Readers may think why is there a NEED to upgrade to a condo?
Well... 3 letters spell the problem... HDB.
Not too long ago... our first Prime Minister said this...
The pride people have in their homes prevents our estates from turning into slums, which is the fate for public housing in other countries
If Singapore prospers, their flat values will appreciate and they will share in the growth. Home ownership motivates Singaporeans to work hard and upgrade to better flats for a better quality of living. The HDB story reflects the social mobility in Singapore.
--Lee Kuan Yew
Some were forced to sell their flats at a much lower price especially after National Development Minister Lawrence Wong came out last year saying that not all old HDB flats would be eligible for Sers redevelopment. Those not selected would be returned to the state when their 99-year lease expired, he said.
--https://www.theonlinecitizen.com/2018/04/15/owner-sells-3-room-hdb-for-15-less-after-wongs-comment-about-zero-value-of-expired-flats/
Not too long ago, only 7 years back, it was implicitly assumed that HDB prices would always be rising.
The promise made by his predecessor, Mah Bow Tan, about "HDB flats grow in value over time" has vanished overnight. Mah, then the National Development Minister told everyone just before GE 2011, "We're proud of the asset enhancement policy. (It) has given almost all Singaporeans a home of their own... that grows in value over time."
--https://www.theonlinecitizen.com/2018/04/15/owner-sells-3-room-hdb-for-15-less-after-wongs-comment-about-zero-value-of-expired-flats/
Now... we all aren't fools. We all know that HDBs are 99 year lease.
But there's always been some implicit form of expectation that the Government would SERS the aging HDBs and provide a way out for the older flats.
And well... looks like this isn't the case anymore.
So how do we play the game now?
Well... A couple of ways...
A simple way is probably to get a freehold property, which is why I mentioned a NEED to upgrade to a condo. Doing so, more or less settles this problem probably for generations unless the Government needs the land back for whatever reason.
This is also assuming you believe that Singapore will remain prosperous in the next few generations of leaders.
Another way is to continue to move house every 5-10 years. Which is probably a hassle and there's always transaction costs in buying a property, selling a property and doing renovation. So that's just inconvenient, but it IS potentially a solution.
Or maybe look to migrate to a nice quiet place like Australia or New Zealand?
You see... I absolutely don't find this funny, it's quite a let down by the Government, cos many seniors have the expectation that the Government WILL take care of them. And this is simply being played out. Which isn't unexpected if you really think about it.
Everyone knows that HDB owners are buying a 99 year lease for a pigeon hole right?
No one can say they thought they were buying a freehold property.
Singapore is only 52 years old. Which means that 50 years from now, the whole load of first HDBs will all expire. That's quite a lot of them, and it will continue to happen in the years after that cos as Singapore ramped up building HDBs in the past, well... that's the same number of expiring leases that will happen in 50+ years time...
Who's going to suffer? Probably our children I suppose.
And in between, the market will start to adjust for it and a lot of people will lose money.
The wave of expiring leases hasn't really come yet. But it will... when a load of HDBs are left with 20-30 year leases, and the market starts to realize that "Hey... this is real..." what do you think will happen to the market?
Cos now, most HDBs still have 50 year leases, that's still long enough for people to forget about it and worry about it in the future...
So anyway... what more can we do about it? Nothing much right? Just part of the game.
Need to adjust and continue playing according to the parameters.
So... time to think about upgrading!!!
It's now a NEED, no longer a frivolous want right?
If you want to retain long term value in your property, a freehold property is probably the best way in the long run.
<<PREVIOUS POST // NEXT POST>>
Did you like this post? If so, could you "blanjah" me 1/4 cup of my morning coffee pls.
You may also consider subscribing to receive the articles in your email, link in the column on the right.