Comparing Leasehold vs Freehold Properties in Singapore

Not sure whether to buy a leasehold or freehold property in Singapore? This guide breaks down the key differences to help you make an informed choice.

kokilac

Jul 14, 2025 - 16:12

Comparing Leasehold vs Freehold Properties in Singapore

When buying property in Singapore, one of the biggest decisions you'll face is choosing between leasehold and freehold tenure. While both offer homeownership, the differences in ownership duration, cost, value retention, and investment potential can significantly influence your long-term returns and lifestyle goals.

In this article, we compare leasehold and freehold properties to help you understand which suits your needs best.

What Is a Freehold Property?

A freehold property grants the owner indefinite ownership of the land and unit. There is no expiration date, which means you or your heirs can hold the property forever, barring government acquisitions.

Freehold properties are usually private residential units, including landed homes and some condos.

What Is a Leasehold Property?

A leasehold property is owned for a fixed term, commonly 99 years. Some older properties may have 999-year leases, which are practically considered as good as freehold. Upon expiry, the land reverts to the state, unless the lease is renewed or extended.

Most HDB flats, Executive Condominiums (ECs), and many private condos are leasehold.

Key Differences: Leasehold vs Freehold

Criteria	Leasehold (99 yrs)	Freehold
Ownership Duration	99 years (typically)	Perpetual
Resale Value	Decreases as lease shortens	More stable over time
Price	More affordable	Typically more expensive
Availability	More common	Less common
Financing	Limited if lease < 30 years	Easier to finance
En Bloc Potential	Higher due to shorter lease	Lower, but still possible

Cost Comparison

Freehold properties generally cost 1525% more than comparable leasehold ones due to the perpetual ownership advantage.

Example:

Leasehold condo: $1,200 psf
Freehold condo in same area: $1,400$1,500 psf

This price difference can affect affordability, investment returns, and mortgage eligibility.

Value Over Time

Leasehold properties lose value as the lease shortens, especially after the 40-year mark. Banks may not provide full loans for properties with less than 30 years remaining, and CPF usage is also restricted.

Freehold properties retain value better over time and are often seen as safer long-term investments.

En Bloc Potential

Leasehold propertiesespecially those with 3050 years of lease leftare more attractive for en bloc sales. Developers prefer these sites as they can redevelop and renew the lease.

Freehold properties can also go en bloc, but owners may demand higher compensation, making deals harder to close.

Financing & CPF Usage

Leasehold:

CPF usage restricted if lease is < 60 years
Loan-to-value (LTV) reduced if lease is < 30 years

Freehold:

No lease restrictions, easier to secure loans
Full CPF usage allowed

Always check with your bank and CPF Board before committing.

Rental Yield

Leasehold properties in well-connected locations can provide higher rental yields due to their lower purchase price.

Freehold properties are more attractive to owner-occupiers and long-term investors focused on capital preservation rather than yield.

Ideal Buyers for Each Tenure

Leasehold:

Buyers with a tighter budget
Short- to mid-term investors
Younger couples using CPF
Buyers focused on location over tenure

Freehold:

Buyers with long-term family plans
Investors who value capital protection
Wealth preservation-focused purchasers
Legacy planning for future generations

Misconceptions

Myth 1: Freehold is always better.

Not always true. If your priority is rental income or a shorter holding period, leasehold may offer better returns.

Myth 2: Freehold never loses value.

Freehold values can also fluctuate due to market demand, property age, and maintenance.

Myth 3: Leasehold properties are bad investments.

Many leasehold properties have appreciated significantly due to location, amenities, and infrastructure improvements.

Conclusion

Both leasehold and freehold properties have their merits depending on your objectives. If youre buying for legacy and long-term wealth preservation, freehold may be worth the premium. If youre looking at affordability, shorter holding periods, or higher rental yields, leasehold could be the smarter choice.