Give some value to a HDB flat when the lease has expired

I have a discussion with a friend about the HDB mess.

He said that the people who bought expensive HDB flats in the last 30 years paid too much and they will see their investment have no value at the end of the lease.

We agreed on this point. But we disagreed on the alternative approach.

I suggested that the government should allow the lease to be renewed for 10 years at a modest premium.

If this is adopted, the value of the flat will not become $0 at the end of the lease. It might retain a value of (say) 20% of the value for a new flat.

He liked the lease to be renewed for another 99 years.

I told him that the cost of a new 99 year lease is too expensive. It could cost (say) $200,000 for a 4 room flat, which is clearly unaffordable.

He did not listen to me. He wanted to stick to his view.

I told him – I am more knowledgeable about the cost of a 10 year and 99 year lease. Can you respect my expertise in this field? He finally listened.

This is a common problem. We agree that the PAP policy is not good for the people. But we have different ideas about how it can be solved. Instead of arguing for our point of view, we should be prepared to support and respect other people who is more familiar with the topic.

We should not stubbornly stick to a view which is not likely to be feasible.


Tan Kin Lian




15 Responses to “Give some value to a HDB flat when the lease has expired”

  • TKL from PAP?:

    I suggest all your friends to be sitting 1 or 2 tables away from you at the coffee shop with their backs facing you. Why? because all of them are stubborn, only TKL is special?

    These are the key concerns.
    PAP promise that HDB price will always appreciate in value. This has lured many People to pay sky high prices for their depreciating “leased” hdb apartment. Half way along the lease, literally no buyers, poor people investments gone busted.

    So you think 10 years extension will pacify the people to give the PAP another term in office? WTF!

    Volt for Change, so that others will resolve the problems entirely for the People.

    Public Housing built on Public Land but Public forced to pay Open market price for the land, thus imply => means 999 years or Free Hold to be equitable.

    FXXX TKL if he is still stubborn to suggest any lesser. No Mandate, No 2nd Chance.

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  • oxygen:

    MR. TAN KIN LIAN, you claimed this expertise -

    “I told him – I am more knowledgeable about the cost of a 10 year and 99 year lease. Can you respect my expertise in this field?”


    TO AVOID DOUBT, PLEASE DEMONSTRATE TO US in your VALUATION MODEL in high finance, thanks!!

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  • Harder Truths:

    This s not solving any problem – just delaying the inevitable.

    A solution means a change to how $G locals are being used as slaves to support a small number of people in power.

    Until then – which I doubt – forget about getting any relief. Things will only get worse since the clowns need more and more money as time goes by.

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  • Darth Vader:

    So tkl claims to be “more knowledgeable” about the costs of a 99-year lease and a 10-year lease? It might retain another say 20% of its value after extending the lease by 10 years? HEY STUPID, WHO IS STUPID ENOUGH TO PAY 20% OF THE VALUE OF A 99-YEAR LEASE FOR A FLAT WITH ONLY 10 YERS LEFT ON ITS LEASE????!!!! Maybe YOU are, but who else????!!!!

    The real issue here is NOT the 99-year lease, the REAL issue is the OBSCENELY OVERPRICED cost of public housing due to the pap’s obsession with making money!!!! Charging say $60,000/- or so for a 99-year lease would not be much of an issue because at say $500/- a month the flat will be fully paid up after 10 years. But charging 10 times that amount as is commonplace these days, HOW LONG to pay up at $500/- a month, 100 years????!!!!

    For a self-proclaimed “expert” tkl sure doesn’t seem to understand something this basic. I had my old droid R2-D2 perform a scan of tkl. The results were most… enlightening… to say the least. Apparently tkl’s lower intestinal tract opens into his cranial cavity and excretes wastes through his oral orifice. Okay, it all makes perfect sense now. NO WONDER tkl keeps posting all these inane lunatic ravings all the time…

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  • NotMyProblem:

    There was nothing wrong with the 99-years.

    The problem was PAP lied about the value of the flat will not depreciate.

    There was too much money involved, CPF money, believing the lies of the PAP.

    CPF money is meant for retirement. Now people feel cheated, one by the lie of PAP on the value of HDB, and two the inadequacy of CPF. Now the money is now with held by the govt.

    The problem is PAP lies!!

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  • Greedy Thieves:

    Just VTO! These thieves made you pay for land and everything for the HDB but convenient using their CB mouths to steal and then profiteering from reselling the land to private developers just because the lease it up.
    Profiteering is the goal now, not affordable public housing. Many countries renew the land lease at token price to provide for housing solution.
    The greedy millionaire ministars who enriched themselves with tax monies cannot provide any better solutions.

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  • Asd:

    Santa Tan… black and white is 99 years… signed is signed.. they should go sue the person whom they trusted.

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  • Old Uncle:

    Condo 99 years can enbloc,
    all make $$$,
    Why HDB 99 years cannot?
    Poor will always poor,
    I will vote who can gimme HDB enbloc!

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  • Asdd:

    Tan king kong knows ntuc can food better than any1

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  • opposition dude:

    “We agree that the PAP policy is not good for the people. But we have different ideas about how it can be solved. Instead of arguing for our point of view, we should be prepared to support and respect other people who is more familiar with the topic.”

    Mr Tan, you as a fellow Singaporean should know that PAP has only THEIR way of “solving” a problem be it an increase in money paid, fine or some policy that only they themselves agree is effective. One excellent example will be the easing of CPF rules for older flats.

    As we are all aware, the number of buyers for older flats only went down dramatically after Lawrence Wong’s great announcement. This in turn led to their values dropping a bit and that’s natural, it’s simple supply and demand economics after all. Please also remember that before Wong’s announcement the CPF rules for older flats was unchanged and yet we all saw good, if not great, demand for older flats. Why is that so?

    So after the great announcement those who are living in these older flats are grumbling that there aren’t many buyers and that their values have dropped. Out of nowhere comes the wayang excuse that CPF rules are the stumbling block to people who want to buy these old flats and as a result the rules were “tweaked”.

    Well, I don’t know about the rest of you all but I sure as hell am certain that this “tweak” has not resulted in the older flats’ values going up nor has demand gone way up before Wong’s announcement. So this just goes to show that even PAP knows it’s wayang and hopeless but needs something as a scapegoat.

    I’m not a scholar or anything but I do not know how to solve the housing crisis when so many people have paid hundreds or thousands for a new flat in a mature estate or a resale flat. It’s PAP’s problem to solve and if they can’t solve it then I hope the next party will be able to.

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  • tan kin lian brainless:

    why talk as if pap is a going concern?

    isn’t the elephant in the island pap?

    just remove the elephant from the island.

    then implement whatever pap did not do. as long as it is something pap has not done, implementation is sure to work. because pap is a failing concern and chooses losing projects. doing exactly opposite to pap shall work.

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  • I luv PAP:

    Old Harry is so great when he said he flat value will never drop.

    A great man indeed. Proven.

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  • HDB flats depreciate to ZERO:

    No point. PAP should be held accountable for allowing CPF (retirement) money to be used to buy an over-priced, poor quality depreciating asset. (A depreciating asset is not a store of value.) HDB was sued to drain the CPF accounts of Singaporeans.

    Recently I went to see old 5-room flats (44+ years old) at Toa Payoh. The ERA agent told me the owners are asking for around $425,000 which is ridiculous considering only 55 years left in the lease and the price of a NEW 5-room flat from HDB in the same state is only around $550,000.

    I told the ERA agent my firm offer for the old flats is $305,000 (=$550,000 x 55/99). I pointed out that HDB flats are depreciating asset which will be worth ZERO at the end of the 99-year lease despite HIP1 and HIP2. An asset (like HDB flat at the end of the lease) which is no longer useable has zero value. This is a fact.

    I suggested to the agent to ask the flat owners to approach HDB to sell them HALF the REMAINING lease under the HDB Lease Buyback Scheme (LBS). I will pay TWICE the amount offered by HDB to buy half the remaining lease. LBS value flats based on the remaining lease. This means the shorter the remaining lease the lower the value of the flat. This also proves that HDB flats are basically DEPRECIATING assets. So putting CPF money into HDB flats is the mother-of-all mistakes which PAP has to be held accountable for.

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  • Will:

    IMHO, neither Mr Tan nor friend is corright. Simply put, you cannot get value (something) out of nothing easily. So why do HDB leasees expect profit from their rental apartment?

    May I suggest 2 root causes as I see it:
    1. Asset appreciation idea that a certain politician marketed well as everyone shares in Singapore success.

    2. Human greed (nature) – when tenants stay, we expect rental income. When leasee stay, they expect profit after occupying that space for decades.

    Neither is fair or sustainable for the next generation that will bear the artificially inflated costs due 2 factors above. Therefore, public housing (low cost in most countries) should go back to that core principle.

    Else, let free market decide. Crash means crash, no bail out. If you say otherwise, we go casino, I win I keep; I lose you share the loss with me. Deal?

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  • TKL A Lemming:

    Useless TKL said careful just because he is playing along greedy pigs playbook.
    TKL talked about thinking out of box, he is just talking cock, as having been nurtured in the RC he is incapable of doing that, unwittingly sticking with status quo.
    He is just another lemming with a caged mindset.

    Who said lease should be fixed at 99 or as what pigs dictate?

    The greedy pigs created the HDB issue because of greed. They are after your hard-earned savings and money, using lease to steal your HDB without paying a cent. With a stroke of policy change, they took away all your investment in HDB.

    Dafts should always remember that you paid for the land in HDB and upkeeping.
    Land has lots of value and when the HDB is resold, the profit of land should be returned to you, enough for retirement. It is evil of PAP to profit at your expense and robbed you of a decent retirement. PAP has zero concern of you and your well being or livelihoods.

    New government could change the game rule of HDB and recreate the wealth of HDB dwellers, as well as providing long term housing solutions and market stability.
    Being an asset and long term housing go hand in hand.

    SDP provided a solution, incorporating the concerns of most stakeholders, go read their policy papers.

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