How the remaining years of a property can affect its price

The 191 private terraced houses in Geylang Lorong 3, with land leases expiring in 2020, have been in the news. It is the first case in Singapore where residential land is taken back by the government due to expiry of the land lease. This has thrust the issue of residual tenure and property value in the spotlight.


In July 2000, the Singapore Land Authority (SLA) made public a table that expresses the value of a leasehold land as a percentage of a freehold land. Assuming that a freehold land is worth $100 million, the same piece of land will be worth only $96 million (96%) if the tenure changes to 99-years.


This table, commonly known as Bala’s Table (below) is often used by industry players as a guide in valuation and a way to calculate differential premium. This indicates that the government and many real estate players recognise that the remaining tenure of a land does have an impact on property values.