The receptiveness towards leasehold over freehold in Singapore has been improving over the years. Are the buyers more tolerant of the shortcomings of leasehold in the rising property market we are in now? Or there are simply not so many available freehold markets that we can pin our hope on inn buying in the land-scarce Singapore.

1. 1. My gut feel for the rising acceptance of leasehold property is very much to do with the affordability of the leasehold unit in comparison to a freehold development. It is especially so for the HDB upgraders who find the price gap of a resale HDB and leasehold private to be relatively smaller. Moreover, HDB units are by nature 99 years leasehold. With the escalating HDB resale pricing, the idea of owning leasehold development with facilities does hold its attractiveness to certain buyers.
2. Another factor that many investors are interested in is the relatively high yield.  Leasehold is most likely to fetch higher yield than freehold. Yield is the return based on purchase price: 2 similar pieces of properties holding different tenure will be likely to fetch the same rental, since the tenants will be indifferent to the status of tenure. As leasehold is of a supposedly lower purchase price, as a result it is able to give a higher return for yield. You may want to look at the higher yield in order to compensate for the decaying house value.
3. The price gap between freehold and leasehold narrows much in a rising market and widens in a down market. Therefore, you may want to be mindful that you are not able to get a satisfactory selling price should you be disposing in a bad time. And the problem may be compounded more with the accelerating depreciation rate kicking in after the initial years. Financing for a prospective buyer also poses a problem, since bank valuation has to factor in the lease in balance therefore the loan amount will be much restricted.

With HDB as a leasehold development still able to fetch record breaking price in many old and established locations, many Singaporeans start to look at leasehold developments more positively. However you have to be fully informed of the deal you are getting in. Check out the following article on the ‘dirt cheap’ landed terrace houses you are able to get from Singapore due to its limited lease tenure in balance.

http://www.asiaone.com/Business/My+Money/Property/Story/A1Story20100129-195312.html

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