Business & Economy Property 'Older HDB flats still have values', Minister assures homeowners

‘Older HDB flats still have values’, Minister assures homeowners

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Minister for National Development today assured homeowners that “there is still value in older HDB flats – value which can be unlocked for retirement.” Minister Lawrence Wong’s assurance comes amidst public concerns that the older HDB flats are a ‘ticking time bomb’ which will rapidly lose its value once the leases pass the 60-year-mark.

Mr Wong said there is no need for homeowners of older HDB flats to be “overly anxious” about the value of their flats in the resale market. He noted that this is a reversal of the previous trend where home-buyers  speculated in older HDB flats hoping to benefit from the Selective En Bloc Scheme (SERS) exercise.

In addressing the public’s concerns in parliament, the Minister said that homeowners of older HDB flats have managed to buy smaller flats from sales proceeds. They have also benefited from schemes such as the Lease Buyback Scheme. He reminded that owners of such flats can also rent out their entire apartments or rooms in their apartments to monetise the value locked in their older HDB flats.

“So the monetisation schemes are working; we will continue to review and enhance the schemes, and help our elderly unlock the value of their flats for retirement,” he assured.

Some homeowners have expressed frustration in recent times at the drastic price drop of older HDB flats. They claimed that the falling value of their flats has affected their ability to downgrade and live on the profits from selling their apartments. Whatever the price, the sales proceeds would be “more than sufficient” to purchase a smaller flat, he assured.

In citing specific examples of some homeowners who managed to monetise their older HDB flats and move out to smaller apartments, Mr Wong said that besides the age of the flat, other factors also significantly affect the values of the flats. Factors like location, storey height, and the condition of the flat are other components which affect the resale price of older HDB flats, Mr Wong said.

Quoting transaction data over the past year, Mr Wong added that an older 4-room flat with less than 60 years remaining on its 99-year lease would sell for around $300,000 and a 5-room would sell for around $400,000 in non-mature estates. The price for similar sized flats in  more popular locations would be significantly higher, he noted.

older HDB flats
Infographic: Bruce Wee

The Government implemented market pricing and the asset enhancement policy for public housing in the late 1980s. The aim of this programme was to allow heartlanders a chance at enjoying the appreciation of their HDB flat – which is a key asset for most of them. The programme led to more than 10 fold increase in the price of HDB flats in the next 30 years.

In 2011, Singapore’s first Prime Minister Lee Kuan Yew urged Singaporeans to not sell their HDB flats as the price will go up in time. At a community party for residents of Buona Vista Court, the late Mr Lee said: ‘Your flat is your most precious property,’ he said. He added: “the Government can help to raise the value of flats, but Singaporeans must also look after their property and surroundings.”

Mr Wong, however, dropped a bombshell on the hopes of flat owners who had hoped that the price of their homes will keep on increasing. Writing for his Ministry’s blog in March last year, Mr Wong asked HDB flat owners to not assume that all old HDB flats will become eligible for SERS. 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”.

There are several government policy restrictions which suppresses the attractiveness of older HDB flats for buyers.

These are some restrictions:

  • From 1 July 2013, CPF (Central Provident Fund) usage and HDB loan was restricted for purchase of flats with remaining lease of less than 60 years.
  • For flats that are 64 years old, banks are unwilling to extend loans to finance the purchase of these flats.
  • For flats which are 69 years old (or less than 30 years of lease remaining), CPF money cannot be used for down payment or to service the monthly mortgage.
  • From the 79th year onwards, the property has to be paid for in cash.

Disillusioned by the rapidly falling prices of older HDB flats, some homeowners have taken to lobbying the Government for lease top-up for their aging HDB flats.

Mr Wong said that if the Government accedes to such requests, it will involve serious trade-offs and ramifications. He reminded that Singapore is “still severely constrained by space” and that if there is no more land to recycle for future public housing, the future generations will suffer.

In such a scenario, “what will happen to our children and grandchildren? How will they have access to subsidised housing in the future?” Mr Wong asked. He reminded that the maintenance needed for older flats is another issue which will be costly for homeowners. “How to do it well, and who will pay?” he asked, adding that the matter is “not so straightforward”.

Calling it a complex matter in which the Government must do the “responsible thing”, Mr Wong said: “It will be easy for me to give you a politically expedient answer now and try to wave away the problem. But there are serious trade-offs and ramifications to consider.”

From 2009 to 2013, resale prices of HDB flats reached record highs in several consecutive quarters. It is unclear how homeowners who bought older HDB flats during this cycle would not lose money and monetise it by selling it, especially since they would have to refund CPF monies utilised for the flats with interests.

If you are home-hunting, our Panel of Property agents and the mortgage consultants at can help you with affordability assessment and a promotional home loan. Just email our chief mortgage consultant, Paul Ho, with your name, email and phone number at for a free assessment.

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