Experts say there could be merit in investing in an ageing 99-year leasehold property, given the higher rental yields
PROSPECTS are generally dim for older 99-year leasehold developments, with prices and property values declining as the tenure dwindles. But analysts said high rental yields from these ageing properties may sometimes negate potential losses from depreciation.
According to Nicholas Mak, chief research officer at Mogul.sg, a property’s rental value is independent of its tenure. “A freehold and leasehold property, with the same characteristics and in the same location, will command the same rental rate for the same type of housing unit,” he said.
Some investors may therefore opt for an older 99-year leasehold property – which is likely to be cheaper than freehold properties and new 99-year leasehold projects – to enjoy higher rental yields, said Wong Siew Ying, PropNex’s head of research and content.
