Navigating Singapore’s Property Market: Freehold vs Leasehold

As property prices are on the rise in Singapore, prospective homeowners are beginning to carefully consider their investment options. One crucial factor that often weighs on the minds of buyers is whether to opt for a freehold or leasehold property. Whether you choose a freehold or leasehold property, the key is to find a home that meets your needs and fits your budget, ensuring a wise investment for the future. If this is what you are considering, you definitely want to finish reading this article. 

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The allure of owning a piece of land outright, with no lease constraints, makes freehold properties an attractive choice for many. They offer a sense of security and permanence, allowing owners to pass on their legacy to future generations. On the other hand, leasehold properties, typically offered on a 99-year lease, come with their own set of benefits. 

The decision between freehold and leasehold ultimately depends on individual preferences and long-term goals. While freehold properties offer greater control and potential for appreciation in the long term, leasehold properties may provide better value for money in the short term.

Let’s take a look at how similar properties in the Core Central Region (CCR) perform when comparing freehold (Miro) vs leasehold (Rochelle at Newton).

Based on the above chart, we can see that Miro, while being a freehold property, actually lost money over the past 10 years when compared to a 99 years leasehold property (Rochelle at Newton). 

How about if we look at properties that are within the Outside Central Region (OCR)? While the freehold property (The Gale) doesn’t lose money over the same time horizon, we can see that the 99 years leasehold property (Palm Isles) actually performs better at 43% gain as compared to 17%. 

Ultimately, this still depends on your end goal of the purchase of the property which can affect both your finances and your future. If it was up to me, I would be asking myself the following questions:

• How long do I wish to stay in this property? 
• Am I buying this for my own stay or investment purposes? 

As property prices continue to be on the rise, it is crucial to make a well informed decision that aligns with your long term goals and financial situation. If you are still unsure, or if you are leaning towards a freehold property but wish to be aware of potential pitfalls and have a solid exit plan in place, don’t hesitate to reach out. As an aspiring property agent with a deep understanding of Singapore’s real estate market, I am happy to help you navigate the complexities and allow you to purchase your next home with confidence. 

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