | 14.1% | 3.2 |
| Park Place Residences At Plq | 99-year leasehold, from 29 Jun 2015 | 17 | $125,342 | 10.4% | 3.9 |
| Pollen & Bleu | 99-year leasehold, from 24 Sep 2012 | 4 | -$27,000 | -1.9% | 5.2 |
| Principal Garden | 99-year leasehold, from 21 Jul 2014 | 71 | $211,614 | 15.1% | 4.6 |
| Queens Peak | 99-year leasehold, from 28 Sep 2015 | 48 | $138,900 | 12.9% | 4.0 |
| Riverbank @ Fernvale | 99-year leasehold, from 10 Jul 2013 | 113 | $125,515 | 14.4% | 5.3 |
| Riverfront Residences | 99-year leasehold, from 31 May 2018 | 27 | $77,700 | 10.3% | 3.1 |
| RiverTrees Residences | 99-year leasehold, from 28 Aug 2013 | 68 | $123,629 | 11.6% | 5.9 |
| Robin Residences | Freehold | 2 | $84,000 | 7.3% | 5.3 |
| Seaside Residences | 99-year leasehold, from 18 Apr 2016 | 62 | $254,046 | 16.7% | 3.8 |
| Seventy Saint Patrick’s | Freehold | 14 | $153,506 | 8.8% | 6.1 |
| Signature at Yishun | 99-year leasehold, from 25 Aug 2014 | 12 | $161,777 | 22.7% | 4.4 |
| Sims Urban Oasis | 99-year leasehold, from 29 Jul 2014 | 147 | $116,506 | 13.3% | 4.9 |
| Singa Hills | Freehold | 9 | $12,379 | 0.7% | 4.8 |
| Sky Everton | Freehold | 2 | $34,000 | 2.1% | 2.2 |
| Sol Acres | 99-year leasehold, from 2 Jun 2014 | 34 | $184,673 | 33.1% | 4.5 |
| Sophia Hills | 99-year leasehold, from 10 Dec 2013 | 12 | $11,117 | 0.4% | 4.6 |
| Stars Of Kovan | 99-year leasehold, from 25 Feb 2015 | 36 | $158,176 | 15.2% | 4.1 |
| Stirling Residences | 99-year leasehold, from 18 Aug 2017 | 6 | $202,167 | 12.8% | 3.1 |
| Straits Mansions | Freehold | 1 | $106,000 | 6.3% | 4.3 |
| Sturdee Residences | 99-year leasehold, from 29 Jun 2015 | 18 | $130,606 | 13.2% | 4.9 |
| Sunnyvale Residences | Freehold | 4 | -$103,412 | -6.1% | 4.5 |
| Symphony Suites | 99-year leasehold, from 10 Jun 2014 | 59 | $69,199 | 7.8% | 4.6 |
| The Alp Residences | 99-year leasehold, from 3 Aug 2015 | 57 | $140,694 | 18.3% | 4.3 |
| The Amore | 99-year leasehold, from 30 Oct 2013 | 37 | $269,489 | 30.2% | 5.6 |
| The Asana | Freehold | 4 | -$25,792 | -1.6% | 3.3 |
| The Brownstone | 99-year leasehold, from 28 Apr 2014 | 9 | $209,343 | 25.6% | 4.8 |
| The Citron Residences | Freehold | 5 | -$42,276 | -3.7% | 5.5 |
| The Clement Canopy | 99-year leasehold, from 9 Mar 2016 | 44 | $232,301 | 17.5% | 4.0 |
| The Crest | 99-year leasehold, from 21 Dec 2012 | 27 | $19,300 | 2.5% | 3.7 |
| The Criterion | 99-year leasehold, from 25 Aug 2014 | 9 | $152,554 | 21.0% | 4.5 |
| The Florence Residences | 99-year leasehold, from 24 Dec 2018 | 1 | $97,000 | 7.5% | 2.5 |
| The Garden Residences | 99-year leasehold, from 30 Oct 2017 | 4 | $78,825 | 8.2% | 3.4 |
| The Hillford | 60-year leasehold, from 19 Feb 2013 | 104 | $35,972 | 8.2% | 5.7 |
| The Jovell | 99-year leasehold, from 8 Mar 2018 | 1 | $71,000 | 9.9% | 3.1 |
| The Navian | Freehold | 1 | $26,000 | 1.8% | 3.8 |
| The Panorama | 99-year leasehold, from 8 Apr 2013 | 124 | $216,976 | 19.3% | 5.3 |
| The Poiz Residences | 99-year leasehold, from 17 Nov 2014 | 88 | $186,976 | 17.9% | 4.8 |
| The Rise @ Oxley – Residences | Freehold | 3 | -$50,926 | -3.4% | 7.1 |
| The Santorini | 99-year leasehold, from 16 Oct 2013 | 80 | $67,309 | 6.9% | 5.1 |
| The Sorrento | Freehold | 16 | $69,418 | 7.4% | 5.7 |
| The Tapestry | 99-year leasehold, from 31 Jul 2017 | 29 | $130,523 | 11.3% | 3.5 |
| The Terrace | 99-year leasehold, from 30 Oct 2013 | 3 | $174,400 | 20.3% | 4.0 |
| The Tre Ver | 99-year leasehold, from 27 Mar 2018 | 5 | $137,600 | 10.5% | 2.8 |
| The Vales | 99-year leasehold, from 19 May 2014 | 21 | $206,927 | 26.9% | 4.8 |
| The Verandah Residences | Freehold | 1 | $348,888 | 20.6% | 3.6 |
| The Visionaire | 99-year leasehold, from 9 Jan 2015 | 9 | $169,123 | 22.5% | 4.2 |
| The Wisteria | 99-year leasehold, from 27 Apr 2015 | 35 | $94,085 | 12.5% | 4.9 |
| Thomson Impressions | 99-year leasehold, from 12 Jan 2015 | 32 | $153,305 | 13.8% | 4.9 |
| Tre Residences | 99-year leasehold, from 23 Apr 2014 | 26 | $126,118 | 10.1% | 4.3 |
| Treasure At Tampines | 99-year leasehold, from 29 Nov 2018 | 3 | $79,333 | 11.4% | 2.2 |
| Treasure Crest | 99-year leasehold, from 5 May 2015 | 2 | $437,940 | 55.2% | 5.3 |
| Trilive | Freehold | 15 | $21,703 | 1.4% | 5.2 |
| Twin Vew | 99-year leasehold, from 15 May 2017 | 40 | $242,965 | 16.9% | 3.4 |
| Viio @ Balestier | Freehold | 2 | $69,628 | 9.0% | 3.4 |
| Wandervale | 99-year leasehold, from 8 Dec 2014 | 7 | $302,620 | 36.9% | 3.6 |
| Waterfront @ Faber | 99-year leasehold, from 17 Sep 2013 | 16 | $178,660 | 14.6% | 5.8 |
| Westwood Residences | 99-year leasehold, from 14 Apr 2014 | 12 | $159,848 | 20.6% | 4.6 |
| Whistler Grand | 99-year leasehold, from 7 May 2018 | 3 | $162,533 | 19.3% | 3.1 |
Some key takeaways
- In the short term, 99-year leaseholds almost always outperform freeholds
- Losses on 99-year leaseholds tend to be smaller
- 99-year leaseholds seem to perform better in fringe regions
- Freehold and small projects seem to be the worst combination
1. In the short term, 99-year leaseholds almost always outperform freeholds
Overall, the results are not surprising: over a period of less than a decade, 99-year leaseholds have a significant advantage over freeholds.
Freehold condos are, on average, 15% to 20% more expensive, which means it takes longer for buyers to see gains. Remember that, fundamentally, there is no difference between a 99-year leasehold and a freehold condo other than the remaining lease term: someone buying the cheaper 99-year leasehold gets the same level of quality and facilities.
Additionally, note that since many of these condos are still quite new, this favors the 99-year leasehold projects within our considered timeframe.
If freehold condos are to have an advantage over 99-year leasehold ones, it would be in the latter half of the 99-year leasehold condo’s life. This is when the freehold status begins to make a difference, as there is no lease decay and no financing issues for subsequent buyers.
2. Losses on 99-year leaseholds tend to be smaller
The only losses for 99-year leasehold condos came from Fourth Avenue Residences (-3.3%) and Pollen & Bleu (-1.9%).
Aside from these two examples, the losses were much smaller than those of freehold condos. None of them came close to the losses seen at Ascent @ 456 (-11.3%) or 8 St Thomas (-10.7%).
This is not entirely due to the lease tenure but is related to the fact that many freehold units are high-quantum, prime-location properties; these units are harder to sell, and sometimes low transaction volumes can make resale outcomes more volatile.
If there’s one lesson to be learned from our analysis, it’s that for investors with a shorter holding period, say around five to six years, buying a 99-year leasehold condo is likely a safer bet.
3. 99-year leaseholds seem to perform better in fringe regions
Note that in the prime area of District 10, freehold condos saw an average gain of 11.1%, while 99-year leasehold condos saw a drop of 2.2%.
The main areas with the highest overall gains for 99-year leasehold condos were in the Outside Central Region (OCR), with Districts 23, 28, and 25 at the top. This is due to lower entry prices providing more room for appreciation, but also because of the buyer demographic in recent years.
A large number of buyers have been HDB upgraders, who generally cannot afford condos in the Core Central Region (CCR) or the Rest of Central Region (RCR).
Therefore, there has been stronger momentum for resale condos in the OCR, where 99-year leaseholds are more common, while condos in prime districts have lagged behind.
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4. Freehold and small projects seem to be the worst combination
Many of the freehold condos that showed losses are small boutique projects with 50 or fewer units.
For example, 183 Longhaus has only 40 units, while 24 One Residences has only 24 units. Ascent @ 456 has just 28 units.
Due to exclusivity, small boutique condos tend to be priced higher, and the small number of units means expensive maintenance fees. So, except for more affluent buyers, the resale of these units is more challenging.
Most small boutique condos also have very low transaction volumes, which makes their prices unstable.
Some real estate agents believe this has less to do with the freehold vs. 99-year leasehold status and more to do with buyer intent. Small boutique condos are more often purchased as a luxury item by wealthy buyers who are not focused on financial returns (and are therefore willing to sell at a loss once they get tired of it or want to move).
There is also the issue of discoverability. Most homebuyers have heard of or seen large projects like High Park Residences, but a small project like Ascent @ 456 is much less likely to be known. Potential buyers who encounter these projects either have to dig deep in their search or hire an experienced real estate agent who is familiar with the surrounding condos.
Upcoming collective sales might affect interest in freehold condos
As always, do not take any points here as gospel to push any narrative. The trend shows that small freehold boutique condos seem to underperform, but that doesn’t mean they all do. Every property has different factors that affect its profitability (not just lease status), and one should always aim to cover all possible bases when evaluating a potential purchase.
Despite the increase in stamp duty, collective sales are expected to rise in 2022. This is because developers are currently land-starved, and most of the collective sale sites from 2017 have been redeveloped and sold.
Some property agents suggest that developers’ attitudes toward freehold properties may influence buyer sentiment.
This is because a common sales pitch is that freehold properties are more attractive to developers or can fetch better collective sale prices. This is based on the idea that developers do not need to pay top-up premiums for the lease.
During a collective sale period, it is a good time to monitor whether the sale proceeds for freehold properties are indeed higher. For more updates on how the situation develops, please follow Anjia SG. In the meantime, you can also check out reviews of new condos.
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