Valuing leasehold property: lease decay vs freehold in Singapore (2026)
How to value a leasehold property in Singapore in 2026: lease decay maths, CPF and loan rules for older leases, en bloc odds, and when freehold is worth more.
How we made this. Updated for 2026 with AI-assisted research. Figures are linked to their sources — check them before you act.
A leasehold home is the right to use a property for the years left on its lease, so its value must fall towards zero as the lease runs out. The fall is slow at first and fast later. In Singapore it is made steeper by CPF and loan rules that shut out many buyers once a lease gets short. To value a leasehold home, work out what the remaining years are worth, and who will be able to buy it from you when you sell.
At a glance
- Most private condos and all HDB flats in Singapore are on 99-year leases. When the lease ends, the land and building go back to the State.
- Lease decay is not linear. On simple discounting maths, a 60-year lease is worth 83–95% of freehold, depending on the discount rate used. A 30-year lease is worth only 59–77%.
- Full CPF use needs the remaining lease to cover the youngest buyer to age 95. Shorter leases mean pro-rated CPF and a smaller pool of buyers.
- An HDB loan can run only to the remaining lease minus 20 years.
- En bloc is an option, not a plan. New consent rules for older estates have been passed but have no start date yet.
How leasehold works in Singapore
Singapore homes come in three main tenures: 99-year leasehold, 999-year leasehold and freehold. In practice, 999-year land is valued much like freehold. The 99-year lease usually runs from the date the land lease was granted, not from your purchase or the project’s completion. A new launch often has a few years of its lease used up before you get your keys.
When a 99-year lease ends, the land returns to the State, and owners get nothing for it. That is also true for HDB flats, unless the estate is redeveloped before then.
Freehold is not a guarantee of value either. A freehold building still ages, needs repairs and may be sold en bloc. You own the land for ever, but you still have to manage the building on it.
The maths of lease decay
Think of a lease as a stream of future use or rent that stops on a fixed date. Its value today is the present value of that stream. A freehold property’s stream never stops.
The table shows the value of a lease as a percentage of an otherwise identical freehold property. It assumes constant net rent, and three different discount rates.
| Years left on lease | At 3% | At 4% | At 5% |
|---|---|---|---|
| 99 | 94.6% | 97.9% | 99.2% |
| 80 | 90.6% | 95.7% | 98.0% |
| 60 | 83.0% | 90.5% | 94.6% |
| 50 | 77.2% | 85.9% | 91.3% |
| 40 | 69.3% | 79.2% | 85.8% |
| 30 | 58.8% | 69.2% | 76.9% |
| 20 | 44.6% | 54.4% | 62.3% |
Two lessons follow.
Decay speeds up. Going from 99 to 80 years left costs very little. Going from 40 to 20 years left costs a lot.
Low yields make lease length matter more. The lower the return that buyers demand, the more value sits in the distant years that a leasehold owner never gets. Rental yields on Singapore homes are low relative to prices, which suggests buyers accept low returns. At 3%, even a fresh 99-year lease is worth about 5% less than freehold on paper.
Here is a worked example. Say a property earns S$36,000 a year in net rent, and you discount at 5%. As freehold it is worth S$720,000 (36,000 ÷ 0.05). With 30 years left on the lease, the same income is worth about S$553,400, or 77% of the freehold value. If you pay close to the freehold price for that lease, you are paying for decades of income you will never receive.
Real prices also reflect location, condition and market mood, so the table is a reasoning tool, not a price list. For more on discounting, see our guide to NPV and MIRR.
The rules that make short leases harder to sell
In practice, older leases fall in value faster than the pure maths suggests. Rules cut the number of people who can buy them with CPF or a loan.
CPF. The CPF Board lets you use CPF in full only if the remaining lease covers the youngest buyer using CPF to age 95. If not, you can use only a percentage of the price or valuation. For example:
- A 40-year-old buys a home with 55 years left. 40 + 55 = 95, so full CPF use is allowed.
- A 35-year-old buys the same home. 35 + 55 = 90, so CPF use is pro-rated, and the buyer needs more cash.
Every year of lease you use up shrinks the pool of younger buyers who can pay with CPF. That is your future resale market.
HDB loans. An HDB loan runs for the shortest of 25 years, age 65 minus the buyers’ average age, or the remaining lease minus 20 years. A flat with 40 years left can carry at most a 20-year HDB loan, which pushes up the monthly instalment.
Bank loans. Banks set their own policies on short leases on top of MAS limits. Ask the bank before you sign, not after. Model the instalment at different tenures with the Propwise mortgage calculator.
How to value a leasehold home, step by step
- Find the true remaining lease. Ask for the lease start date, or check it in a title search. Do not rely on the “TOP year” in a listing.
- Compare like with like. Use URA’s transaction search to compare prices per square foot nearby. Look at leasehold projects of similar age, newer leasehold projects and freehold projects. The gaps tell you how the local market prices lease decay.
- Value the lease at your exit, not today. If you plan to sell in 15 years, a home with 70 years left today will have 55 left then. Will a 40-year-old buyer still be able to use full CPF? Will banks lend?
- Apply a discount rate you can defend. Use the table above, or your own figures, to test whether the asking price leaves room for decay.
- Count the running costs of age. Older estates may face rising maintenance fees and big repair bills paid from the sinking fund. Read the MCST’s accounts and minutes. Our checklist for buying into an older development covers what to ask.
- Set a walk-away price. Decide your maximum before you negotiate, and stick to it.
En bloc: an option, not a plan
Many older leasehold condos trade on hopes of a collective sale. Treat that as a bonus, never the reason to buy.
Under current law, a collective sale needs owners holding 80% of share values and floor area in estates at least 10 years old, and 90% in younger ones. The Land Titles (Strata) (Amendment) Bill 2026 will lower this to 70% for estates aged 40 to 59 years, and 65% for estates aged 60 years or more. Parliament passed it on 8 September 2026, after the second reading debate that day, but it is not yet in force: no commencement date had been announced as at 2 October 2026. Until then, the old thresholds apply.
The bill also makes a sale harder to start and quicker to close:
- 35% of owners must sign up before a sale can begin.
- Owners have a six-month window to sign, instead of 12 months.
- A failed attempt is followed by a three-year cooling-off period.
Lower thresholds may make old leasehold estates easier to sell en bloc. But a sale still depends on developers wanting the site at a price owners accept. Not every attempt succeeds. See our guide to en bloc sales for the process.
Older leasehold, short leases and freehold: who should buy what
- Buying a home for life in your 50s or 60s? An older or shorter lease can make sense if the discount is large and the lease outlasts your own needs. Resale value matters less if you never plan to sell, but think about your heirs.
- Young buyer, or planning to sell? Lease decay and CPF rules work against you over time. Pay attention to how many years will be left at your likely exit.
- Investor? Rental yields on older leaseholds can look high. Check how much of that “yield” is really your capital wasting away.
- Freehold? Pay the premium only if you will hold long enough to benefit, and if the location would hold value anyway. Freehold in a poor location is still a poor location.
Bottom line
Leasehold is not bad. It is a wasting asset, and the price should reflect how much of it is left. Value the lease you will have at your exit, not the one you buy today. Account for the CPF age-95 rule and loan limits that thin out future buyers. Treat en bloc as an upside, not a strategy. If the asking price looks close to freehold for a lease past its middle age, you are paying for years you will not own.
Sources
- How much CPF savings you can use for your home purchase — CPF Board, checked Oct 2026
- HDB loans guide — gov.sg (MyNiceHome), 24 Aug 2026
- Loan tenure and loan-to-value limits — MAS, updated 27 Mar 2024
- Proposed amendments to the collective sale regime — Ministry of Law, 4 Aug 2026
- Second reading speech, Land Titles (Strata) (Amendment) Bill 2026 — Ministry of Law, 8 Sep 2026
- Private residential transaction search — URA, accessed Oct 2026
- Bills introduced (Land Titles (Strata) (Amendment) Bill 2026, passed 8 Sep 2026) — Parliament of Singapore, checked Oct 2026
