Calculating Your Property’s Annual Value in Singapore 2024: A Simple Guide!
TLDR Understanding your property's annual value is crucial for determining property taxes in Singapore. The annual value is based on...
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 …
Could It Be Wise to Sell Your Property After Just 3 to 4 Years?
TLDR In this blog post, the writer delves into the Singapore property market, particularly focusing on the effectiveness of quick...
Read More
Top 5 Reasons : Why Singapore’s Property Market Is a Safe Haven for Investors in Uncertain Times – Insider Analysis!
In today's uncertain global economic climate, investors are constantly on the lookout for safe havens to park their wealth. Amidst...
Read More
Top 5 Factors : What Is Considered “Luxury” In The Singapore Property Market?
The Singapore property market is known for its high-quality residential properties, attracting both local and international buyers. Luxury real estate...
Read More
Top 5 Best Instagrammable Spots in Singapore
Singapore, a vibrant and modern city-state, is known for its stunning architecture, lush green spaces, and colorful streets. With its...
Read More
Top 5 Tips : How to Choose the Right Type of Property to Invest in Singapore – Expert Tips and Analysis!
Investing in property has long been a popular method for growing wealth in Singapore. With million-dollar HDBs being sold and...
Read More
Ready To Make The Jump From HDB To Condo? This Guide Has All The Answers!
TLDR When upgrading from an HDB flat to a condo, consider factors like location proximity, amenities, and regulations. Decide whether...
Read More
Top 5 Tourist Attractions in Singapore
Top 5 Tourist Attractions in Singapore Singapore, a vibrant city-state located in Southeast Asia, is known for its diverse culture,...
Read More
Powering The Lion City: The Top 5 Industries Driving Singapore’s Economy
Powering The Lion City: The Top 5 Industries Driving Singapore's Economy Singapore is widely recognized as one of the most...
Read More
Top 5 Street Food Markets in Singapore
Singapore, a melting pot of diverse cultures, offers an incredible array of street food that tantalizes the taste buds of...
Read More
The High Price of Picking the Wrong Property in Singapore in 2025
The Steep Price Of Making A Mistake When Buying Property In Singapore Are you yearning for a condo, but the...
Read More
Pitfalls of Owning a Boutique Condo: 5 Insider Insights You’ll Wish You Knew Earlier
TLDR When considering boutique condos, be mindful of potential drawbacks such as dominating families influencing rules, lack of privacy due...
Read More
Beware of These 7 Deceptive Tricks In Showflat Condo Sales
TLDR When navigating the complexities of the real estate market, it's crucial to be wary of hidden marketing tricks when...
Read More
Should You Keep Your Resale HDB Flat When Buying a Private Property? 5 Key Factors to Consider
TLDR In Singapore, owning both an HDB flat and a private property has become complicated due to factors like Additional...
Read More
3 Things You Need to Know if You Are Buying a Second Property
TLDR When considering buying a second property in Singapore, ensure eligibility by meeting the Minimum Occupancy Period (MOP) and understanding...
Read More
5 Singapore Property Investing Myths Debunked
In the world of property investing, misconceptions can lead to poor decisions and financial losses. In Singapore, there are several...
Read More
What’s The Difference Between An Offer To Purchase And An Option To Purchase?
TLDR Understanding the crucial difference between an Offer to Purchase and an Option to Purchase (OTP) is vital when buying...
Read More
Breaking Through the Stalemate of En Bloc Sales
TLDR The Singapore property market faces challenges with the ongoing en bloc stalemate. Lower success rates, higher development risks, and...
Read More
Top 5 : Greatest Challenges That Investors Face In Singapore’s Real Estate Market
Singapore's real estate market is a dynamic and attractive investment landscape for both local and international investors. Known for its...
Read More
Should Buying A Low Lease Project Be A Viable Option?
TLDR When considering low lease projects in Singapore, it's crucial to evaluate your individual needs, financial standing, and future plans....
Read More
