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  • Writer's pictureAaron Lin

99 Versus Freehold - Does It Really Matter?


The distinction between freehold and 99-year leasehold does not affect capital gains significantly.

Many properties situated in good locations are actually 99-year leasehold.

The property market has transformed significantly since 1995 - it will be a mistake to make investment decisions on the basis of historical advice.


Should you invest in a freehold or 99-year leasehold property?

Many buyers insist on buying freehold property. For the past few years, most government land sales are limited to 99-year leasehold while most of the freehold properties are on en bloc land.

Many are saying that freehold property has a high potential for en bloc compared to 99-year leasehold. However, this is not true since there are many 99-year leasehold properties which went through en bloc. When I joined my company’s en bloc team, I realised that it is possible to top-up the 99-year lease. In fact, I have not seen a case in recent years where topping up the lease for residential property was not allowed.

Most of the recent lands situated in popular locations or near the MRT are 99-year leasehold. It does not make sense to not invest in such locations simply because it is not freehold.

The property market has transformed significantly since 1995. If you purchased a HDB flat in 1995, you can easily earn substantial capital gains. But today, most resale buyers will not stand a chance to earn these high returns when buying a HDB. Even for BTO, returns in the past could amount up to S$200,000 - 300,000 while returns today will be lesser at around S$50,000 - 80,000. In short, it is impossible to use past experiences and trends in the property market as a basis for predicting what will happen in the future.

My recommendation is to not look so much into the distinction between freehold and 99-year leasehold. In the current market situation, this does not affect capital gains significantly. Furthermore, you will typically have to pay much more for freehold property than 99-year leasehold property. Many 99-year leasehold properties are also situated in good locations.

The way agents look into investment differs significantly from how the public views investment. The idea that freehold is better than 99-year leasehold is simply not accurate.

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