Singapore’s property market is known for its stability, strong regulation, and long-term capital appreciation. Among the many options available to buyers and investors, leasehold condominiums often spark debate. Some see them as excellent value-for-money investments, while others prefer freehold properties for long-term security.
So the real question is: are leasehold condos a good investment in Singapore?
The short answer is yes—but only if you understand how they work, where to buy, and what to look for.
This article breaks it all down in simple terms, covering prices, appreciation potential, rental demand, risks, and who leasehold condos are best suited for.
Understanding Leasehold Condos in Singapore
In Singapore, most condominiums fall into two main tenure categories: freehold and leasehold. Leasehold properties are typically sold with a 99-year lease, although some older developments may have 60-year or 999-year leases.
When you buy a leasehold condo, you own the unit for the remaining years of the lease. Once the lease expires, the land returns to the state, unless the lease is extended or the property is successfully redeveloped.
Despite this limitation, 99-year leasehold condos make up the majority of Singapore’s residential developments, especially those built on government land sales (GLS) sites.
Why Leasehold Condos Are More Affordable
One of the biggest advantages of leasehold condos is lower entry price.
Compared to freehold developments in similar locations, leasehold condos are usually priced 15–30% lower. This makes them more accessible for:
- First-time private property buyers
- Young families upgrading from HDB flats
- Investors with limited capital
- Buyers focusing on rental income rather than legacy ownership
Lower prices also mean smaller down payments and loan amounts, which can significantly improve cash flow and return on investment.
Capital Appreciation: Do Leasehold Condos Still Grow in Value?
A common myth is that leasehold condos do not appreciate. In reality, many leasehold condos in prime or well-connected locations have seen strong price growth, especially during the first 10–20 years of the lease.
Capital appreciation is influenced more by location, infrastructure, and demand than by tenure alone. Factors that drive price growth include:
- Proximity to MRT stations
- Access to business hubs and lifestyle amenities
- Reputable developers
- Overall supply and demand in the area
Newer leasehold condos often outperform older freehold developments simply because buyers value modern layouts, facilities, and connectivity.
Rental Yield: A Major Strength of Leasehold Condos
From an investment perspective, rental yield is where leasehold condos really shine.
Because the purchase price is lower, rental yields are often higher compared to freehold properties in the same area. Leasehold condos located near:
- MRT stations
- Business districts
- International schools
- Lifestyle and waterfront areas
tend to attract strong tenant demand, including expatriates, young professionals, and families.
For investors focused on monthly income rather than long-term holding, leasehold condos can deliver excellent returns.
Location Matters More Than Tenure
In Singapore, location almost always outweighs tenure.
A well-located leasehold condo near transport links and amenities can outperform a poorly located freehold property. Areas undergoing transformation—such as new MRT lines, commercial developments, or lifestyle hubs—often see sustained demand regardless of tenure.
For example, projects near upcoming transport infrastructure or rejuvenation zones typically benefit from both price appreciation and rental demand, even if they are leasehold.
This is why many experienced investors are comfortable buying leasehold developments in prime or city-fringe locations rather than freehold properties in less desirable areas.
Lease Decay: Is It Really a Problem?
Lease decay refers to the gradual reduction in value as the remaining lease shortens. While this is a real consideration, it is often overstated, especially for newer projects.
Key points to understand:
- Lease decay is minimal in the first 30–40 years
- Most buyers sell within 10–15 years, long before decay becomes significant
- Banks are comfortable financing properties with sufficient remaining lease
Additionally, some older leasehold developments may become en-bloc redevelopment candidates, allowing owners to exit at attractive prices before lease expiry.
En-Bloc Potential of Leasehold Condos
Another overlooked advantage of leasehold condos is collective sale (en-bloc) potential.
Developers often target older leasehold projects with large land plots for redevelopment, especially when the remaining lease is still sufficient to justify rebuilding.
Successful en-bloc sales can result in significant windfalls for owners, sometimes exceeding what they would have gained through normal resale appreciation.
This makes leasehold condos with good land attributes and locations particularly attractive to long-term investors.
Comparing Leasehold and Freehold Condos
Here’s a practical comparison to help clarify the difference:
Leasehold Condos
- Lower entry price
- Higher rental yield
- Better affordability
- Strong demand in prime locations
- Ideal for investors and upgraders
Freehold Condos
- Higher purchase price
- Perceived long-term security
- Preferred for legacy planning
- Often lower rental yield relative to price
The “better” option depends entirely on your investment goals, holding period, and financial strategy.
Who Should Consider Investing in Leasehold Condos?
Leasehold condos are especially suitable for:
- First-time private property buyers
- Investors focused on rental income
- Buyers planning to sell within 10–15 years
- Those seeking properties near MRTs and amenities
- Buyers targeting new launches with modern features
In fact, many savvy investors prefer leasehold developments because they offer better capital efficiency.
Midway through evaluating such opportunities, projects in well-connected districts—such as developments around established residential corridors like Dunearn House, often come up in discussions due to their strong location fundamentals and buyer demand.
Government Policies and Market Stability
Singapore’s property market is heavily regulated to ensure long-term stability. Measures such as:
- Additional Buyer’s Stamp Duty (ABSD)
- Loan-to-Value (LTV) limits
- Seller’s Stamp Duty (SSD)
apply equally to leasehold and freehold properties.
This means leasehold condos are not disadvantaged by policy, and their investment performance depends more on fundamentals than regulations.
Long-Term Outlook for Leasehold Condos in Singapore
Looking ahead, leasehold condos are expected to remain a dominant and viable investment class in Singapore. With limited land supply and continued urban redevelopment, demand for well-located homes is unlikely to fade.
As younger buyers become more value-conscious, practical considerations like price, connectivity, and lifestyle will continue to outweigh tenure concerns.
This trend strongly supports the long-term relevance of leasehold condominiums.
Final Verdict: Are Leasehold Condos a Good Investment?
Yes, leasehold condos can be a very good investment in Singapore, provided you choose wisely.
They offer:
- Lower capital outlay
- Attractive rental yields
- Strong demand in prime locations
- Good exit opportunities within a typical holding period
Rather than focusing solely on tenure, investors should evaluate location, pricing, developer reputation, and future growth potential.
When selected strategically, a leasehold condo can deliver returns that rival—or even outperform—freehold properties.