Commentary Will My HDB Flat Be Worth $0 When The Lease Expires, And Should We Change Things?

  • February 9, 2022
  • 10 min read
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Ryan J

Ryan is an old school print journalist gone digital. He's lived in almost every type of housing in Singapore, from flats to landed homes. Over the past 18 years, he's been a content developer for companies large and small, a co-founder in an education business, and sometimes a voice on the radio. He also spends too much time and money on painting little plastic soldiers.

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Paul
Paul

Hi Stacked team, thanks for the great articles and research.

How do these points affect private condos? I’m wondering about the investment potential of purchasing a middle-age leasehold property in D10. Let’s say, Draycott 8. It is a 26-year old lease, with low density (139 units in 150000sqft area), but for some reason the price has come down quite a bit since it was launched 15 years ago and I’m wondering if the price will continue to drop as the lease gets shorter. On the other hand, such large plots are not common in D10. Thoughts?

Gabriel Goh
Gabriel Goh

https://singapore2b.blogspot.com/2019/01/lease-decay-solutions.html

1) Allow HDB flats with less than 20 years of lease left, to be rented out by the owner without MOP or other conditions, even on short term rental (i.e. AirBnB)
2) This will raise the market value of the flats.
3) Owner-occupiers who do not want to rent, can sell to “entrepreneurs” who would rent out the flats (AirBnB) or to sub-tenants. Most of the lease decaying flats would be older flats with larger space and can be divided to rent to young tenants (undergrads, etc).

Stacked Homes
Stacked Homes

Interesting! But what about the supply side – if many people did this, there would be a large number of vacant flats, thereby depressing the rental value and also the selling price overall since the returns are lower.

Robert
Robert

Good article and good info. I am just pessimistic about having a painless solution. That’s why I will never buy an HDB flat even if I am eligible (I am not as a foreigner).

Cindy
Cindy

Robert, thank you for the detailed analysis. Would like to check your view of the old HDB flats around Beo Crescent Market? Any potential for SERS ? Thank you.

Cindy
Cindy

Thank you for the detailed analysis. Would like to check your view of the old HDB flats around Beo Crescent Market? Any potential for SERS ? Thank you.

Stacked Homes
Stacked Homes

Hi Cindy, it’s hard to say whether there’d be any potential for SERS there. Only a small fraction of HDBs undergo SERS. We’ll have to conduct a more detailed analysis on this, so this could be a topic for another time!

Sam
Sam

Hi Cindy, Beo Cres is an old estate with mainly low rise HDBs and it is sandwiched between taller HDBs at Havelock Road and Boon Tiong Road. Land here is quite under utilised especially with the open carpark at Havelock Food Centre. From an urban planning perspective, It makes sense to increase the plot ratio to match the neighbour’s high rise characteristics.

Sharon
Sharon

Enjoy reading the articles from Stacked – informative and insightful!
I happen to find out actually there are some HDB which are built earlier than their lease start dates (while looking at resale flats in central region).
– one example is 050032 refer to: https://www.roots.gov.sg/Collection-Landing/listing/1481749 for built year – the lease start is 1983 (refer HDB map services) however the built year is 1968.
– I am really curious if HDB will note to these interesting ‘restart lease’ blocks when considering SERS or maybe test the durability of the construction done in the early days (1960s).

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