Is Buying a 99-Year Leasehold Landed Property a Good Idea in Singapore?

In Singapore’s competitive real estate landscape, the debate between freehold and leasehold properties is ongoing. While freehold properties are often seen as more desirable due to their perpetual ownership, 99-year leasehold landed homes present unique advantages that merit consideration. This blog post delves into the pros and cons of purchasing a 99-year leasehold landed property, providing insights to help you make an informed decision.

Understanding 99-Year Leasehold Landed Properties

A 99-year leasehold property means that the land is leased from the government for 99 years. Upon lease expiry, ownership reverts to the state unless the lease is renewed. These properties are typically found in newer estates or on land sold through the Government Land Sales (GLS) program.

Pros of Buying a 99-Year Leasehold Landed Property

1. Affordability

Leasehold landed homes are generally more affordable than their freehold counterparts. For instance, a 99-year leasehold inter-terrace home might range from S$1.8 million to S$2.5 million, whereas a similar freehold property could cost between S$3.5 million and S$3.9 million (landedproperty.sg).

2. Landed Living Experience

These properties offer the spaciousness and privacy associated with landed living, providing ample room for families, gardens, and potential installations like home lifts.

3. Higher Rental Yields

Investors may find that leasehold properties offer higher rental yields. Since tenants typically do not prioritize the tenure of a property, the rental income remains comparable to freehold properties, while the lower purchase price of leasehold homes results in better yield percentages.

4. Foreign Ownership Opportunities

Sentosa Cove stands out as a unique enclave where foreigners are permitted to purchase landed homes, all of which are on 99-year leases. This area combines luxury living with the exclusivity of landed property ownership, making it an attractive option for international buyers.

Cons of Buying a 99-Year Leasehold Landed Property

1. Depreciation Over Time

As the lease term decreases, the property’s value typically declines, especially after the 70th year, following a pattern known as the “Bala’s curve.” This depreciation can impact resale value and investment returns.

2. Financing Constraints

Properties with shorter remaining leases face stricter financing conditions. For instance, if the lease does not cover the youngest buyer until age 95, the use of CPF funds and loan amounts may be limited. This can affect both purchasing power and the pool of potential future buyers.

3. Limited Legacy Planning

Unlike freehold properties, leasehold homes cannot be passed down indefinitely. As the lease shortens, the property’s value may diminish, making it less ideal for those looking to leave a lasting legacy for future generations.

4. Uncertainty of Lease Renewal

Renewing or extending a lease is not guaranteed. Applications for lease top-ups are considered on a case-by-case basis and may be rejected if they do not align with urban planning objectives.

Recent Market Trends: Appreciating Leasehold Landed Properties Across Singapore (2021-2025)

Contrary to the common belief that leasehold properties depreciate over time, recent sales transaction data for leasehold landed houses across Singapore reveals a compelling trend. Our analysis of transactions from 2021 to 2025 provides valuable insights into this specific market segment.

Key Observations:

• Declining Transaction Volume: The number of sales transactions has generally trended downwards, from a high of 813 in 2021 to a low of 101 in 2025. This suggests a potential cooling in market activity specifically for leasehold landed properties.
• Consistent Rise in Average PSF: Despite the reduced volume, the average price per square foot (PSF) has shown a steady increase, climbing from S$987 in 2021 to S$1,453 in 2025. This indicates that even with fewer transactions, the price buyers are willing to pay per unit area for leasehold landed houses is increasing.
• Fluctuating Average Prices: The overall average price has fluctuated, reaching a peak in 2023 at S$3,454,367 before declining in 2025 to S$3,430,451. This movement is influenced by both the volume of transactions and the increasing average PSF.

For a wider perspective on landed property transactions in 2024, including both leasehold and freehold sales, you can refer to the chart available here.

Implications for Buyers and Investors:

The trend of increasing average PSF for leasehold landed properties, even amidst declining transaction volume, suggests continued demand and potential for price appreciation in this market segment.

While the overall transaction volume is decreasing, the rising PSF indicates that buyers are still willing to pay more per square foot for these properties. This could be due to factors such as location, property size, or specific features that continue to make these properties attractive.

Strategic Considerations for Buyers

1. Focus on PSF Growth

The consistent rise in average PSF suggests that well-located and desirable leasehold landed properties can still offer good returns, even as the overall market moderates.

2. Analyze Market Dynamics

Understanding the interplay between transaction volume and PSF is crucial. While lower volume might indicate a cooling market, the rising PSF suggests underlying strength in pricing for this property type.

3. Consider Individual Property Attributes

As always, location, property condition, and specific features will play a significant role in determining the value and potential appreciation of a leasehold landed property.

4. Plan for Exit Strategies

Be mindful of potential exit strategies, such as resale or collective sales (en-bloc), especially as the lease term shortens. Properties with redevelopment potential may attract developers interested in lease renewals.

Conclusion

Buying a 99-year leasehold landed property in Singapore can be a sound decision for those prioritizing affordability, space, and lifestyle over long-term investment and legacy planning. Recent market trends indicate that these properties can appreciate significantly, particularly in certain regions. By carefully considering factors like lease duration, location, and personal objectives, buyers can make informed choices that align with their goals.

Thinking about buying or selling a 99-year leasehold landed property in Singapore? Our team has in-depth knowledge of this market segment. Reach out to us for a discussion.