Fraud Blocker
Your search results

Can You Still Make Money from Older Freehold Condos in Singapore

Posted by Jayson Ang on November 23, 2024
| 0

TLDR

While freehold condos might seem like a solid investment, the rise of new developments and aging buildings cast doubt on their long-term value. Data shows that younger freehold condos under 10 years old have a higher average price per square foot compared to older ones. Leasehold condos, while initially cheaper, close the price gap over time. The prime profit window for freehold condos is between 30 and 40 years, but profitability declines past this due to financing constraints. District-specific trends suggest better gains in upscale areas like Districts 9 and 10. Ultimately, the freehold premium may require decades to justify itself, and property management quality remains crucial. Deciding whether to buy, sell, or wait depends on individual circumstances and market conditions.

While freehold condos may seem like a foolproof investment on paper, doubts have begun to surface in recent times. One popular belief suggests that their lack of lease extension fees gives them a competitive edge in the en-bloc market. However, with the rise of neighboring new developments and the uncertainty surrounding the sustainability of aging condos, the question remains: can a decades-old freehold condo still hold its value? Curious, we delved into the topic further.

Average Prices of Freehold Condos According to Age: Unveiling the Trend:

Year/Age Less Than 10 Years Old Less Than 20 Years Old Less Than 30 Years Old Less Than 40 Years Old 40 Years Or More Grand Total
2014 $1,609 $1,249 $1,212 $1,194 $1,003 $1,510
2015 $1,588 $1,222 $1,124 $1,148 $1,029 $1,441
2016 $1,663 $1,210 $1,100 $1,140 $1,051 $1,475
2017 $1,705 $1,235 $1,167 $1,180 $1,172 $1,505
2018 $1,821 $1,345 $1,238 $1,320 $1,264 $1,620
2019 $2,118 $1,444 $1,308 $1,342 $1,279 $1,804
2020 $1,963 $1,423 $1,290 $1,359 $1,169 $1,695
2021 $2,057 $1,621 $1,384 $1,445 $1,364 $1,816
2022 $2,280 $1,741 $1,507 $1,625 $1,622 $1,999
2023 $2,459 $1,846 $1,617 $1,671 $1,567 $2,117
2024 $2,427 $1,873 $1,702 $1,627 $1,592 $2,000
Grand Total $1,944 $1,492 $1,346 $1,375 $1,381 $1,730

As the years pass, the average price per square foot of a freehold condo fluctuates, revealing its true worth with each passing decade. For those curious about how it stacks up against leasehold, the numbers tell a compelling story.

For the young and sprightly leasehold condos under 10 years old, the average price per square foot is a mere $1,410 – a significant 31.8% lower than their freehold counterparts. But as time wears on, the gap narrows; at 40+ years old, the average leasehold condo fetches around $997 psf, only 32.9% less than a freehold unit. Could it be that leasehold holds its value better than we give it credit for?

Interestingly, for those willing to overlook a few wrinkles and embrace a condo that’s 30+ years old, a spacious 1,000 sq. ft. (think three bedrooms) could be within reach for a quantum of $1.6 to $1.7 million. A mere fraction of what a similar freehold unit would cost.

So don’t let the numbers fool you – come 2024, a family-sized freehold condo may not be a distant dream for those looking to upgrade, even if it means venturing further from the city.

Exploring the Average Appreciation of Freehold Condos Based on Age

Year/Age Less Than 10 Years Old Less Than 20 Years Old Less Than 30 Years Old Less Than 40 Years Old 40 Years Or More
2014
2015 -1.33% -2.12% -7.27% -3.85% 2.65%
2016 4.75% -1.02% -2.20% -0.69% 2.17%
2017 2.50% 2.13% 6.14% 3.53% 11.47%
2018 6.84% 8.91% 6.11% 11.83% 7.83%
2019 16.32% 7.33% 5.65% 1.63% 1.19%
2020 -7.35% -1.47% -1.37% 1.29% -8.61%
2021 4.81% 13.96% 7.26% 6.31% 16.69%
2022 10.84% 7.38% 8.89% 12.52% 18.89%
2023 7.84% 6.05% 7.27% 2.82% -3.39%
2024 -1.31% 1.46% 5.28% -2.66% 1.64%
Grand Total 4.39% 4.26% 3.58% 3.27% 5.05%
Total Volume 33277 14368 7136 2195 569

During its early years, the condominiums thrive, thanks to its youthful age that keeps it out of the “old” category. However, as it nears the 40-year milestone, a testament to its longevity begins to unfold, revealing the fruits of a patient and enduring ownership.

Unveiling the Average Percentage Profits and Losses in Transactions

Row Labels Less Than 10 Years Old Less Than 20 Years Old Less Than 30 Years Old Less Than 40 Years Old More Than 40 Years Old Grand Total
2014 7.8% 20.7% 26.4% 13.0% 31.3% 11.0%
2015 11.9% 24.6% 29.1% 31.7% 46.0% 16.4%
2016 14.6% 31.0% 31.3% 35.3% 21.5% 20.3%
2017 15.6% 29.1% 31.8% 34.4% 24.4% 21.0%
2018 11.7% 21.1% 23.8% 34.7% 28.9% 16.0%
2019 13.7% 26.4% 33.3% 33.1% 24.7% 19.5%
2020 18.4% 30.6% 34.5% 32.8% 34.2% 24.6%
2021 13.7% 24.0% 24.4% 7.5% 32.1% 18.9%
2022 8.1% 33.3% 12.4% 6.3% 15.0%
2023 1.5% 4.1% 2.5%
Grand Total 12.5% 25.9% 29.0% 31.8% 26.9% 17.5%

The prime window for optimal profit in the market appears to fall between the 30 and 40-year threshold, while surpassing it proves less lucrative. Just like their leasehold counterparts, returns tend to dwindle past the 40-year milestone, mainly due to constraints in financing. As banks scale back their maximum loan limits, buyers are forced to cough up more cash, consequently putting a damper on market prices.

Looking At Performance By District

Profitability

The unequal distribution of freehold properties is evident as they tend to congregate in certain districts while remaining scarce in others. In the upscale regions of Districts 9 and 10, such as the bustling Orchard and scenic Bukit Timah, it is not uncommon to come across aged freehold properties compared to their leasehold counterparts.

However, the reverse is true for District 25, nestled in the rustic Woodlands, where almost all properties are on a leasehold basis. Due to the low transaction volume in some districts, using the average gains as a measure may not accurately reflect the market trends and prices can fluctuate greatly.

As such, relying on the gains in well-established districts like 9 and 10 may offer a more precise depiction of the area. It is worth noting, however, that caution should be exercised when considering District 15, as it encompasses a myriad of boutique freehold condos that are known to experience dramatic price swings.

When Does Investing in Freehold Premium Make Financial Sense?

Generally speaking, the freehold premium, which typically ranges from 15 to 20 percent higher than a leasehold, may take quite some time to pay off. In the short term, say within a decade of purchasing, the freehold title may hold little significance. However, as the years pass and you approach the 30-year mark, the value of freehold ownership becomes evident without the looming threat of lease decay.

Nevertheless, with an extended holding period, one cannot help but wonder about the maintenance of the property. This concern is especially valid in sprawling developments with a multitude of amenities. Will the numerous swimming pools, manicured gardens, and BBQ pits retain their charm after decades of use? While freehold status may safeguard against lease decay, it cannot guarantee competent condo management.

Should You Buy, Sell or Wait?

If you’re reading this, you must be trying to figure out the best course of action right now: is it the right time to buy or sell?

It’s difficult to give an exact answer since everyone’s situation is unique and what works for one person may not necessarily work for you.

I can bring you a wealth of on-the-ground experience and a data-driven approach to provide clarity and direction. From beginners to experienced investors, our top-down, objective approach will help you on your real estate journey.

I can help you by:

  1. Offering Strategic Real Estate Advice – I can help create a comprehensive plan to guide you through your property journey.
  2. Connecting Your Home with the Perfect Buyers – Through stunning visuals, an effective communication strategy, and an in-depth knowledge of the market, we’ll ensure your home is presented in the best possible way to fulfill your goals.

You May Also Like …


5 Insider Tips From Real Estate Experts On How To Get The Best Deal On Property In Singapore
Mandarin Top 5

5 Insider Tips From Real Estate Experts On How To Get The Best Deal On Property In Singapore

Investing in property can be a great way to build wealth and secure your financial future. However, with Singapore's highly...
Read More
5 Facilities Selling Points Condo Sellers Should Emphasize To Entice Potential Buyers
All Blog Posts Buying Tips

5 Facilities Selling Points Condo Sellers Should Emphasize To Entice Potential Buyers

TLDR When selling a condo, focusing on highlighting key facilities like gyms, swimming pools, family-friendly amenities, community gardens, and clubhouse...
Read More
Are You Ready to Take on the Singapore Property Market in 2023? 12 Reasons to Be Hopeful (Or Wary)!
All Blog Posts Opinion

Are You Ready to Take on the Singapore Property Market in 2023? 12 Reasons to Be Hopeful (Or Wary)!

2022 sure was a rollercoaster ride for the property market, and the world! From war in Europe to skyrocketing interest...
Read More
How to Avoid Forfeiting Your Security Deposit: A Guide to Your Rental Property
All Buying Tips

How to Avoid Forfeiting Your Security Deposit: A Guide to Your Rental Property

TLDR When bidding farewell to your rented property, ensure the safe return of your security deposit by: Regular Aircon Servicing:...
Read More
5 Top Primary Schools in Singapore Popular with Expat Chinese Community
Mandarin Top 5

5 Top Primary Schools in Singapore Popular with Expat Chinese Community

5 Top Primary Schools in Singapore Popular with Expat Chinese Community When it comes to education, Singapore is a top...
Read More
What Factors Contribute To Singapore’s Real Estate Market Exhibiting Less Volatility Than Other Major Cities?
All Buying Tips Opinion

What Factors Contribute To Singapore’s Real Estate Market Exhibiting Less Volatility Than Other Major Cities?

TLDR The Singaporean real estate market has remained stable due to government cooling measures. These include Additional Buyer's Stamp Duty...
Read More
Simplified Guide to Buying Landed Property in Singapore
All Buying Tips

Simplified Guide to Buying Landed Property in Singapore

TLDR When considering buying a landed property in Singapore, you have options like terrace homes, semi-detached houses, and bungalows. Understanding...
Read More
5 Reasons Why Singapore Loves Investing in Properties
Mandarin Top 5

5 Reasons Why Singapore Loves Investing in Properties

Property investing is a popular and lucrative option in Singapore due to several reasons. Firstly, Singapore's stable and growing economy...
Read More
5 Reasons Why You Should Consider Investing In Singapore Real Estate
Buying Tips Mandarin Top 5

5 Reasons Why You Should Consider Investing In Singapore Real Estate

TLDR Investing in Singapore real estate offers attractive tax incentives, low cost of living, high rental yields, market reliability, diversification...
Read More
6 Reasons to Think Twice Before Hiring a Friend or Family Member as Your Agent
All Blog Posts Opinion Selling Tips

6 Reasons to Think Twice Before Hiring a Friend or Family Member as Your Agent

TLDR In Singapore, hiring a friend or family member as your property agent can be risky. Disclosing sensitive financial details...
Read More
Avoid The Possibility Of Negative Cash Sales: Find Out How Much Your HDB Has To Appreciate To Steer Clear Of It!
All Blog Posts Buying Tips

Avoid The Possibility Of Negative Cash Sales: Find Out How Much Your HDB Has To Appreciate To Steer Clear Of It!

TLDR When selling your property, watch out for negative cash sales that could leave you with no money after CPF...
Read More
Top 5 Parks and Nature Reserves to Visit in Singapore
Mandarin Top 5

Top 5 Parks and Nature Reserves to Visit in Singapore

Singapore, often referred to as the "Garden City," is a vibrant and diverse nation that has made significant strides in...
Read More
The Emergence of Million-Dollar HDB Flats in Singapore: Could This Become the Standard Moving Forward?
All Buying Tips Selling Tips

The Emergence of Million-Dollar HDB Flats in Singapore: Could This Become the Standard Moving Forward?

TLDR Understanding the nuances of the HDB property market in Singapore, especially the trend of million-dollar flats, requires a deep...
Read More
Top 5 : Factors Influence Real Estate Investors’ Decisions when Investing in Singapore Condos?
Mandarin Top 5

Top 5 : Factors Influence Real Estate Investors’ Decisions when Investing in Singapore Condos?

Singapore's real estate market has always been an attractive investment option for both local and foreign investors. The city-state's stable...
Read More
Top 5 Art Galleries in Singapore for Contemporary Art
Mandarin Top 5

Top 5 Art Galleries in Singapore for Contemporary Art

Singapore, known for its modern architecture and vibrant culture, has a thriving art scene that showcases the best of contemporary...
Read More
Top 5 : Questions Should Investors Be Asking Before Investing In Singapore’s High-End Rental Market
Mandarin Top 5

Top 5 : Questions Should Investors Be Asking Before Investing In Singapore’s High-End Rental Market

Singapore's high-end rental market has been a hot topic of discussion among investors worldwide. With the city-state's robust economy, excellent...
Read More
What’s Next for HDB Owners?
All Buying Tips

What’s Next for HDB Owners?

Buying a home always seems daunting especially such it is a big-ticket item and the prices for private homes can easily...
Read More
Top 5 Emerging Trends in Singapore Real Estate: What Investors Need to Know
Mandarin Top 5

Top 5 Emerging Trends in Singapore Real Estate: What Investors Need to Know

The Singapore real estate market has experienced significant growth in recent years, attracting investors from around the world. As the...
Read More
The Changing Faces of Orchard Road
All Buying Tips

The Changing Faces of Orchard Road

Should You Buy, Sell or Wait? If you're reading this, you must be trying to figure out the best course...
Read More
Top 5 : How Does Investing In Luxury Condos In Singapore Compare To Investing In Other Real Estate Asset Classes In Terms Of Long-Term Capital Appreciation?
Mandarin Top 5

Top 5 : How Does Investing In Luxury Condos In Singapore Compare To Investing In Other Real Estate Asset Classes In Terms Of Long-Term Capital Appreciation?

Investing in real estate has long been considered a reliable way to build wealth and diversify one's investment portfolio. In...
Read More
1 2 3 29

Compare Listings