Whether to buy freehold or leasehold is one of the most debated topics in Singapore property. Tenure affects price, CPF usage, bank financing, and long-term value — here is what you actually need to know.
Leasehold vs Freehold: The Basics
| Leasehold (99-year) | Freehold | |
|---|---|---|
| Ownership duration | Fixed term (typically 99 years) | Indefinite |
| Price premium | Base price | Typically 10–20% higher |
| Supply in Singapore | Majority of properties | Rare, mainly older estates |
| HDB flats | All HDB flats are 99-year leasehold | N/A |
How Lease Decay Affects Financing and CPF
As a leasehold property ages, the remaining lease affects how it can be financed:
- Below 60 years remaining: Banks reduce the LTV ratio — you need more cash upfront.
- Below 30 years remaining: CPF usage becomes highly restricted.
- CPF rule: The remaining lease must cover the youngest buyer to age 95 for full CPF usage. A 40-year-old buyer needs at least 55 years of lease remaining.
For a brand-new 99-year property, these constraints are decades away and generally not a concern for typical 10–20 year holding periods.
En Bloc Potential
Older leasehold developments in prime locations sometimes attract collective sales (en bloc), where all owners sell to a developer at a premium. The payout can far exceed individual market value. However, en bloc success requires owner consensus (80% by share value), strata title approval, and developer interest — it is never guaranteed and cannot be planned for.
The Practical Verdict
- Location matters more than tenure. A well-located leasehold property will outperform a poorly located freehold one every time.
- For most buyers, 99-year leasehold is perfectly sound if purchased early in the lease and held for a typical period.
- Freehold is worth the premium if you intend to pass the property to children over a very long horizon and want to avoid lease decay considerations entirely.
- 999-year leasehold is functionally equivalent to freehold for all practical purposes within any foreseeable holding period.