What it really means when you "BUY" your HDB

Good morning everyone. Yesterdays post was quite fun, cos I saw a surge of readers which pretty much proved what I posted about...

Anyway, I think this post isn't that much a clickbait, but more people seem to like posts about property so I tend to get better readership when I talk about HDB.

So what does it REALLY mean when Singaporeans "BUY" their HDB...

Everyone is really fooling each other right?
We always say Singaporeans don't rent their homes like overseas where rental is common. 
Singaporean home OWNERSHIP is 90%...
A whole load of BS right?

99 year rental is pretty similar to 2 year rental...
The difference is 97 years. 
Or just a difference in perception. Just cos we can do pretty much whatever we want to the HDB, BUT yet, we need to restore it to original condition when we sell it... does it sound very "OWNER" to you?

Wait til your HDB is left with 2 years lease and see what your feelings are to it. 
Whether you think there's a difference between HDB "ownership"  vs rental. 

So what are we buying? What are we paying for? 
Woah banks even give loans for us to rent HDBs for 99 years. 

Imagine... You go to a bank, you tell them, "HEY I got this great deal on RENT! This organization allows me to rent 99 years at a good rate but I have to bulk purchase it. How about you lend me some money for 30 years so that I can PREPAY the RENT."

Basically, what most of us see as "buy", is a BULK purchase of rental. 
That's what it is. 
We sign a contract for long term rental at a cheaper rate cos we "buy" the rent in bulk. 
Instead of signing multiple 2 year rental contracts, HDB allows Singaporeans to sign a whopping 99 year rental contract. 
And further allows Singaporeans to sell the remaining part of this rental contract to other people willing to pay for it. 
And year after year, more often than not, people are paying more and more for the RIGHT to STAY at whichever particular unit when buying and selling to each other. 

And that's what it is... pretty much a LIE. 
No one owns their HDB, you are renting. The difference between a Singaporean "owning" their HDB, vs the foreigner who comes here to work and rents the HDB... 
Well, the difference is pretty much someone is renting for 99 years, vs someone who is renting for 2 years. 

If any bank or HDB gives a 99 year loan for a 99  year HDB... 
Then the monthly "mortgage" is pretty much equal to the rent you pay. 
Cos there's really no "home equity" at the end of 99 years. 

All this talk about home equity... is just PREPAID RENT!!!

And it's really interesting here... cos WHY? 
WHY did we all get fooled into this fluff of clouds?
I think a lot was due to the Government and how they "sold" the idea of HDB to the people. ​

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.

If all the HDB flats built over the past 50 years were rental flats, Singapore would be a very different society today.  We would not have the stability, progress and prosperity that the stake in home ownership of a growing asset has made possible.

--Lee Kuan Yew

It's some very very good marketing. 
The Government really sold this idea and branded the idea well to the citizens of Singapore. 
All HDB flats built over the past 50 years WERE rental flats!!!
It's just a very long rental contract and the remaining part of the lease is tradeable. 

HDB is PUBLIC HOUSING. This is typically subsidized RENTAL from the Government.

​Now, I'm not saying this is all a bad thing. 
I think it has helped Singapore and the people to grow with the country. It has provided housing for millions of Singaporeans. So it's a good thing. 

I'm just providing another way to look at things. Or maybe this was staring at us in the face but we just didn't want to recognize it. 
For me, I don't think of things in good or bad. It is what it is. The world will still go on turning. HDB will continue to work like it's always been and people will continue to think that they "own" their HDBs. 

For me, I just like to be aware of the reality behind all this. To take away all the fluff. So that I can see and think clearly when I make decisions or have a more neutral/correct view when I look at things. 

And I hope today's post has been more enlightening and more fun than yesterday's post.

Have a good day!
I'm going to collect some free vegetables.


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