Freehold sounds obviously better. Forever beats ninety-nine years. But the honest answer is that tenure is a pricing question, not a moral one — and the premium you pay decides whether it was the right call.
Ask ten Singapore property agents whether freehold or leasehold is better and most will tell you freehold, without hesitation. Ask them how much more freehold is worth and the answers get vague.
That vagueness matters, because the entire question turns on price. A freehold property at a 10 per cent premium and the same property at a 35 per cent premium are completely different investments. One may be sensible; the other may take a decade to break even against a leasehold alternative.
This article sets out how tenure actually affects value in Singapore — the official valuation basis, the financing rules that bite as a lease shortens, and where each tenure genuinely wins. Particularly in the Core Central Region, where freehold sites are scarce and the premium can be steep.
What the Official Valuation Basis Actually Says
Singapore has a formal reference for this. The Singapore Land Authority uses a leasehold valuation table — known in the industry as Bala’s Table, or Bala’s Curve in graph form — to express the value of leasehold land as a percentage of what the same land would be worth freehold.
The table dates back to the colonial Land Office and is used today to price lease top-ups and state land transactions. Three reference points are widely cited:
| Remaining lease | Value as % of freehold | On a $2m freehold equivalent |
|---|---|---|
| 99 years (fresh) | 96% | $1,920,000 |
| 60 years | 80% | $1,600,000 |
| 30 years | 60% | $1,200,000 |
Figures per the SLA Leasehold Table (Bala’s Table). Illustrative only — actual market prices vary.
Two things stand out.
First, a fresh 99-year lease is only about 4 per cent below freehold. On the official basis, the theoretical gap at the point of a new launch is small — far smaller than the premium some freehold projects ask for.
Second, the decay is not linear. Losing the first 39 years of a lease costs about 16 percentage points of value. Losing the next 30 costs another 20. The curve is gentle at first and steepens sharply in the final decades — the reverse of compound interest.
The practical implication is about your holding period, not about forever.
If you buy a fresh 99-year lease and sell in fifteen years, you are selling something with 84 years remaining. The lease decay you actually experienced is modest. The steep part of the curve is a problem for whoever owns it in the 2070s — and that expectation is already priced in long before then.
Where Leasehold Genuinely Hurts: Financing
The more immediate risk is not valuation theory. It is that financing rules tighten as a lease shortens, and those rules constrain your future buyer’s ability to pay.
CPF usage rules
Since 10 May 2019, CPF usage has been governed by whether the property’s remaining lease covers the youngest buyer to at least age 95. Under the joint MND–MOM framework:
- If the remaining lease is more than 20 years and covers the youngest buyer to 95, CPF can be used up to the Valuation Limit
- If it does not, CPF usage is pro-rated based on how far the lease falls short
- If fewer than 20 years remain, CPF cannot be used at all
The arithmetic is simple and unforgiving: buyer’s age plus remaining lease must reach 95. A 40-year-old buyer needs 55 years remaining. A 35-year-old needs 60.
Bank loan tenure
Separately, lenders cap loan tenure — currently a maximum of 35 years for private residential property — and consider the remaining lease when assessing a loan. Loan-to-value limits also tighten where the tenure is long or extends past a borrower’s expected retirement age. Confirm your specific position with a banker or mortgage broker rather than relying on general figures.
Why this matters more than the valuation table
- Bala’s Table describes what something is theoretically worth
- Financing rules determine who can afford to buy it from you
- As a lease approaches the 60-year mark, the pool of buyers who can use full CPF starts to shrink
- A smaller buyer pool compresses your exit price regardless of what any table says
This is the strongest argument for freehold, and it is a real one. Freehold property never encounters these cliffs. Neither does the buyer after you, or the one after them.
Where Leasehold Genuinely Wins
Balance requires acknowledging that leasehold has real advantages, and some of them are substantial.
Lower entry price
The obvious one. If a comparable leasehold unit costs 20 per cent less, that difference is capital you keep — available for a larger unit, a better facing, a second property, or simply not being borrowed. Capital deployed elsewhere compounds.
Location, because of how land is released
The Government releases land through the Government Land Sales programme on 99-year leases. That means many of the best-located new sites — near new MRT stations, in planned growth areas, on prime waterfront — are leasehold by definition. Insisting on freehold rules out a large share of the market, including some of the strongest locations.
Collective sale potential
Leasehold developments can and do go en bloc. A successful collective sale converts the remaining lease into a cash payout that can substantially exceed what the lease decay curve would imply. Freehold estates go en bloc too, but the point is that leasehold owners are not simply riding a depreciating asset to zero.
Rental yield
Rental income does not care about tenure. A tenant pays for location, condition and size. If a leasehold unit costs less to buy and rents for the same, its yield is higher. For an investor focused on income rather than terminal value, that arithmetic often favours leasehold.
The Question That Actually Decides It: What Premium?
Everything above reduces to one number — the premium the freehold property is asking for over a comparable leasehold alternative.
If the official basis puts a fresh 99-year lease at around 96 per cent of freehold, a modest single-digit premium is broadly consistent with the theory. In practice, market premiums for freehold vary widely and can be considerably higher, particularly where freehold supply in a district is thin.
Whether a larger premium is justified depends on things only you can answer:
- How long will you hold? Under fifteen years, lease decay barely registers. Multi-generational holding is where freehold earns its premium.
- Are you buying to live in or to rent out? Own-stay favours freehold. Yield-focused investment often favours leasehold.
- Is this a legacy asset? If the intention is to pass it to children, freehold removes a problem your heirs would otherwise inherit.
- What does the alternative actually cost? Compare like with like — same district, similar size, similar age. A freehold premium measured against a project in a different location tells you nothing.
A useful test: take the freehold premium in dollars and ask what that sum would earn if invested elsewhere over your intended holding period. If the answer comfortably exceeds the lease decay you would suffer on the leasehold alternative, the premium is hard to justify on financial grounds alone.
It may still be justified on other grounds — certainty, legacy, peace of mind. Those are legitimate reasons. They are simply not financial ones, and it helps to be clear about which you are paying for.
Why the Core Central Region Is a Special Case
In the Core Central Region, and particularly in District 11, the supply picture changes the calculation.
The Government does not release freehold land. Freehold sites reach the market almost exclusively through collective sales and private redevelopment of existing freehold plots — an irregular, unpredictable pipeline. In a mature, fully built-out district, those opportunities are infrequent.
The consequence is that freehold new launches in the CCR are scarce relative to demand, and that scarcity supports the premium in a way it might not in a district where freehold stock is plentiful.
This is a genuine structural point rather than a marketing line. But it still does not answer the pricing question. Scarcity justifies a premium. Whether it justifies the premium on a specific project at a specific price is a separate calculation, and it deserves to be done properly.
Weighing a freehold purchase in District 11?
The Serra Residences is a freehold development of 133 homes at 7 Bassein Road, Novena, with previews scheduled from 19 September 2026. We are happy to talk through how it compares against leasehold alternatives in the area.
The Bottom Line
Freehold is not automatically the better buy, and leasehold is not a depreciating trap. Both statements are marketing shorthand that fall apart under examination.
What is true is narrower. Freehold removes the financing cliffs that appear as a lease shortens, which protects your exit price and your heirs’ options. Leasehold usually costs less at entry, often sits in locations freehold simply cannot access, and can produce a better yield.
The deciding variable is the premium. Work out what you are actually paying for the tenure, compare it against a genuinely comparable alternative, and set it against how long you intend to hold. Do that arithmetic and the answer usually becomes obvious — and it will be specific to you rather than to a general rule.
Sources: Singapore Land Authority Leasehold Table (Bala’s Table); Joint MND–MOM press release, “More Flexibility to Buy a Home for Life While Safeguarding Retirement Adequacy”, 9 May 2019; CPF Board.
This article is provided for general information only and does not constitute financial, investment, tax or legal advice. Valuation figures are illustrative and derived from published reference tables, not from any specific property. CPF and lending rules are subject to change — verify your position with CPF Board, your bank and independent professional advisers before making any decision.
