Why I Might Still Pay $1 Million For A 50-Year-Old HDB—Even If Everyone Says It’s A Bad Buy

When I explained that I would seriously consider buying a 50+ year old flat for $1 million, my friends in the property industry nodded sadly and said, “Ah yes, because you’ve taken leave of your senses.” One of my uncles was kind enough to point out that when that flat was built, some people still believed there were vitamins in cigarettes, and that still sounded more reasonable than my idea. 

All because there’s a culturally embedded assumption that everyone must want a property that will last forever, that the children will inherit, and that provides resale gains when it’s sold. But maybe, it’s time to look at it from another perspective; one that will make it more understandable why we have an increasing number of million-dollar flats:

1. Why would I pay for 99 years when my doctor gives me 40?

At some point, my body is going to shut down, and it likely won’t be another 90+ years. So in that sense, buying a longer lease is kind of like booking a hotel for a year, when I’m only intending to visit for a week. 

If I just pay an amount closer to what I actually need, I get other useful tradeoffs. In this case, the tradeoffs are all listed below: such as a more spacious flat, better nearby amenities, or maybe even living close* to children and grandchildren. These are tangible and real benefits, not the abstraction of knowing I have a really long lease.

Now, some people may make the argument that, later in life, I may want to move; and if I do so, a flat with a longer remaining lease will be more helpful in funding that move. I fully admit the possibility of this. If I were still in my 20s, I would never get such an old flat because life is long, and I don’t know where it will take me. 

But at the age of 40+, I know myself much better and can more accurately predict my future needs; something that I’m sure is true of our older readers too. So I can tell you I don’t even have the energy to walk to the bathroom right now, let alone find the strength to move to a whole other neighbourhood when I’m past 50. As such, I’m choosing to discount that possibility (wanting to move that late in life) as being far too slim. 

*Or being able to live FAR from them, depending on the status of your relationship.

2. But still, why would I pay a million dollars? 

Uh, because that’s how much it costs to convince the guy who owns it to move out? Next question.

But seriously, the rationale for overpaying (and I assure you it will be over-valuation at $1 million at that age) is because the financial element is no longer in the picture. This is a property where I’m intending to stay for the rest of my life. If all goes to plan, the next time this flat will go on the resale market is when my ghost is haunting the bomb shelter. 

Given that it’s now 100 per cent about homeowner indulgence and comfort, there isn’t any more concern about paying overvaluation, or how this affects potential resale gains. There is no upgrade after this; this is the final stop on the property journey.

So long as I can fund my retirement to a comfortable degree, after buying the flat, I’m okay with the higher price tag. Particularly if there’s no other venue that gives me the same space and convenience for, once again, the spot I’m planning to live the rest of my life in.

This isn’t unique to HDB flats by the way; there are people who pay what is technically “too much” for older leasehold condos as well, because it’s simply where they want to be for the rest of their time. 

The only difference between the HDB and condo version of this approach is that, for $1 million, I won’t be stuffed into a two-bedder resale condo with higher maintenance fees, and storage space for maybe one siew-mai. 

3. A 99-year lease is immaterial if no one is going to be inheriting this flat, and that’s almost certainly the case for most Singaporeans

No one can own two HDB flats. If you have a private property when you inherit a flat, you need to either (1) live in the flat and rent out the private property, or (2) sell one of them*.

Couple that with the fact that Singapore has, for quite some time, maintained home ownership rates of close to 90 per cent. The simple fact is that, by the time I or you reach 50 or 60 years of age, any children we have will probably already own a home, or are on their way to it. 

If they receive my flat at that point, it just leaves them with the added hurdle of having to sell it off. And given that the flat’s lease may be in its last 10 to 20 years at that point, they can maybe buy two pork buns and an ice Milo with the sale proceeds. 

(You think I’m joking, but you wait and see where all these $40+ million coffee shops will send food prices over the next few decades.)

Anyhow, my point is this: housing inheritance is something Singaporeans are way too obsessed about, given our high home ownership rates and mass public housing availability. 

*Barring special appeals and extenuating circumstances. 

4. If this is my final home, it is supposed to be the ultimate in size and amenities that I can afford

I’ve worked hard all my life except on long weekends and during NS. So at the end point, if I can’t get a penthouse or a Good Class Bungalow, I will still get the best that I can afford.

Quite often, that’s an older and not a newer HDB flat. Here’s a look at how there’s a real size difference between older and newer flats. At the same time, older flats tend to be in estates like Queenstown, Tiong Bahru, Toa Payoh, etc., where amenities are already present. I can’t walk two blocks in Queenstown without seeing a minimart, coffee shop, hardware store, prata joint, or some other thing I will definitely need at some point (sometimes at 2 am in the morning). 

Knowing my health, I am certain that at the age of 50+, these amenities are less likely to result in an SCDF ambulance ride than, say, a pickleball court or a swimming pool. I’m too tired to even use them now, let alone much later in life. 

You can see a lot of this is age-related, and I’m not just talking about the flat

But I do hope it paints a clear picture of what’s going on. More people are going to feel this way as our society ages; and there’s some natural correlation with older Singaporeans, with large accumulated savings, who are willing to pay for million-dollar flats. 

And much like the kid who forced me to install TikTok, it’s going to feel scary. There’s a sense that public housing is out of control, because of all of these million-dollar flats; but we need to understand what’s really happening here.

Yes, some million-dollar flats are indeed bought by overly optimistic speculators, or by younger folk disgruntled with the sky-high private market. But many million-dollar flats are just due to an ageing generation of buyers, who are paying for comfort and dignity in their later years. 

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