Leasehold cluster home prices outperform market

Prices of 99-year leasehold cluster homes increased the most between 2009 and 2013, outperforming three other landed housing types, revealed property firm SLP and reported in the media.

In a report, SLP stated that 99-year leasehold cluster home prices climbed 20.1 percent during the period, while freehold cluster homes rose 10.2 percent. Prices of 99-year leasehold and freehold landed homes with individual land titles appreciated by 15.1 percent and 18.7 percent respectively.

“For example, the median transacted price of Springhill, a 99-year leasehold cluster housing project, in the first half of 2009 was S$324 psf of strata area. In the second half of 2013, the median transacted price of houses in this development increased 83 percent to S$593 psf,” stated the report.

According to Nicholas Mak, executive director of research and consultancy at SLP, the capital gains of cluster homes were buoyed by new launches which transacted at higher prices. The higher gains can also be attributed to the lower base price of such homes, he said.

Homes with land tenures of 99 to 105 years were grouped by the report under the 99-year leasehold category, while the freehold group includes those with land tenures longer than 105 years and freehold.

But while they posted the highest capital gains during the period, 99-year leasehold cluster homes recorded the fewest transactions with 1,125 sales, while freehold cluster homes registered 1,492 sales. Freehold landed homes with individual land titles saw the highest number of transactions at 11,356 sales. Its 99-year leasehold counterpart recorded 2,051 sales.

Over the last two years, however, landed home prices have been hit by various cooling measures and loan curbs which has weakened demand, said Wong Xian Yang, research and consultancy manager at OrangeTee.

Prices of landed homes dropped 6.3 percent by end-2014 from its previous peak in Q3 2013, or faster than the 4.3 percent decline posted by non-landed private homes, according to quarterly data from the Urban Redevelopment Authority (URA).

“The landed segment would be out of reach for most HDB (Housing and Development Board) upgraders, which is currently the main demand driver in the market. According to 2014 caveat data, only 240 out of 964 landed purchasers came from HDBs,” shared Wong.


Romesh Navaratnarajah, Singapore Editor at PropertyGuru, edited this story. To contact him about this or other stories email