Freehold Vs Leasehold: How Have New Launch Condos Performed Since 2014

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 piece, 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.

Overall performance of freehold versus leasehold, by condo

The following is based on condos that saw transactions from 2014 onward (as in, the first new sales were registered on January 2014 or later). 

This is to avoid any distortions, from the period before major cooling measures kicked in. 

There is also an issue of volume: there will always be many more leasehold condos than there are freehold condos, and the volume of transactions can impact the data. However, this is unavoidable and will always be the case. 

Finally, for the list below, note that we have confined the data to predominantly new units; that is, the units were initially bought from the developer, and then resold. There are some cases of resale to resale, but they only make up 30 out of 3,254 transactions (<1%) as well as cases of sub-sales, but these are small enough that we feel they don’t seriously disrupt the numbers. 

112 rows

Project	Tenure	Buy/sell transactions	Average gain / loss	Average % gain / loss	Average holding period
183 Longhaus	Freehold	1	-$125,200	-8.3%	4.1 yrs
24 One Residences	Freehold	1	-$45,000	-5.2%	4.0 yrs
38 Jervois	Freehold	1	$40,899	3.5%	3.2 yrs
8 Saint Thomas	Freehold	3	-$239,233	-10.7%	2.2 yrs
Adana @ Thomson	Freehold	7	$98,214	7.9%	5.6 yrs
Affinity At Serangoon	99 yrs from 18/05/2018	3	$64,333	6.5%	3.0 yrs
Amber 45	Freehold	2	$155,500	7.1%	3.4 yrs
Amber Skye	Freehold	4	$350,500	14.1%	4.3 yrs
Artra	99 yrs from 15/02/2016	14	$212,158	13.6%	3.7 yrs
Ascent @ 456	Freehold	2	-$111,250	-11.2%	3.7 yrs
Bellewaters	99 yrs from 28/08/2013	14	$252,841	27.5%	5.7 yrs
Bellewoods	99 yrs from 12/08/2013	13	$168,632	18.5%	5.0 yrs
Bijou	Freehold	1	$3,992	0.3%	4.9 yrs
Botanique At Bartley	99 yrs from 14/04/2014	162	$168,587	18.4%	5.1 yrs
Boulevard 88	Freehold	1	$3,120,000	33.3%	2.6 yrs
Cairnhill Nine	99 yrs from 12/05/2014	10	$148,350	3.8%	4.6 yrs
City Gate	99 yrs from 15/04/2014	23	$81,977	6.3%	5.7 yrs
Coco Palms	99 yrs from 07/01/2008	178	$191,994	20.6%	5.5 yrs
Commonwealth Towers	99 yrs from 07/05/2013	125	$139,426	12.7%	5.2 yrs
Floraview	Freehold	11	$60,772	5.4%	4.7 yrs
Forest Woods	99 yrs from 05/02/2016	45	$210,466	18.7%	4.5 yrs
Forte Suites	Freehold	1	$31,400	4.1%	4.0 yrs
Fourth Avenue Residences	99 yrs from 07/03/2018	1	-$54,000	-3.3%	1.5 yrs
Gem Residences	99 yrs from 21/09/2015	49	$154,232	14.4%	4.6 yrs
Gramercy Park	Freehold	6	$884,815	13.3%	3.5 yrs
Grandeur Park Residences	99 yrs from 25/05/2016	55	$195,038	17.2%	4.1 yrs
High Park Residences	99 yrs from 05/11/2014	307	$187,356	25.6%	4.8 yrs
Highline Residences	99 yrs from 22/07/2013	25	$210,604	13.7%	4.3 yrs
Hilbre28	999 yrs from 01/09/1876	2	$42,221	3.9%	3.1 yrs
Inz Residence	99 yrs from 27/11/2015	2	$186,500	22.9%	3.5 yrs
Jadescape	99 yrs from 19/06/2018	7	$144,254	10.8%	2.7 yrs
Kallang Riverside	Freehold	7	$350,563	16.4%	5.1 yrs
Kandis Residence	99 yrs from 11/07/2016	2	$119,610	11.8%	3.6 yrs
Kent Ridge Hill Residences	99 yrs from 10/11/2018	1	$59,800	5.4%	3.1 yrs
Kingsford Waterbay	99 yrs from 03/03/2014	115	$78,601	10.1%	4.9 yrs
Lake Grande	99 yrs from 09/06/2015	33	$121,227	12.8%	4.7 yrs
Lake Life	99 yrs from 30/10/2013	16	$251,000	27.7%	6.6 yrs
Lakeville	99 yrs from 30/04/2013	55	$138,974	10.5%	5.6 yrs
Le Quest	99 yrs from 29/08/2016	13	$117,568	14.3%	3.6 yrs
Liiv Residences	Freehold	1	$136,400	10.0%	2.0 yrs
Loft 33	Freehold	9	$80,914	9.9%	6.0 yrs
Margaret Ville	99 yrs from 13/03/2017	1	$25,000	2.8%	3.1 yrs
Marina One Residences	99 yrs from 01/07/2011	15	-$6,105	0.9%	4.8 yrs
Marine Blue	Freehold	3	$139,033	11.1%	4.5 yrs
Martin Modern	99 yrs from 28/09/2016	20	$474,421	16.1%	3.6 yrs
Neem Tree	Freehold	4	$26,578	2.2%	4.0 yrs
New Futura	Freehold	3	$1,223,433	15.2%	2.4 yrs
North Park Residences	99 yrs from 19/03/2015	76	$192,083	16.5%	4.9 yrs
One Duchess	999 yrs from 27/12/1875	2	$483,388	26.2%	4.6 yrs
Parc Botannia	99 yrs from 28/12/2016	22	$129,227	12.9%	3.7 yrs
Parc Esta	99 yrs from 12/07/2018	4	$204,500	16.5%	3.1 yrs
Parc Life	99 yrs from 13/10/2014	10	$173,608	23.2%	4.0 yrs
Parc Riviera	99 yrs from 11/11/2015	116	$140,846	15.0%	3.9 yrs
Park Colonial	99 yrs from 11/10/2017	8	$189,736	14.1%	3.2 yrs
Park Place Residences At Plq	99 yrs from 29/06/2015	17	$125,342	10.4%	3.9 yrs
Pollen & Bleu	99 yrs from 24/09/2012	4	-$27,000	-1.9%	5.2 yrs
Principal Garden	99 yrs from 21/07/2014	71	$211,614	15.1%	4.6 yrs
Queens Peak	99 yrs from 28/09/2015	48	$138,900	12.9%	4.0 yrs
Riverbank @ Fernvale	99 yrs from 10/07/2013	113	$125,515	14.4%	5.3 yrs
Riverfront Residences	99 yrs from 31/05/2018	27	$77,700	10.3%	3.1 yrs
Rivertrees Residences	99 yrs from 28/08/2013	68	$123,629	11.6%	5.9 yrs
Robin Residences	Freehold	2	$84,000	7.3%	5.3 yrs
Seaside Residences	99 yrs from 18/04/2016	62	$254,046	16.7%	3.8 yrs
Seventy Saint Patrick'S	Freehold	14	$153,506	8.8%	6.1 yrs
Signature At Yishun	99 yrs from 25/08/2014	12	$161,777	22.7%	4.4 yrs
Sims Urban Oasis	99 yrs from 29/07/2014	147	$116,506	13.3%	4.9 yrs
Singa Hills	Freehold	9	$12,379	0.7%	4.8 yrs
Sky Everton	Freehold	2	$34,000	2.1%	2.2 yrs
Sol Acres	99 yrs from 02/06/2014	34	$184,673	33.1%	4.5 yrs
Sophia Hills	99 yrs from 10/12/2013	12	$11,117	0.4%	4.6 yrs
Stars Of Kovan	99 yrs from 25/02/2015	36	$158,176	15.2%	4.1 yrs
Stirling Residences	99 yrs from 18/08/2017	6	$202,167	12.7%	3.1 yrs
Straits Mansions	Freehold	1	$106,000	6.3%	4.3 yrs
Sturdee Residences	99 yrs from 29/06/2015	18	$130,606	13.2%	4.9 yrs
Sunnyvale Residences	Freehold	4	-$103,412	-6.0%	4.5 yrs
Symphony Suites	99 yrs from 10/06/2014	59	$69,199	7.8%	4.6 yrs
The Alps Residences	99 yrs from 03/08/2015	57	$140,694	18.3%	4.3 yrs
The Amore	99 yrs from 30/10/2013	37	$269,489	30.2%	5.6 yrs
The Asana	Freehold	4	-$25,792	-1.6%	3.3 yrs
The Brownstone	99 yrs from 28/04/2014	9	$209,343	25.6%	4.8 yrs
The Citron Residences	Freehold	5	-$42,276	-3.7%	5.5 yrs
The Clement Canopy	99 yrs from 09/03/2016	44	$232,301	17.5%	4.0 yrs
The Crest	99 yrs from 21/12/2012	27	$19,300	2.5%	3.7 yrs
The Criterion	99 yrs from 25/08/2014	9	$152,554	21.0%	4.5 yrs
The Florence Residences	99 yrs from 24/12/2018	1	$97,000	7.5%	2.5 yrs
The Garden Residences	99 yrs from 30/10/2017	4	$78,825	8.2%	3.4 yrs
The Hillford	60 yrs from 19/02/2013	104	$35,972	8.2%	5.7 yrs
The Jovell	99 yrs from 08/03/2018	1	$71,000	9.9%	3.1 yrs
The Navian	Freehold	1	$26,000	1.8%	3.8 yrs
The Panorama	99 yrs from 08/04/2013	124	$216,976	19.3%	5.3 yrs
The Poiz Residences	99 yrs from 17/11/2014	88	$186,976	17.9%	4.8 yrs
The Rise @ Oxley - Residences	Freehold	3	-$50,926	-3.4%	7.1 yrs
The Santorini	99 yrs from 16/10/2013	80	$67,309	6.9%	5.1 yrs
The Sorrento	Freehold	16	$69,418	7.4%	5.7 yrs
The Tapestry	99 yrs from 31/07/2017	29	$130,523	11.3%	3.5 yrs
The Terrace	99 yrs from 30/10/2013	3	$174,400	20.3%	4.0 yrs
The Tre Ver	99 yrs from 27/03/2018	5	$137,600	10.5%	2.8 yrs
The Vales	99 yrs from 19/05/2014	21	$206,927	26.9%	4.8 yrs
The Verandah Residences	Freehold	1	$348,888	20.6%	3.6 yrs
The Visionaire	99 yrs from 09/01/2015	9	$169,123	22.5%	4.2 yrs
The Wisteria	99 yrs from 27/04/2015	35	$94,085	12.5%	4.9 yrs
Thomson Impressions	99 yrs from 12/01/2015	32	$153,305	13.8%	4.9 yrs
Tre Residences	99 yrs from 23/04/2014	26	$126,118	10.1%	4.3 yrs
Treasure At Tampines	99 yrs from 29/11/2018	3	$79,333	11.4%	2.2 yrs
Treasure Crest	99 yrs from 05/05/2015	2	$437,940	55.1%	5.3 yrs
Trilive	Freehold	15	$21,703	1.4%	5.2 yrs
Twin Vew	99 yrs from 15/05/2017	40	$242,965	16.9%	3.4 yrs
Viio @ Balestier	Freehold	2	$69,628	9.0%	3.4 yrs
Wandervale	99 yrs from 08/12/2014	7	$302,620	36.9%	3.6 yrs
Waterfront @ Faber	99 yrs from 17/09/2013	16	$178,660	14.6%	5.8 yrs
Westwood Residences	99 yrs from 14/04/2014	12	$159,848	20.6%	4.6 yrs
Whistler Grand	99 yrs from 07/05/2018	3	$162,533	19.3%	3.1 yrs

Some key points to note

• Leasehold almost always outperforms freehold, over a shorter term
• Losses from leasehold tend to be smaller
• Leasehold seems to fare better in fringe districts 
• Freehold and boutique seem to be the worst combination

1. Leasehold almost always outperforms freehold, over a shorter term

Overall, the results shouldn’t be surprising; leasehold has a tremendous advantage over a freehold counterpart, over a time span of less than a decade. 

Freehold properties cost 15 to 20 per cent more on average, which means it takes much longer for buyers to see gains. Remember that fundamentally, there’s no difference between a leasehold and a freehold condo other than the remaining lease: someone buying a cheaper leasehold gets the same level of quality and facilities. 

Also, note that because many of the condos are still considered rather new, this works out to the benefit of the leasehold projects because of the timeframe that we are looking at now.

If a freehold condo is ever going to outshine a leasehold counterpart, it will probably be in the last half of the leasehold condo’s lifespan; this is really when the freehold status starts to have an effect, as there’s no lease decay and no financing issues for subsequent buyers.

2. Losses from leasehold tend to be smaller

The only losses on the leasehold side were from Fourth Avenue Residences (-3.3 per cent), and Pollen & Bleu (-1.9 per cent). 

Apart from being the only two examples, these losses are considerably smaller than the losses from freehold counterparts. None of them come close to the kind of losses in Ascent @ 456 (-11.3 per cent), or 8 Saint Thomas (-10.7 per cent). 

This isn’t entirely due to the lease alone; it’s related to the fact that many of the freehold units are high quantum, prime region properties; these units are harder to sell, and the sometimes low volume of transactions can make resale results more volatile. 

If there’s a lesson here, it’s that investors holding on for shorter periods, say around five or six years, it may be safer picking a leasehold option. 

3. Leasehold seems to fare better in fringe districts

Note that in the prime area of district 10, freehold properties saw an average gain of 11.1 per cent, while leasehold counterparts fell 2.2 per cent. 

The highest overall gains for leasehold were mainly in the Outside of Central Region (OCR), with districts 23, 28, and 25 at the top. It’s partly that a lower entry price provides more room for appreciation, but it’s also because of the buyer demographic in the last few years. 

A large number of buyers have been HDB upgraders, who are typically priced out of the Core Central Region (CCR) or city fringe. As such, resale condos in the OCR – where leasehold is more common – have seen a stronger pick-up, whereas prime region condos have fallen behind.

4. Freehold and boutique seem to be the worst combination

Many of the freehold projects showing losses are boutique condos, with 50 units or fewer. 

For example, 183 Longhaus has only 40 units, while 24 One Residences has just 24 units. Ascent @ 456 has just 28 units. 

Boutique condos tend to come with higher price points, due to the exclusivity; and the smaller number of units often means pricey maintenance fees. As such, these units are more challenging to re-sell, except to the more affluent buyers. 

There’s also a low volume of transactions in most boutique units, making the price quite volatile. 

Some realtors opine that this has nothing to do with freehold or leasehold status, but the intent of the buyers. Boutique condos are more often purchased as an indulgence by affluent home buyers, and these buyers are not focused on financial gains (hence their willingness to sell even at a loss, once they’re tired of it or need to move on). 

There's also the matter of discoverability. Most buyers would have heard or seen bigger projects like High Park Residences, but a small one like Ascent @ 456 is just much less likely to be known. For potential buyers to come across these projects will require them to dig deep when searching, or have experienced real estate agents that are very familiar with the surrounding projects.

Upcoming en-bloc sales could impact interest in freehold condos

As always though, don't take any of the points here as gospel to push any narrative. As much as the trend shows that smaller freehold boutiques seemingly don't perform as well, it also doesn't mean that they all don't do well. Every property has different factors that affect its profitability (not just the lease status), and you'd always want to cover all grounds possible when evaluating a potential purchase.

2022 is expected to see a rise in en-bloc sales, despite higher stamp duties. This is because developers are currently land-starved, with most of the 2017 collective sale sites now redeveloped and sold. 

Some realtors have remarked that the attitudes of developers, toward freehold properties, could impact buyer sentiment. 

That’s because a common sales pitch is that freehold property is more attractive to developers, or can fetch a better en-bloc price. This is on the basis that developers don’t have to pay for a top-up on the lease.

This will be a good time to monitor whether sale proceeds for freehold properties, during a collective sale, really are higher. For more on the situation as it unfolds, follow us on Stacked. In the meantime, you can also check out reviews of new and resale condos alike.