Govt faced two conflicting problems with HDB lease decay

The govt faces two conflicting problems with the HDB lease decay. if they do not understand the contradiction, they cannot find a solution.

What is this contradiction?

The existing owners want to preserve the value of their HDB flats, especially if they have paid a high price for them. The younger citizens do not want to pay a high price for the HDB flat, when they know that it is no longer an investment and will have no value at the end of the lease.

How can the govt solve this contradiction? Should they keep the HDB prices high or allow it to drop?

My solution is out of the box!

The govt should adopt the following measures to allow the HDB flats to preserve its value for the remainder of the lease.

a) Allow the unrestricted use of CPF savings to pay for mortgages below 60 years.
b) Buy back old flats at a fair valuation, and not a depressed valuation due to weak demand
c) Allow expiring leases to be renewed for 10 to 30 years by paying a lease renewal premium.

What about the interest of the younger citizens?

I suggest the following:

a) Allow them to rent a HDB flat and to opt out of contributing to CPF from their salaries (but the employer should still contribute).
b) The rental should enjoy the same subsidy given to buyers (estimated to be 20% from market).
c) They can still buy new HDB or resale HDB flats using the govt grants.

These measures will also free up the HDB market and allow it to be used more efficiently. It might even encourage young people to get married earlier, i.e. as they have the option to rent a subsidized HDB flat, and improve the birth rate.

I hope that the above measures will help to find a solution to the HDB lease decay issue and generally improve the prospects for young citizens.

 

Tan Kin Lian

 

 

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16 Responses to “Govt faced two conflicting problems with HDB lease decay”

  • NotMyProblem:

    The one and only solution is kick the PAP out and the problem will be solved.

    If the PAP did not lied about the HDB value to leasee, there would not be any contradiction. If PAP were not greedy there would not be over-priced flats.
    If PAP did not has the open-leg-policy for foreigners, SG doesn’t need so many flats.

    When PAP imports more foreigners to increase SG population, PAP forgotten about housing, healthcare, foods, utilities, waste management, education, resulted in the citizen are paying for the problems PAP created.

    Voting out the PAP will solve all these problems, and our next generations will sure have a better life.

    Do the right thing in the next GE.

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  • Make good LKY promise:

    LKY had publicly and repeatedly said that HDB flat value can only go up. This is in the news and also in Parliament records. Not only LKY. Other ministers also said the same thing.

    PAP should and must make good their leaders’s promise to the people of Singapore.

    There is no other way, unless they resign totally from the Parliament.

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  • REGIME CHANGE is the solution:

    Straits Times: Singapore can learn much from German education system: President Halimah

    Singapore can also learn much from the German political system. It is good to have a significant opposition party in Parliament. It makes the public sector more open and transparent allowing real accountability.

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  • HDB flats depreciate to zero:

    “Buy back old flats at a fair valuation, and not a depressed valuation due to weak demand.”

    It appears TKL does not understand economics. HDB flats are basically depreciating assets due to the 99-year lease. Its fair value will go down steadily to zero (despite HIP1 and HIP2). This is a FACT. The value of old flats is “depressed” because of this fact.

    The underlying problems are that HDB flats are over-priced (price more than doubled over the last 15 years) and the use of CPF (retirement) savings to pay for them.

    The solution is REGIME CHANGE. PAP cannot solve this problem because hubris will not allow it to admit it made mistakes on this issue.

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  • The Other Hard Truths:

    Make good LKY promise:
    LKY had publicly and repeatedly said that HDB flat value can only go up. This is in the news and also in Parliament records. Not only LKY. Other ministers also said the same thing.

    PAP should and must make good their leaders’s promise to the people of Singapore.

    There is no other way, unless they resign totally from the Parliament.

    MND should issue a POFMA demand: that it had issued a fake news and falsehood, and also a corrective statement. Otherwise fine itself $1M, to be deposited into the accounts of the CPF of the poorest 10% of the population

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  • Need to resolved:

    Need to resolve this contradiction.
    Government should buy back the old flats at a reasonable price for redevelopment…help the old retirees to have some cash to survive.
    Reduced the selling price of new flats…for the younger generation sake.

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  • Dishonorable will cheat:

    Who wants to pay you high price to let you profit if your flat is left 20-30 yeara lease and will continue to depreciate to zero?

    Seems like no need wait till 99 years to enjoy the effect of ASSET APPRECIATION SCHEME?

    So which of you will be the biggest SUCKER WHEN THE MUSIC STOPS?

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  • Dr. Chan:

    @Make good LKY promise
    I second that. Also, to add – make good on GCT promise – Swiss Living Standards? He is still alive. He can be held accountable to the promise, no?

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  • SureDie:

    It is a capitalist system. They breed selfish and self centered people from all stratas of society hence the masses will have to pay dearly to keep their masters selfishly happy with their immoral rationality passed off as wisdom.
    It, the city, flourishes like a flower to impress and dazzle but will shrivel, weaken and dies in the end. You can’t save it.

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  • Ah Gong didn't Lie:

    Isn’t it Mr. Tan a fact that Sinchiapor Incorporated’s Sovereign Wealth Funds are fuelled by the people’s cpf savings? Their hdb ploy has for decades been designed to suck away as much as possible from “si gui kia” blood sweat and tears. The old guard had warned ah gong against meddling with the people’s retirement hopes.

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  • FOSG proposal:

    I think that the best proposal on housing policy reform is from the FOSG (Future of Singapore Group).
    The nonpartisan report authored by Ku Swee Yong, Tay Kheng Soon and Yeoh Lam Keong deserves serious consideration.

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  • oxygen:

    @ HDB flats depreciates to zero

    BEAUTIFULLY SAID – ASSET BUBBLES IS NOT and never is wealth creation, IT IS WEALTH DESTRUCTION,trapping a lot of GOONDUS!!

    HDB flats depreciate to zero: It appears TKL does not understand economics. HDB flats are basically depreciating assets due to the 99-year lease. Its fair value will go down steadily to zero (despite HIP1 and HIP2). This is a FACT. The value of old flats is “depressed” because of this fact.

    The underlying problems are that HDB flats are over-priced (price more than doubled over the last 15 years) and the use of CPF (retirement) savings to pay for them.

    The solution is REGIME CHANGE. PAP cannot solve this problem because hubris will not allow it to admit it made mistakes on this issue.

    YET ANOTHER BRILLIANT COMMENT – right on the dot in this thread.

    NotMyProblem: The one and only solution is kick the PAP out and the problem will be solved.

    If the PAP did not lied about the HDB value to leasee, there would not be any contradiction. If PAP were not greedy there would not be over-priced flats.
    If PAP did not has the open-leg-policy for foreigners, SG doesn’t need so many flats.

    When PAP imports more foreigners to increase SG population, PAP forgotten about housing, healthcare, foods, utilities, waste management, education, resulted in the citizen are paying for the problems PAP created.

    Voting out the PAP will solve all these problems, and our next generations will sure have a better life.

    Do the right thing in the next GE.

    GD Star Rating
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  • TruBlu:

    So is ASSET ENHANCENENT a sort if FAKE NEWS?
    Is it respinsible for any minister to claim publicly that HDB flats always increase in VALUE for the *owners*???

    Or,owners actually mean GOVT?

    Greed of govt will destroy society as it propagates NEGATIVE VALUES throughout.

    Greedy govt must be replaced or the PEOPLE will suffer even more.

    GD Star Rating
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  • believe pap lky die fast fast:

    Make good LKY promise:
    LKY had publicly and repeatedly said that HDB flat value can only go up. This is in the news and also in Parliament records. Not only LKY. Other ministers also said the same thing.

    PAP should and must make good their leaders’s promise to the people of Singapore.

    There is no other way, unless they resign totally from the Parliament.

    it is an established fact pap lky is a liar through and through. whenever caught, changes rule to own advantage.

    when esteemed Mr JB Jeyaretnam told the world about then cj beholden to pap liar lky, everyone honest knew it is true, but in an Asian court, when beholden and beholding agree not to admit to anything, the truth stays under wraps.

    that is why we have never voted pap. because it is a clan of S$m ownself pay ownself lying thieves.

    GD Star Rating
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  • Harder Truths:

    There is no answer for a crash where the renter cannot pay. The rental prices are inflated artificially so that government, banks and developers get the renter’s income with nothing given back except a temporary place to stay in. This is how the system works.

    When the property bubble bursts – as it will – there will be many citizens with large loans, no jobs and no means to pay back the banks. Jobs are taken by the FT so what are citizens to do? Is the government going to kick them out of the rentals?

    I see many dark days ahead. There is always a breaking point. The most dangerous person is someone with nothing to lose.

    GD Star Rating
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  • Art of Hard Truths:

    Harder Truths:
    There is no answer for a crash where the renter cannot pay. The rental prices are inflated artificially so that government, banks and developers get the renter’s income with nothing given back except a temporary place to stay in. This is how the system works.

    When the property bubble bursts – as it will – there will be many citizens with large loans, no jobs and no means to pay back the banks. Jobs are taken by the FT so what are citizens to do? Is the government going to kick them out of the rentals?

    I see many dark days ahead. There is always a breaking point. The most dangerous person is someone with nothing to lose.

    Just two days ago, saw old couple with boxes of house items under a bus shelter @ Kovan. Seems they got no where to go. Concern about it. Can anyone or MP throw some light into it?

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