Why More Investors Are Eyeing Leasehold Properties in Prime Locations

Leasehold homes in prime districts offer affordability and accessibility. Discover why investors are shifting focus to these properties and how they can outperform freehold counterparts in certain markets.

lakesidegrande

Jul 4, 2025 - 15:36

Why More Investors Are Eyeing Leasehold Properties in Prime Locations

In Singapore’s property market, freehold homes have long held a certain allure. The idea of perpetual ownership is comforting to many buyers. But recently, savvy investors are increasingly looking at leasehold properties in prime locations, and with good reason.

What’s driving this shift? Let’s explore why leasehold homes are gaining traction among investors, even in a market where freehold titles are traditionally seen as superior.

1. More Affordable Entry Price

One of the most obvious advantages of leasehold properties is their lower price compared to freehold counterparts in the same location. This lower quantum allows investors to:

Enter coveted prime districts with less capital outlay
Reduce financing burdens while maintaining exposure to high-demand areas
Diversify their property portfolio instead of tying up funds in a single asset

For example, a leasehold condo in District 9 or 10 might cost significantly less per square foot than a freehold unit nearby, even though both offer similar amenities and accessibility.

2. Strong Demand for Prime Locations

Prime locations such as Orchard, River Valley, and Marina Bay continue to attract high tenant demand. Tenants, especially expatriates and professionals, prioritise convenience, proximity to workplaces, and lifestyle offerings over land tenure.

This means a leasehold unit in a prime area can still deliver:

Strong rental yields
Faster occupancy rates
Consistent demand, even during market slowdowns

From an investment perspective, the focus shifts from holding tenure indefinitely to maximising returns over the investment horizon.

3. Modern Facilities and Design Appeal

Many leasehold projects are newer developments with state-of-the-art facilities, sustainable features, and efficient layouts. Buyers often find these more attractive than older freehold units that may lack the same level of design sophistication or require higher maintenance.

For investors targeting a younger tenant base or looking for properties with strong resale appeal in the near term, leasehold condos with modern amenities often stand out.

4. Urban Redevelopment and En Bloc Potential

Singapore’s land scarcity means older leasehold developments in prime areas can become en bloc candidates, especially as the lease runs down. Developers tend to favour such sites because:

They are more cost-effective to acquire than freehold plots
They are often situated in mature, well-connected neighbourhoods

This offers investors a potential windfall if the collective sale price exceeds market expectations.

5. Changing Perceptions of Leasehold Tenure

While freehold properties retain their appeal for legacy planning, many investors are realising that few buyers hold onto properties for generations. The average holding period in Singapore is often between 10 to 20 years, well within the useful lifespan of a leasehold property.

With this shift in mindset, more are willing to trade perpetual ownership for lower entry costs and higher near-term returns.

Final Thoughts

Leasehold properties in prime locations offer a compelling proposition: affordable entry into high-demand districts, strong rental prospects, and potential capital gains within a typical investment timeframe.

While tenure remains an important consideration, savvy investors recognise that location, demand, and property features often carry more weight when it comes to actual returns.

As Singapore’s property landscape evolves, leasehold homes—particularly those in sought-after areas—are proving they deserve a closer look.