At which tenure should I sell my leasehold condo

When considering the sale of a 99-year leasehold condo in Singapore, it is crucial to understand the concept of lease decay and its impact on the property's value. Here are some key points to help you decide:

Lease Decay Phases

The value of a leasehold property does not depreciate linearly. It follows a curved pattern, often illustrated by Bala’s Curve. Here are the phases:

• Initial Stability (99 to 95 years remaining): Minimal depreciation.
• Slow Depreciation (95 to 85 years remaining): Value decreases at a slow rate.
• Moderate Depreciation (85 to 65 years remaining): Depreciation rate increases.
• Rapid Depreciation (65 to 30 years remaining): Significant annual depreciation.
• Terminal Phase (less than 30 years remaining): Value drops dramatically.

Optimal Holding Period

To maximise the value of your leasehold condo, it is generally advised to hold it for about 30 to 40 years. At this point, the property has gained most of its potential value, and there is still a substantial lease period remaining, making it attractive to buyers.

Market Considerations

As the lease shortens, the property becomes less marketable, and financing options become more restricted. For example, properties with less than 30 years remaining on their lease face challenges in securing bank loans and CPF usage.

Decision Timeframe

If you are nearing the 30 to 40 year mark, it might be a good time to consider selling. However, if your property is still within the initial stability or slow depreciation phase, holding on for a bit longer could be beneficial.

Lease Top-Up and Collective Sales

If you are closer to the end of the lease, you might consider lease top-up options through the Singapore Land Authority or exploring collective sales, which can provide a profitable exit strategy.

For more detailed analysis and to check the current market trends, you can visit EdgeProp Singapore to get the latest insights and listings.