HDB lease decay – real or not?

There is a lot of discussion about the HDB lease decay. I will now add my view.

The HDB lease decay is used to describe the situation that the value of the HDB flat will become $0 at the end of the 99 year lease, and the value will start to drop after the remaining less becomes less than 30 years.

This is a fact. It cannot be disputed.

If so, why did our government leaders said that the HDB flat was a good investment? Indeed, a generation of owners have made a large profit when they sold the HDB flat that they bought earlier.

The phenomenal growth in the value of the HDB flat during the past decades came from three sources:

a) The HDB flats sold prior to 1980 were indeed cheap. It was sold by HDB at subsidized prices, based largely on construction cost. The value of land was negligible then.

b) All property prices, HDB and private, has escalated during the past five decades to the high level today.

c) There was a large boost during the last 15 years due to the influx of foreigners. This has reached its limit.

Due to these factors, a 5 room HDB flat in Marine Parade was sold for $35,000 in 1975. The same flat today, with a remaining lease of 50 years, is asking for $850,000.

These factors that contributed to the large growth in value is no longer available to the buyer of the HDB flat today. The buyer has to pay the current price, which reflects the high market price today. There is a small subsidy by the government, but not to the same extent as in the past.

The buyer cannot count on the huge growth in property prices in the future. The current prices are beyond the “affordability level”.

The reality is that the buyer of a HDB flat pays a high price for their flat and faces the prospect of the lease decay. It is no longer a good investment. It should be treated as paying advanced rental of the HDB flat for the remaining term of the lease.

Did the leaders “lie” when they said that HDB flat was a good investment? No, they did not. It was a good investment at that time. But times have changed. It is no longer a good investment today.


Tan Kin Lian




12 Responses to “HDB lease decay – real or not?”

  • Bloody Tan:

    Tkl, are you twisting those words and trying to confuse with what they said in the present days and trying to substantiate with the past era “leaders” to the present days statements they made. Your last statement made your article look stupid.

    Example; dated 2018-09-03

    Minister of Transport Khaw Boon Wan assures Singaporeans that 50-year-old HDB Flats will continue to appreciate.


    GD Star Rating
  • HDB flats depreciate to ZERO:

    Lease decay makes HDB flats basically a DEPRECIATING (to zero) asset. This is a fact. It is also true that buyers (or sellers) new or resale HDB flats cannot count on the huge growth in property prices in the future because the current prices of new flats are beyond the “affordability level”. The era of “free lunch” is over with a “property bubble”.

    HDB owners will be wise to get as much money out of their flats asap and put it back in their CPF accounts (where it can earn 2.5% p.a.). They should use thew HDB Lease Buyback Scheme. This scheme proves that HDB flats are depreciating assets.

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  • Our Leaders Did Not Lie ?:

    You mean our leaders cannot look into the future and predict or forecast the HDB prices ? They are the ones who determined that HDB house will have to be returned to HDB and therefore they knew that the prices will become zero.

    Of course they mentioned it to win election. How come now all the leaders especially Woody and Marbok dare not show their faces now regarding this ?

    GD Star Rating
  • oxygen:

    TWO ELDERLY COUPLES HAVE ONE CHILD EACH, when they go to Tern Sua, their children (if they met and married each other) needs only one flat.


    So decaying lease still got value?

    PAPpypolitics and PAPpynomics lied to you.

    GD Star Rating
  • opposition dude:

    The problem with the way too smart PAP back then is that they didn’t think too far ahead for the HDB issue. As is usual for PAP they only tell you what they want you to hear.

    They never bothered to mention that flats are on 99 year leases but preferred to lie and say Singaporeans own their flats even up until today. So the often repeated made up statistic of more than 80% of Singaporeans was always used repeatedly.

    And when Wong mentioned that flats are returned to the government after 99 years he basically admitted that we never did own our flats in a roundabout way. If we did own them then why do they have to be returned to the government in the first place?

    And furthermore, why are we not allowed to en bloc our flats since we “own” them? Doesn’t make sense right?

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  • pap lies, all the time:

    pap lies HDB is asset that can be enhanced. WTF. it is a lie that probably only going to hurt 70% sheep children.

    pap lies vote pap HDB value never goes down. WTF. what a lie. pap Lj officially says in public HDB value goes to zero at end of lease.

    pap lies S$1,000 pm can HDB. WTF. wonder how pap Ljs and pap CBs pass PSLE mathematics. if S$1,000 pm can HDB then where got anything left for pap CPF minimum sum scheme?

    pap lies HDB is 70% sheep owned. WTF. when it is nothing but over priced prepaid HDB rental where 70% sheep is just renting from pap HDB.

    pap lies since 70% sheep OWNs HDB rental unit, must pay property tax. WTF. when HDB rental unit is owned by HDB how come HDB is not paying property tax instead?

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  • Dr. Chan:

    PAP tell half truths or half lies to suit their political agenda.
    E.g. FT create jobs for locals bullshit (ya right – Grab/Uber, Security Guard jobs)?
    Per LKY and GCT. Value of HDB will keep going up, never come down bullshit. Minimum sum and delay withdraw of CPF is for your good bullshit – so that you don’t anyhow spent and have not enough for retirement. There are many many more bullshit. Only 70% idiot buy it. Will see what percentage of idiots there is going to be this coming GE.

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  • When sporeans think, sg sinks:

    Huh? They did not only say HDB flat was a good investment, right? What about this? Ex-MM says, “Your HDB home value will never drop”!

    VALUE WILL NEVERY DROP leh! Liddat not lie meh?

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  • 30year loan singkees:

    I wonder has the 70% woken up yet? Hope they made lots of loans.

    The more they suffer then only may they wake up. These stubbornly naive fockers are extremely hard to wake up.

    Maybe if they suffer 100 times more they will wake up.

    GD Star Rating
  • stephentan:

    Haha, voters should apply POFMA on the idiotic tan kin lian as his party.
    What a asshole he is!!!
    Talking talk as usual and and now behaving like a pap IB.

    GD Star Rating
  • disaster waiting to happen:

    pap lky clown in one national day rally speech mentioned someone in amk making a lot of money from HDB rental unit.

    but failing to mention such cannot happen with any other generation other that pioneer generation who paid S$30k+ for very large HDB 5 room rental units which today cost more than 15 times and in much smaller size too.

    a liar is a liar is a liar.

    GD Star Rating
  • Help our people:

    Need to boost the value of the old HDB flat…
    Too many depend on it for their retirements need as they have very little cash for their retirements.
    That why you see so many old people still working at such an old age…

    GD Star Rating

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