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Difference in price PSF between freehold and leasehold properties
18 Dec 2017 (214 views)  


I bought a 99 year leasehold townhouse in 1983. At that time, most condos were freehold. The price PSF for the leasehold must be about 20% cheaper than a comparable freehold property adjusted for size and location.

Many people avoided a freehold property because it was a depreciating asset. My actuarial calculation indicated that the difference should be less than 5%. So a discount of 20% was worth it.

Recently, I saw this table used by the government to calculate the differential premium to top up a lease to 99 years. It showed that the difference between a 99 year leasehold and a freehold property should be 4%. It matches with my calculation 35 years ago.

Click here

When I bought the townhouse in 1983, I paid $200 PSF. Today, many buyers are paying $1,500 PSF for leasehold property in the same area.

 


Difference in price PSF between freehold and leasehold properties
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I bought a 99 year leasehold townhouse in 1983. At that time, most condos were freehold. The price PSF for the leasehold must be about 20% cheaper than a comparable freehold property adjusted for size and location.

Many people avoided a freehold property because it was a depreciating asset. My actuarial calculation indicated that the difference should be less than 5%. So a discount of 20% was worth it.

Recently, I saw this table used by the government to calculate the differential premium to top up a lease to 99 years. It showed that the difference between a 99 year leasehold and a freehold property should be 4%. It matches with my calculation 35 years ago.

Click here

When I bought the townhouse in 1983, I paid $200 PSF. Today, many buyers are paying $1,500 PSF for leasehold property in the same area.

 

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