Photo of HDB flats at Lorong 9 from Google Map

Property Update published an article on Monday (29 Oct) revealing that the value of old 3-room HDB flats in Toa Payoh has dropped by as much as 30 percent in the past few years. These are old flats with about 50 years of lease left.

The writer, Timothy Quek, is a property agent. He said, “As a property agent specializing selling HDB flats in Toa Payoh, I can tell you that it is very difficult to find buyers for these aging HDB flats which have undergone upgrading just a few years ago.”

“Sellers who ask for unrealistic prices for their units, even at bank valuation, usually are unable to sell them. For those who need to offload their flats urgently, they will have to give steep discounts of sometimes more than $50,000 to entice buyers,” he added.

He dug out transaction data from HDB website of units belonging to Blk 9 Lor 7 Toa Payoh to illustrate:

* Figure for Apr 2015 was the average value of 3 transactions in that month

Mr Quek shared that if the rate of decline continues at the same rate, the same flat will only sell for $154,000 in 10 years’ time and $107,800 twenty years later. Hopefully, VERS will be offered by the government then. But he feels that the government will not pay the market price of $107,800 for VERS at that point in time.

“Probably much less and those buyers above who paid more than $280,000 for these flats today will make a terrible loss,” he said.

“If you intend to sell your HDB flat, you should consider selling it soon before its lease declines further. The prices of HDB flats usually face a sharp decline when they are more than 40 years old when restrictions of using CPF and bank loan to finance their purchase kick in, thereby severely limiting the pool of ready buyers,” he advised.

Lawrence Wong: Vast majority of flats to return to HDB when leases run out with no compensation

In fact, from the transaction figures above, one can see that after National Development Minister Lawrence Wong told everyone about the hard truth of HDB flats in March last year, the value of old HDB flats literally nosedived.

He reminded everyone that only 4% of HDB flats were redeveloped through Sers since 1995. That is, these old flats, typically at very good locations, were bought back by HDB and the flat owners were compensated accordingly. HDB then knocked down the old flats and built new ones in the same land area for later sale to the public again.

But the vast majority of flats, he noted, will be returned to HDB when their 99-year lease run out without any compensation. “As the leases run down, especially towards the tail-end, the flat prices will come down correspondingly,” he said. “So buyers need to do their due diligence and be realistic when buying flats with short leases.”

Citizens told by PAP Ministers in the past that HDB would grow in value as assets

Before Minister Wong’s reminder, PAP ministers, including PM Lee himself kept talking about the value of HDB would grow in value over time.

At an international conference in 2010, PM Lee said, “The HDB flat is not just a shelter but also a key investment asset… over the long term, the value of HDB flats depends on the strength of the Singapore economy. Provided Singapore continues to do well, our flats will maintain their value, and Singaporeans can enjoy an appreciating asset.”

And just before 2011 General Election, then National Development Minister Mah Bow Tan even said, “We’re proud of the asset enhancement policy. (It) has given almost all Singaporeans a home of their own… that grows in value over time.”

However, as seen in the chart, the value of old HDB flats is plummeting. It doesn’t maintain nor grow over time anymore. As mentioned by Mr Quek, those who bought 3-room HDB flats in Toa Payoh at more than $280,000 would be making terrible losses if they were to sell their flats when they are more than 40 years old.

Perhaps these people can try asking PM Lee or Mah Bow Tan for compensation.

Subscribe
Notify of
0 Comments
Inline Feedbacks
View all comments
You May Also Like

MOM: Telecommuting should be allowed by companies where "reasonably practicable"

Companies that do not provide telecommuting measures for workers at jobs that…

New Inter-Agency Committee to Promote Road Safety

Parliamentary Secretary for Transport, Associate Professor Muhammad Faishal Ibrahim spoke on Wednesday…

志工拿新床铺助知足老奶奶 网民纷纷按赞

本地义工组织“让希望活下去”分享,他们在进行家访时,协助一位知足老奶奶的经历。让网民们备受感动,纷纷表示乐意提供协助。 网友Lee Siew Yian于本月10日上载有关帖文,分享了他们在两天前(8日)傍晚,假明地迷亚路(BENDEMEER ROAD)附近组屋进行家访行动时,震惊于这一对老夫妇所面对的困境,并感动于老奶奶的知足行为。 老夫妇家徒四壁 她指出,当天她和友人到老夫妇家进行访问时,惊见家中地板空空的,没有床铺等,不禁问老奶奶晚上如何过夜的事情。 “我在很‘薄’的床铺上过夜,我的先生在椅子上睡觉。” 老奶奶的回答令网友感到心疼,就表示该组织有送出新的床铺,而且是单人尺寸的,就问老奶奶需要几个。 网友在发问后,还不禁自嘲明知故问,岂知老奶奶只表示“要一个”。 网友当下就无言了,只拿起笔和纸写下了“两个”。 Lee…

中国前国务院总理李鹏逝世

中国前国务院总理李鹏,于北京时间2019年7月22日晚间11时11分辞世,享年91岁。 据新华网报导,李鹏生于1928年10月,四川成都人,1945年11月加入中国共产党,1948年被安排到苏联求学,此后历任总工程师、发电厂长、北京电业管理局长、电力工业部部长等职,协助推动中国的电站建设和电力生产,“我国电力工业的杰出领导人、核电事业的重要开创者。” 1987年11月,李鹏在六届全国人大常委会第二十三次会议上被任命为国务院代总理。1988年4月,在七届全国人大一次会议上被任命为国务院总理。 而新华网报导:“1989年春夏之交的政治风波中,在以邓小平同志为代表的老一辈无产阶级革命家坚决支持下…,采取果断措施制止动乱,平息反革命暴乱(意指六四事件),稳定了国内局势,在这场关系党和国家前途命运的重大斗争中发挥了重要作用。” 1989年5月19日,在六四事件前夕,李鹏在电视上发表措词强硬的“5·19讲话”,称 “改革开放和四化建设,人民共和国的前途和命运,已经面临严重的威胁”,并指要“旗帜鲜明地制止动乱”,讲话引起首都大学生不满。5月20日,李鹏以总理身分签署国务院令,决定自5月20日起在北京部分地区戒严。 李鹏在结束2届总理任期后,于1997年连任中央政治局常委,在党内的地位仅次于时任中央总书记的江泽民。2003年3月,74岁的李鹏卸任常委,淡出政坛。 李鹏在六四后继续担任政治局常委和总理。他在任期内领导中国的水利工程建设,更成为饱受争议的三峡工程的最大推手。 1992年,人大会议以1767票赞成、177票反对、664票弃权、25人未按表决器的结果,通过李鹏兴建三峡工程的提议。通过票数之低历史罕见,但工程仍于次年开工。