I had a conversation with a buyer recently that I think many people can relate to.
He found a unit he really liked. Good size. Good layout. Price looked attractive.
Then he asked me a very simple question: “Why is this one so much cheaper than the others?”
And the answer?
He found a unit he really liked. Good size. Good layout. Price looked attractive.
Then he asked me a very simple question: “Why is this one so much cheaper than the others?”
And the answer?
Lease decay.
Let’s start simple — what is lease decay?
In Singapore, most HDB flats and many condos are sold on a 99-year lease.
That means:
Your property comes with a countdown timer.
Every year that passes, the lease gets shorter.
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90 years left → still very healthy
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70 years left → still transactable
-
50–60 years → things start to change
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Below that → restrictions start kicking in
Nothing dramatic happens overnight.
But slowly…
Your pool of future buyers starts shrinking.
Why? Because 3 things start tightening
Lease decay doesn’t affect how you stay.
It affects how you sell.
And it does this through 3 main levers:
1. Banks become more conservative
As the lease shortens, banks:
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Reduce loan quantum
-
Tighten approval criteria
Meaning your buyer needs more:
-
Cash
-
CPF
Or worse… may not qualify at all.
2. CPF usage gets restricted
This is the part many people don’t know.
CPF has a key rule:
To fully use your CPF Ordinary Account (OA) savings for property, the remaining lease must cover the youngest owner until age 95
If it cannot:
-
CPF usage is reduced
-
Eventually, may not be allowed at all
3. Buyer confidence drops
Even if someone can afford it…
They start thinking:
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“Will I get stuck next time?”
-
“Can I sell this easily?”
And once doubt comes in?
Demand weakens.
So… when exactly do things start to change?
This is the part most agents don’t explain clearly.
Let’s break it down simply 👇
🟢 Above ~60–65 years lease left
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Generally “safe zone”
-
CPF usage is still flexible
-
Bank loans are still relatively normal
-
Buyer pool is wide
👉 Most people won’t feel much restriction here.
🟡 Around 40–60 years lease left
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CPF usage starts to be prorated
-
Loan quantum may be reduced
-
Some buyers start getting priced out
👉 This is where the market becomes more selective.
🔴 Below ~40 years lease left
-
CPF usage becomes very limited
-
Loans become much harder to obtain
-
Buyer pool shrinks significantly
👉 This is where selling can become challenging.
A simple way to visualise this
Think of your property like your phone or laptop.
When it’s new:
-
Everyone wants it
-
Easy to sell
-
High value
A few years later:
-
Still works perfectly fine
-
No issue using it daily
But much later…
Even if it still works, buyers start asking:
-
“Battery still okay?”
-
“How long can this last?”
And when you try to sell it?
You won’t get the same price — not because it’s bad, but because time has already been used up.
“But I’m buying to stay…”
I hear this a lot.
And yes — if you’re staying long term, lease decay feels less urgent.
But here’s the honest truth:
Most people don’t stay forever.
Plans change.
-
You upgrade
-
You downgrade
-
Life situation shifts
And when that happens…
Lease decay problem can become real.
The mistake most buyers make
They focus on:
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Entry price
-
Renovation
-
Monthly affordability
But forget one critical question:
“Who will buy this from me later?”
Because the moment you buy…
You’re already setting up your future exit.
So what should you actually do?
Instead of avoiding older properties completely, ask:
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What is my holding period?
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Who is my future buyer profile?
-
Will this property still be financeable later?
Because:
You may struggle to sell it later.
Kopi for thoughts
Your property can be:
-
Beautiful
-
Well-renovated
-
Comfortable
But the market doesn’t just look at that.
It looks at:
-
Remaining lease
-
Financing conditions
-
Buyer demand
And all of that is affected by lease decay.
Lease decay doesn’t hit you when you buy. It hits you when you try to sell.
💬 So I’m curious — Would you choose:
A) A newer flat at a higher price, or
B) An older flat at a lower entry price?
If you found this useful, save this post — because this is one of those things people only realise after it’s too late.
Rachel, 92336690
