Analysing the Latest Singapore Property Trends: Freehold vs 99-Year Leasehold?

The Long-Term Appeal of Freehold Condominiums

Why do they remain popular in a predominantly 99-year leasehold market?

In the Singapore property market, 99-year leasehold private condominiums make up the vast majority.

Even so, freehold condominiums continue to be highly sought after by buyers.

Based on the latest market data, freehold condos not only command higher prices, but also showcase distinct advantages in long-term value preservation, legacy planning, and en bloc potential.

Freehold Condo Prices Remain Higher, but the Gap Is Narrowing

According to recent market data:

In 2024, the average price of new freehold condos in Singapore stood at around $2,778 psf, compared to about $2,595 psf for new 99-year leasehold condos.

While freehold properties are still more expensive, the price gap between the two has narrowed significantly.

Price gap in 2015: $395 psf

Price gap in 2024: $183 psf

This means that the relative price of freehold properties is becoming much more "reasonable".

In other words, buyers only need to pay a premium of around 7% to secure a freehold tenure.

The Same Trend Applies to the Resale Market

In the resale market, freehold condos similarly command higher prices.

Average prices in 2024:

Freehold condos: $1,941 psf

99-year leasehold condos: $1,707 psf

Price gap:

2015: $311 psf

2024: $234 psf

While a gap remains, it has visibly narrowed compared to the past.

Why Do Freehold Condos Remain So Popular?

One major reason is legacy and wealth planning.

Freehold property owners can hold the asset indefinitely and pass it down across generations. In contrast, 99-year leasehold land ultimately reverts to the State once the lease expires. With property prices continually appreciating, some parents choose to purchase freehold condos as a lasting legacy for their children.

Secondly, freehold condominiums are more resilient against lease decay.

As buildings age, 99-year leasehold properties face the issue of lease decay. The shorter the remaining lease, the greater the impact on property value.

Freehold condos, having no lease expiry, are largely immune to this concern.

Data shows that for condos over 40 years old:

Average freehold price: $1,730 psf

Average 99-year leasehold price: $1,173 psf

Over the past 5 years:

Freehold prices rose by 32.2%

99-year leasehold prices rose by 26.9%

Meanwhile, the price gap widened from:

2015: $320 psf

2024: $557 psf

This widening gap illustrates that freehold properties demonstrate superior long-term capital preservation.

Another advantage of freehold condos is their en bloc (collective sale) potential. Freehold developments are generally favoured by developers in the collective sale market.

Reasons include: developers do not need to pay land betterment charges to top up the lease, they can immediately redevelop the site into a new freehold project, and market demand for freehold homes remains robust.

More importantly, all Government Land Sales (GLS) sites are released on 99-year leases.

As a result, an en bloc sale is typically the only avenue for developers to acquire freehold land. This makes freehold land parcels exceptionally rare and prized.