5 Untold Risks Of Buying An Old Freehold Condo In Singapore
TLDR Old freehold condos in Singapore may seem attractive due to lower prices, but they come with hidden pitfalls. Longstanding...
Read More
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:
- Offering Strategic Real Estate Advice – I can help create a comprehensive plan to guide you through your property journey.
- 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 Points : Singapore’s Property Market vs. Stock Market: Which is the Better Investment Option?
Investing is an important aspect of personal finance and can be a valuable way to grow wealth over time. However,...
Read More
Superstitions in the Real Estate Market : How Does it Impact Resale Value?
TLDR When navigating the Singapore property market, it's crucial to consider various superstitious beliefs that can impact your decisions. From...
Read More
Unlock the Potential of Your Home: 5 Reasons to Start Selling Now
TLDR When considering selling your home, several key indicators can help you determine if it's the right time to make...
Read More
Why Are Singapore Property Agents So Keen on New Launch Condos? Unpacking the Motivations in 2025
TLDR In Singapore’s 2025 property market, agents’ strong preference for recommending new launch condos is less about chasing commissions and...
Read More
Budget 2024: What To Expect For The Singapore Residential Market?
TLDR In 2025, owner-occupiers of residential properties can benefit from property tax relief based on the Annual Value Band. Retirees...
Read More
Singapore’s Best Kept Real Estate Secrets: 5 Insider Tips for Savvy Investors
Singapore's Best Kept Real Estate Secrets: 5 Insider Tips for Savvy Investors Here are 5 insider tips for those looking...
Read More
The Illusion of Waiting: Why Cooling Measures Might Not Guarantee Cheaper Properties in Singapore
TLDR Cooling measures in Singapore’s property market don’t guarantee cheaper homes. While they aim to slow price growth, history shows...
Read More
5 Top Reasons Why Chinese Love to Invest in Singapore Property Market Today
Here are the top 5 reasons why Chinese love to invest in Singapore's property market today. 1. Political stability: Singapore...
Read More
Essential Steps for Safely Purchasing Your First Home in Singapore
TLDR When considering buying your first property in Singapore, start by assessing your budget and qualifying for a permissible loan....
Read More
Top 5 Best Secret Gardens in Singapore
Singapore, a bustling city-state known for its modern architecture and vibrant culture, is also home to a plethora of hidden...
Read More
5 Neighbourhoods Poised to Benefit Most from the URA Draft Master Plan 2025
TLDR Singapore’s URA Draft Master Plan 2025 outlines major urban redevelopment with 80,000 new homes across 10 estates. Key growth...
Read More
Top 5 Reasons : Is It Still Worth It For A Foreigner To Invest In Singapore
Singapore, a small yet prosperous city-state in Southeast Asia, has long been an attractive destination for foreign investors. Its strategic...
Read More
Is The Condo Dream Getting Increasingly Harder To Achieve For Singaporeans?
TLDR Condominium prices in Singapore have nearly doubled over the past 15 years, with new launches now averaging around $2,390...
Read More
What Is The Best Location To Purchase A House To Ensure Your Child Has The Highest Probability Of Attending A Well-Renowned Primary School?
TLDR Parents often seek homes within 1km of desired primary schools to increase enrollment chances. Consider oversubscription rates and population...
Read More
The Top 5 Factors to Consider When Investing in Industrial Property in Singapore – Expert Insights!
Singapore, a thriving hub of business and commerce in Southeast Asia, offers a robust real estate market with various investment...
Read More
Invest During the Bearish & Exit During the Bullish
TLDR A comprehensive overview of the real estate market trends, emphasizing the importance of strategic property analysis and investment decisions....
Read More
Why En Blocs Often Fail to Succeed
TLDR In this blog post, the focus is on the challenges and complexities of en-bloc transactions in Singapore's property market....
Read More
Top 5 Reasons Why Singapore’s Luxury Property Market Is Booming – Expert Analysis!
Singapore's luxury property market has been experiencing a significant boom in recent years, attracting the attention of investors and high-net-worth...
Read More
Top 5 Tips How to Find Your Dream Home in Singapore: A Step-by-Step Guide
Singapore, a vibrant and dynamic city-state, offers a diverse range of housing options for prospective homebuyers. From condominiums and HDB...
Read More
