Analysis

Freehold VS Leasehold Landed Property: Exploring The Gap And How Prices Have Moved Over The Years

  • September 29, 2021
  • 6 min read
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Ryan J

A seasoned content strategist with over 17 years in the real estate and financial journalism sectors, Ryan has built a reputation for transforming complex industry jargon into accessible knowledge. With a track record of writing and editing for leading financial platforms and publications, Ryan’s expertise has been recognised across various media outlets. His role as a former content editor for 99.co and a co-host for CNA 938’s Open House programme underscores his commitment to providing valuable insights into the property market.

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Dy Francisco III
Dy Francisco III
2 years ago

If the house on leasehold landed property is the MAXIMUM allowable based on regulations, then the value of the property is in the built-up space (not the land) because it is often not worth it to demolish the house to build a new house of the same size. Therefore, leasehold landed property should be compared to other leasehold properties like HDB flats and leasehold condos.

HDB flats are selling for as high as $1,170 per sq ft. This should be used as comparable (or point of reference) for leasehold landed property (if, as described above, it is the maximum built-up area) with the land included at no extra charge.

Comparing freehold and leasehold landed property is an “apple-and-oranges” comparison because the former is bought for investment while the latter is for housing (like HDB and leasehold condo).

Stacked Homes
Admin
2 years ago

Hi! Thanks for your feedback! This article was written for those who want to stay in landed homes only, and we were asked about the performance of the different types of landed homes in Singapore. It was basically a choice between freehold/leasehold landed, or freehold/leasehold strata landed and so we presented the information as such since the alternative was not a leasehold condo or HDB (in a lot of cases, these were people who were also upgrading from HDBs). For another article, we can compare the performance of a leasehold landed home or leasehold condo if we do have such requests. Hope this helps shed some perspective on the choice of data used

Francisco Dy
Francisco Dy
2 years ago
Reply to  Stacked Homes

Thanks for the feedback!

Choosing where to stay (landed vs stata, freehold vs leasehold) is only one issue. The other issue is price or value. Since all of them are basically housing it is appropriate for valuation purposes compare them to determine which one is better “value for money”. Valuation based on direct comparison (same type of property in the same estate) should be counter-checked with a “technical valuation” (properties in vicinity adjusted for type and land tenure).

Those upgrading from HDB should consider both condos (leasehold and freehold) and leasehold landed property. It some cases the latter is better “value for money” with more space and cheaper monthly maintenance (no lifts. common areas to maintain, security, etc.) and also get land for free parking.

Price performance of different types of properties is helpful. What is also helpful is a discussion of valuation. What are the SISV valuation principles and practice guidelines buyers and sellers of property should be aware of since most real estate deals involve a mortgage which requires a valuation.

Another thing that will be helpful to property buyers and sellers is to highlight the responsibilities/constraints of licensed real estate agents under the Code of Ethics for Professional Client Care (CEPCC) from CEA. Many many not be aware that a licensed agent cannot talk about valuation, “fair price”, “fair value”, valuation methodologies, “technical valuation”, difference between “fair price” and “market price”, etc, unless he/she is also a licensed valuer.

Jason
Jason
2 years ago

Any idea whats the ratio of freehold to leasehold landed property in singapore?

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