In a commentary on the contention over whether HDB flat buyers are homeowners or lessees, Straits Times Opinion Editor Chua Mui Hoong asserted that the fierce debate “is just an intellectual storm in a teacup. It’s not either-or. It’s both. And that gives HDB flat buyers the best of both worlds.”
The prominent journalist’s commentary comes amid public uncertainties over whether HDB flat buyers are homeowners, lessees, or tenants/renters, given the fact that HDB flats are bought on a 99-year-lease from the Government.
The latest uproar on this issue was sparked by International Property Advisor chief executive Ku Swee Yong who advised last month “that we be honest with ourselves and recognise that we are merely lessees who rent the HDB flats for their terms”.
The real estate expert’s advice added to the already burgeoning public backlash over the deprecating values of the HDB flats that grew after Minister for National Development Lawrence Wong told Singaporeans that not all ageing flats will be chosen for the Selective En Bloc Redevelopment Scheme (SERS).
Wong’s explanation that “as the leases run down, especially towards the tail-end, the flat prices will come down correspondingly,” sparked an outcry among Singaporeans who began to realise that their flat’s resale value will likely plummet in spite of the Government’s decades-long asset appreciation promises.
In response to the ongoing backlash, Prime Minister Lee Hsien Loong announced the Voluntary Early Redevelopment Scheme (Vers) and enhanced Home Improvement Programme (HIP II), intended to give homeowners peace of mind although details remain unclear.
Under the Vers scheme, which will only come into effect in 20 years, homeowners can choose to sell the remaining lease back to the government when their flats are 70-years old, through collective sale similar to the SERS programme.
While some have speculated that these new schemes are being introduced now because the next general election is believed to be close, ST’s Chua feels that the new programmes are reflective of the “special relationship [that] exists between HDB flat buyers and the Government. That relationship is based on a promise and trust.”
Chua further said that the early announcement of Vers and HIP II is an example of how the Government “takes that bond of trust which HDB flat owners place on it very seriously…This was necessary to soothe concerns and to assure flat buyers their home values will be protected.”
It is curious that Chua is painting the early announcement of Vers as an example of the Government’s commitment to the people when she, herself, was full of questions when PM Lee first introduced the programme during his National Day Rally Speech last month.
Chua had asked several pertinent questions then: “How much will residents get for their old flats? How much will they have to pay for their new flats? Can families cash out on the remaining lease and bequeath the right to new flats to their adult children? What is the threshold agreement required for a precinct to be Vers-ed?”
Details on Vers remain scant, although the Government cautioned that compensation will be less generous than SERS under the new Vers programme since there is less financial upside to the Government buying back the lease on aged flats, according to PM Lee.
Mr Alex Yam, who chairs the National Development government parliamentary committee, also cautioned homeowners to temper their expectations: “There are, I think, going to be a lot more conditions tied in with Vers… We didn’t go through so many cooling measures to try to dampen the private en bloc market so Vers can take over.”
For now, though, ST’s Chua says, “if I were an HDB flat dweller, I would not be too concerned about whether I own or lease the flat, so long as the HDB as lessor is prepared to continue taking care of these upgrading works as my flat ages, and offer them at highly subsidised prices.”
Calling HDB a “super-landlord” and praising the Government for spending billions on maintaining HDB properties and enhancing its value, Chua asserted: “This dual identity of HDB flats and the assurance that the government will take care of HDB flat buyers, is one reason why I hope to retire in an HDB flat. Because HDB flat dwellers clearly can have their cake and eat it too.”