Lease decay is the systematic loss of value as a 99-year leasehold property approaches expiry. The Bala curve (URA's official depreciation table) values 99-year leasehold at 96% of freehold when fresh, falling to 75% at year 50, 50% at year 75, and 20% at year 90 (as of 2026-05).
Singapore's residential housing stock is overwhelmingly 99-year leasehold — both for HDB (always 99 years) and most private condos (the majority are leasehold, with freehold limited to older estates and select premium developments). Understanding how that lease value decays over time is essential to both pricing and financing decisions, especially as HDB and private leases age into their second 50 years.
The Bala curve published by SLA/URA quantifies the lease-decay relationship in a way that banks, valuers, and CPF rules all reference (as of 2026-05). The most consequential practical thresholds: CPF usage caps drop when the remaining lease is less than the youngest buyer's age covering them to 95, and bank loan tenure is capped at the remaining lease minus 5 years (subject to MAS LTV rules). These thresholds typically bite in earnest from year 60 onwards. The VERS programme for HDB flats nearing the end of lease is expected to begin pilot in the first half of the 2030s.
What Does It Mean?
Lease Decay refers to how a 99-year leasehold property loses value as the remaining lease shortens. The decline is not linear — values hold relatively well above 60 years, but drop more sharply below that threshold. A property with less than 30 years remaining may have difficulty obtaining bank financing.
Worked Example
A 99-year leasehold property does not lose value at a constant rate. Approximate value retention at different lease lengths:
| Remaining Lease | Approx. Value Retained |
|---|---|
| 99 years (new) | 100% |
| 80 years | ~95% |
| 60 years | ~80% |
| 40 years | ~55% |
| 30 years | ~35% (CPF restricted) |
| 20 years | ~20% (bank loans difficult) |
Why It Matters
Lease decay is the silent value eroder that catches many buyers off guard. Properties below 60 years remaining start facing CPF and financing restrictions that significantly reduce the buyer pool.
Where to Find This on ShiokNest
- Property detail pages (tenure section)
Look for the tooltip icon next to this metric on ShiokNest for a quick reminder of its definition.
Official Sources
Try the Calculator
Loading quiz...
Bala curve at key lease ages (approximate, per SLA reference data):
| Lease remaining | Value as % of freehold equivalent |
|---|---|
| 99 years (fresh) | ~96% |
| 75 years | ~89% |
| 60 years | ~82% |
| 50 years | ~75% |
| 40 years | ~64% |
| 30 years | ~50% |
| 20 years | ~35% |
Practical financing impact: a 35-year-old buyer purchasing a 50-year-remaining lease can typically use CPF only up to "lease covers to age 95" — meaning the lease must extend to age 95, i.e., 60 years remaining, before full CPF utilisation is allowed. Below that threshold, CPF withdrawal is pro-rated.
Worked example: 99-year leasehold condo at year 30 remaining (so 69 years used). Bala curve ≈ 50%. If the equivalent freehold sells at S$2,000 psf, the leasehold should trade at roughly S$1,000 psf — though the market often prices in a modest "structural premium" on certain leasehold projects with strong location moats.
- Check the remaining lease on any leasehold purchase — for HDB resale, use HDB\'s lease balance tool; for private, check the title.
- Model your CPF eligibility at purchase — the lease-to-95 rule will reduce CPF withdrawal proportionally if the lease is shorter.
- Plan exit by year 60–65 of remaining lease if you want a deep buyer pool. Below 60 years, the financeable buyer pool shrinks significantly.
- For pre-1980 HDB flats, watch VERS policy announcements — the eventual buyback compensation will set the floor on values for that vintage.
Frequently Asked Questions
Can I still get a mortgage for a short-lease property?
Does lease decay affect freehold properties?
When does CPF usage start being restricted?
When the remaining lease no longer covers the youngest buyer to age 95. For a 30-year-old buyer, that's 65 years remaining lease; for a 45-year-old, 50 years remaining.
Can the lease be topped up?
For HDB, no — there's no top-up mechanism for resale flats. For private leasehold, lease top-ups exist but require SLA approval and significant premium payment; they're unusual outside of large redevelopment plays.
What happens at lease expiry?
The land reverts to the state and the structures are demolished. For HDB this is the canonical lease-end scenario; for private leasehold strata projects, the entire collective can attempt an en-bloc top-up but the economics are challenging.
This glossary article is auto-generated from ShiokNest's financial data and updated periodically. Rates and figures are current as of May 2026. Check official sources for the latest.