Government policies severely suppress value of aging HDB flats even before 99 years are up


The Housing Development Board’s Asset Enhancement Scheme remains a hot topic in Singapore, with HDB CEO Dr Cheong Koon Hean adding fuel to the fire last week when she indicated that the value of aging HDB flats will decline over time.

Dr Cheong’s remarks mirrored the views of National Development Minister Lawrence Wong, who confirmed last year that the vast majority of flats will be returned to HDB, without any compensation for homeowners, when the 99-year-lease runs out.

Writing for his Ministry’s blog in March last year, the Minister asked HDB flat owners to not assume that all old HDB flats will become eligible for SERS (Selective En bloc Redevelopment Scheme). He said that “only 4% of HDB flats have been identified for SERS since it was launched in 1995”, and that “it is only offered to HDB blocks located in sites with high redevelopment potential”.

The Minister advised home buyers: “As the leases run down, especially towards the tail-end, the flat prices will come down correspondingly. So buyers need to do their due diligence and be realistic when buying flats with short leases.”

Dr Cheong parroted this when she advised the audience at a forum last week to pay a price for resale flats that is commensurate with the balance lease: “You should buy a flat, as you say it commensurate with the lease. The price you pay should commensurate with the lease. As you should buy a flat that would last you a lifetime.”

The planner’s comments are contrary to the government’s past promises that HDB flats are “nest-eggs” that grow in value over time. Just before the General Election in 2011, then-National Development Minister Mah Bow Tan told Singaporeans: “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.”

The nation’s late founding prime minister Lee Kuan Yew also promised that public housing is an “asset” that “will grow in price as the country develops” over time. The elder statesman’s remarks on the matter were made as recently as 2010: “We give our buyer an asset which is below market price the moment he buys it. So there is no profit, it’s a loss, but there’s a strategy behind that loss. That loss is to give the man an asset which he will value, which will grow in price as the country develops, as his surroundings become better. This is a social responsibility which we have undertaken and that’s the reason why we are re-elected.”

Besides this, Lee had famously proclaimed: “No country in the world has given its citizens an asset as valuable as what we’ve given every family here. And if you say that policy is at fault, you must be daft.”

The views of the current National Development Minister and the HDB CEO have been a jarring reality check to countless homeowners who had mistakenly believed that the value of their flats will keep rising over time – even property agents are not immune to being hoodwinked by the asset enhancement promise.

In actual fact, the value of aging flats are severely suppressed by government policies well before the 99-year lease is up. Policies that restrict the attractiveness of older flats for buyers include:

  1. The Central Provident Fund (CPF) usage and HDB loan restriction for the purchase of flats with less than 60 years left on lease. This policy went into effect four years ago, on 1 July 2013;
  2. The unwillingness of banks to extend loans to finance the purchase of flats that are 64 years old;
  3. The prohibition on CPF usage for paying the down-payment or servicing the monthly mortgage for flats which are 69 years old or flats with less than 30 years left on lease; and
  4. The policy demanding that properties that are 79 years old and above must be paid for in cash.

These policies limit the amount of options left for the people to monetise the “asset” of public housing. This realisation has prompted several disgruntled Singaporeans to liken the Asset Enhancement Scheme to a “ticking time bomb,” “political big bazooka,” and a “scam”.

One can only imagine whether Lee Kuan Yew would have called these Singaporeans “daft” if he were still around.



  1. “No matter how noble the objectives of a government, if it blurs decency and kindness, cheapens human life and breeds ill will and suspicion – it is an evil government”. – Eric Hoffer,
    The Passionate State of Mind 1954

  2. Maybe the word give is misunderstood. It’s all paid for in extravagance which people pays for. In the end it doesn’t matter. We are ashes and dust

  3. All assets depreciate in value to zero at the end of its life span , 70 % blind and oblivious still believe in assets enhancement in the words of lky/gct

  4. When our citizens apply for HDB flat is not successful. Must be something wrong with the HDB. Don’t you tell people not enough HDB flats to supply our citizens.

  5. So my fellow Singaporeans who have been lying to us all these years. To the 70% who voted for this lying government, you have it coming. Continue to make the same mistake comes GE 2020, will be pure stupidity and suicidal.

    • Yes and according to him, only those with high potential for redevelopment

      But in land scarce Singapore, almost everywhere will have a high potential for redevelopment right?

      Don’t tell me they will tear down and return it to vacant land after the lease?

  6. Cum future Erections, these Scums will hold Ransom on the 70%….. The only way to assure that the flats on leasehold will not be zero is to continue to Volt them in….. else will regret & repent and have the “assets” going up in smokes if the G is not under AhLeeBaaBaa & it’s Faulty Thieves.

  7. Which Ministers are staying in HDB flat? NONE. So they don’t care about Singaporean die or live. Because they are living in FREEHOLD PROPERTY. Come GE2020 and let AT LEAST 1/3 of WP into parliament to OBJECT THE POLICY.

  8. Let us never forget that government is ourselves and not an alien power over us. The ultimate rulers of our democracy are not a President and senators and congressmen and government officials, but the voters of this country.

    Franklin D. Roosevelt

  9. HDB is public housing not private housing. LKY is correct about Singaporean being daft. You do not own the property. Don’t understand why people pay enormously huge amount for the property that will be returned to the government. CPF finished property gone.

    • Mark Loh You have a choice. Why pay six seven hundred thousand or a million dollars from your hard earned money for a public housing. Doesn’t make sense. Public housing should be made affordable.

    • Hi Janet / Ashaari in general most Singaporean has to buy HDB flats, apart from the vote during election you mention is different story. You tell me, is the current Opposition Ready? You ask yourself did they do what they suppose to do or can they do it in other way to make known or change the doing of current ruling party? The answer is still No, they can’t. I don’t about both of you back ground, but in Sg we have limited land and resources for residential and not all people afford a free hold property that give us a limited choice (Or none) to choose at.
      Yes, I agreed that all public housing should make affordable for all Low or Middle income group, but still not all can afford it even though if it is low or affordable. They are still people that is left behind and those are the people (10% to 20%) that is suffering from the system evolution. Like what you said, why pay 600-700 thousand for a flat? Then I ask, what can’t you just buy a 3rm for 200k to 300k and stay far from your idea location. This is not happening in Sg only. We need to look and compare does we really need to buy it?
      Let me tell you something, it will be the same for the next 10 to 20 years. So why not just prepare yourself or leave Sg if you think here is not good enough.

  10. Imagine one bought a HDB flat by financing it with all his cpf, so when the lease of 99 years expires,what will happen?It can be very horrifying because the value of your flat will become ZERO and your hard earned cpf is gone.So cpf board dont need to return u money.But that is still not the end of the story,because you still owe cpf board accrued interest.Now I cannot sleep everyday.

    • How does the accrued interest work? Isn’t it money that we could have been earning as interest that we had foregone and why do we need to pay CPF board for our own accrued interest we chose to forgo for buying a flat? My understanding is that the accrued interest is monies that you need to take away to out back to your balance when you net a profit. Goes back to your own accounts? Correct me if I am wrong please. This is one area that is not clear how that works

    • While u pay interest for the property loan. The amount that you take from your CPF is also subjected to accrued interest when u sell ur property. So end of day CPF which belongs to you is costing you interest and if you dun meet the minimum sum. Good luck can go exercise and collect cardboards when you r old…

  11. The problem will not happen later, it’s happening now! With such a honest comment from Minister Lawrence Wong, all resale flats are plunging in prices!

  12. Willing buyer, lease of years are made known..

    Don’t touch it n expect change for personal interest…it will be an asset for future generations..

    The Government of the day will then decide how much to sell to new applicants..Government cost will then be just upgrading, no more building from zero!

    House ownership must be affordable base on CPF saving…

    Nation assets will pass on generation to generations..

  13. It is not wise to park all your cpf money in your HDB flat . Unfortunately, most Singaporean have no better option but to finance their flat either partial cash or full cpf.I believe that there are some who can afford to finance their HDB flat solely with cash, but i think not many can.If you withdraw $300000 from your cpf account to buy a 29 year old hdb flat,by the time it reaches 99 years old,the accrued interest you owe cpf board will be $300000 x 2.5% x 60 yrs (99-29) = $450000.Under this scenario,anyone can be easily made a bankrupt after your hdb flat reached 99 years.How to return the $450000 accrued interest plus tge $300000 _that you have withdrawn to cpf board?? Where is your cpf money by them??

    • There is no need to return unless you sell the flat leh. So meaning just hold until you die. After that whatever price your children sell at, the money will go to them.

  14. At least can sell old flats at good price and live very comfortably in neighbouring countries in 5C style… Many Singaporeans are unaware how lucky they are compared to all of Asia.




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