"99-Year New Launch Condos Are Overpriced" Looking At Freehold Vs Leasehold Data Since 2014

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It’s a common question many homebuyers ask when looking to buy a new launch condo: is freehold or leasehold a better choice?
While it may sound like a simple question on the surface, it is actually a very nuanced and deep one. One that is nearly impossible to answer. Ask any real estate expert, and they’ll tell you it’s like opening up a can of worms. We have attempted to answer it here, but in short, it all depends on the property.
It probably also doesn’t help that due to Singapore’s young age, we have a few examples of what happens when a lease runs out. In fact, it was only recently in December of 2020 when we saw the first residential lease expiry, and repossession by the state. And most leasehold condos that are getting old will attempt to go for a collective sale.
Therefore in this video, we will take a look at how freehold and leasehold new launch condos have performed, and see if there are any trends to pick up on.
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Chapters
00:00 - Intro
02:10 - Leasehold almost always outperforms freehold, over a shorter term
03:58 - Losses from leasehold tend to be smaller
05:43 - Leasehold seems to fare better in fringe districts
07:06 - Freehold and boutique seem to be the worst combination
08:51 - Upcoming en-bloc sales could impact interest in freehold condos
10:09 - Outro
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Stacked is an online editorial aimed at helping Singapore home buyers, sellers and renters make better decisions. By regularly conducting research and publishing our findings, we hope to give our readers a much better perspective on buying, selling or renting Singapore real estate.
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[@StackedHomes]

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[@fellim3600]

Hey! Really enjoyed your videos. Can you comment on buying new Launches between ccr rcr and ocr region?

[@Coolwater_TED]

@@fellim3600 actually is rather subjective and how deep is your pocket. No one can tell u which is better

[@StackedHomes]

@@fellim3600 Hey! Yes this would really depend on your objectives and budget more than anything else 👌

[@malcolmwong5510]

How about if u did this comparison for resale 99 vs resale freehold. Eliminate the new launch effect.

[@aissws]

You would think the answer is simple but i swear this topic is never a one is better than the other Ryan you are the king of opinions love u

[@sepa3740]

Fantastic analysis & articulation as usual keep up the great work sir!

[@StackedHomes]

Thank you kindly!

[@forumics]

i think that the biggest issue here is that mindsets can change overnight. previously the thought was always that HDB will always get enbloc until the minister came out to clarify then the mindset changed that HDB will be $0 after 99 years. while it's true that lease hold condos usually get enbloc after 40 years, nobody can predict if this will hold true 10 or 20 years down the road and if the mindset changes that leasehold condos become worthless like HDB after 99 years, then the depreciation would be significantly greater than HDB and as such, cannot be classified as an asset but FH condos will always be assets even if they don't get enbloc.

[@deni0709ify]

99 years, That's next generation's problem! Unless you live another 100 years. You should be happy if it happens. Nobody worries about his lease at 100+ years old.

[@forumics]

@@deni0709ify this is very short term thinking isn't it? You will work your whole life and at the end would you rather pass on the fruits of your labour to your children or to the government? Also many people will end up with no CPF upon retirement because all the money would have depreciated after their flats lease decay. Considering that even HDB flats are touching 1m, just think about how much more tax you are actually giving to the government above the visible taxes like gst, petrol, water, alcohol, income, vechicular and property tax. Not counting sugar and carbon taxes which are currently in the pipeline.

[@cathhl2440]

@@forumics Sell and distribute the money ah. ??? I don’t think my kids want a 50 YO flat.

[@BomBomm12345]

Condos aside - quite certain freehold landed easily outperforms leasehold landed

[@StackedHomes]

Yes, it's true. We've looked at the data before.

[@musico3415]

Would you buy a 20 years old freehold condo/apartment, or a 5 years old 99-leasehold condo which cost twice in psf within the same district, such as district 12?

[@meilengwong4578]

Thank you! This is so useful. For those who are above 50years of age and for own stay, would you recommend freehold or leasehold? Thanks.

[@StackedHomes]

Hey Mei Leng Wong, it's not so much whether you should go for freehold or leasehold. It's what you find that fits your own stay requirements. If you find one that is freehold and within your budget, tha'ts great. Same applies for leasehold too, so long as they meet your objectives in the long-term 👌

[@yipkf18]

Very details explanation

[@StackedHomes]

Glad you liked it!

[@Potomacstud]

Thank you

[@StackedHomes]

You're welcome! 😄

[@alisonwang3446]

wonderful

[@StackedHomes]

Thank you!

[@yuntingtan5855]

I have seen many resale freehold condos that are cheaper than a brand spanking new 99- leasehold condo, in the same location. What do you think about that? It feels crazy to spend more for a 99- new condo vs a 10-year-old FH or 999- condo next door. In some cases they have the same psf. Does this mean 99- LH new condos are overpriced? @.@ eg: Carabelle vs Whistler Grand or Clavon.

[@StackedHomes]

Hey! Well, there are multiple factors here, but we can see why some are willing to pay more for a leasehold condo that's newer compared to a freehold in the same area that's older. Having modern facilities is also a draw, e.g. tenants would prefer a newer condo and are willing to pay greater rent for it. Or for older developments, perhaps the unit sizes are big which is why the $PSF may be the same, but the overall price is higher which puts it out of reach to many due to the cooling measures and higher downpayment requirements.

[@gotmyonu1027]

What about govt buy back condos for building facilities? How does FH or LH plays?

[@StackedHomes]

Hey! Sorry could you clarify your question? We're not too sure what you mean. Thanks!

[@Coolwater_TED]

@@StackedHomes He is trying to say during enbloc , FH or LH got better return if I not wrong

[@gotmyonu1027]

@@Coolwater_TED yeah... You read my thoughts.

[@liamporter1137]

It is inhuman for any government to kick people out when the lease is up, even though it is legal. Legality is being set by the government. Just imagine paying hundreds of thousands or few millions for a 99 leasehold and then become worthless when the lease is up. What type of heartless government does that????

[@sgoadmin7294]

no need to be too guarded or reserved for yur analyses! most of the leasehold properties are blatantly overpriced now in Sgp! 🙄 same w those leasehold property in China - crash already imminent! 👎