Freehold Property: Is It Worth Paying More?

“It’s freehold” can sound like the end of a property discussion. We think it should be the beginning.

A freehold home has no contractual lease expiry. A 99-year leasehold home has a remaining lease that gets shorter each year. That difference matters, especially if you intend to keep the property for decades or pass it to your children.

But freehold does not stop a building from ageing. It does not guarantee rental demand, an easy sale or a rising price. You can still pay too much for it.

What are you paying extra for?

You are paying for ownership that can continue beyond a fixed lease term. The longer you expect to keep the property, the more relevant that benefit becomes.

If you expect to sell in a few years, other factors may carry more weight: your entry price, the location, the layout and whether the next buyer will find it attractive.

Published NUS research on historical resale transactions found that private freehold and leasehold non-landed homes showed similar age-related depreciation in their early years, with differences becoming clearer later. This supports taking time seriously. It does not tell us which particular home will perform better.

Freehold landed and freehold condos are different purchases

With a conventional landed home, you own an individual plot. Its size, shape, frontage and the changes permitted under planning rules matter alongside the house itself.

With a freehold condo, you own a unit and a share of the development’s common property. The estate’s upkeep, shared funds for major repairs, layout and management remain important. A freehold title does not make an ageing lift or a tired building disappear.

The question is therefore bigger than tenure: is this a property worth owning for a long time?

Compare the full package

Suppose the freehold option costs more than a leasehold alternative. What else changes?

• —Would you accept a longer commute to get freehold?
• —Would you buy an older building or a less practical layout?
• —Would the larger loan leave less room for emergencies or other plans?
• —Does the property have clear strengths beyond its tenure?

There is no universal percentage that makes the freehold premium reasonable. Compare actual alternatives and the extra dollars you would have to commit.

The Strax view

Freehold removes lease expiry. It does not remove investment risk.

Permanence can be valuable. It is most useful when the property itself is sound, the price makes sense and long-term ownership fits your plans.

Before buying, ask: how long will I keep it, how much extra am I paying, and what am I giving up to get it?