Home News Many question arise with Minister Wong's assertion that HDB flats are “good...

Many question arise with Minister Wong’s assertion that HDB flats are “good store of asset value”




- Advertisement -

By: Leong Sze Hian

HDB a ‘good store of asset value’ for those who plan ahead 

I refer to the article “National Development Minister says HDB is “good store of value” – no mention of “asset enhancement”“.

The National Development Minister, Lawrence Wong, said in his post that “a 65-year-old elderly couple living in a 4-room flat with 55 years of lease remaining in Woodlands can sell their flat and right-size to a nearby 2-room Flexi flat with a 30-year lease. They can enjoy a Silver Housing Bonus of $20,000 in cash.” But according to HDB’s web site – those who have received a housing grant have to pay a resale levy of up to $55,000.

- Advertisement -

Moreover, according to Property Asia Direct, “you need to return the grants back into your CPF account when you sell the HDB flat, PLUS ACCRUED INTEREST over the duration of your occupation in the flat. This is on top of ALL the CPF monies used for your flat purchase (PLUS accrued interest). Hence, even if your HDB flat has appreciated in value, don’t be surprised when you are left with little or no cash proceeds when you sell your flat”.

Lease Buyback? 

Mr Wong also said in his Facebook post that those who “prefer to stay in the same flat…can apply for the Lease Buyback Scheme or LBS. This means they continue living in the flat for 30 years and sell the remaining 25 years back to HDB.” I had pointed out in my article  “HDB Lease Buyback: $1.7m gain or loss?” how LBS is unlike typical reverse mortgage in other developed countries, where the homeowner would borrow against the equity of his home, and receive the net proceeds of the market value less the loan plus accrued interest, on his demise or sale of the home.

As to the Minister’s comments that HDB owners “also have the option to rent out a room”, surely the need to give up in a sense the privacy of one’s home in order to “monetise” may be kind of like stating the obvious.

“Typical” or so few?

The Minister said that the examples he provided “are typical of many HDB households.” But how can this be when the number who have signed on to the HDB Lease Buyback Scheme is so little?

“Since the launch of the scheme in 2009, 471 households signed up in the first four years – averaging at about 117 annually. A further 494 took up the scheme following modifications in February 2013 over a period of about two years, an average of slightly less than 250 a year” -‘Annual take-up of HDB’s Lease Buyback Scheme more than doubles‘ (Channel NewsAsia, May 15, 2016)

Similarly, how many have downgraded to a two-room flexi flat?

“Plan ahead and make prudent housing decisions”?

So in summary, we have to question if the HDB flat is indeed a “good store of asset value” when one has to downgrade to a tiny 2-room flat (assuming one is able to pay the resale levy), or give up the future equity and value of one’s flat in exchange for a lease of say 30 years and some money into the own CPF.

Send in your scoop to news@theindependent.sg 

- Advertisement -

JTC issues stop-work order on contractor that ‘erroneously’ cleared Kranji woodlands

Singapore – The contractor that “erroneously” cleared a forested area at Kranji has announced it has been issued a stop-work order by JTC and is assisting the developer with investigations on the issue. On Feb 16, state-owned industrial property developer JTC responded...

Clementi, Dover, Kranji: Singapore’s grand conservation plan is to plant trees and destroy forests

Yes, we love to plant trees. Since Lee Kuan Yew started the whole ritual, at least 10,000 saplings are planted every year since 1963 as part of the Tree Planting campaign. Impressive indeed. Singapore Clean and Green. At the same time,...

Ex-UOB vice-president charged with mishandling over S$5.4 million

Singapore—Sixty-five-year-old Ling Shek Lun, who used to be a  vice-president at UOB, has been charged with mishandling millions of dollars, reported straitstimes.com (ST) on Friday (Feb 19). Ling, a Singaporean who was charged in district court on Feb 10, faces two charges...

Send in your scoop to news@theindependent.sg