Recently, Finance Minister Heng Swee Keat addressed the issue of the new 99-year-lease Housing and Development Board (HDB) flats which has been generating scepticism from the public due to its rental aspect.
Mr Heng, who was quoted by TodayOnline in its report, claimed that a 25-year-old Singaporean buying a new HDB flat would still have more than 30 years of lease left when the owner turns 85, which is the life expectancy in Singapore.
The government-built flats and its lease decay issue have been the talk of the town for the past two years since March 2017 when HDB dwellers discovered that their flats will possibly return to the possession of state once its 99-year contract expires.
In response to PropNex’s chief executive officer, Ismail Gafoor on this “very much political” issue, Mr Heng explained that HDB dwellers are not merely tenants as they would still have the choice of passing on the property to their children at an old age.
As Prime Minister Lee Hsien Loong and National Development Minister Lawrence Wong have done before, Mr Heng once again reassured Singaporeans of the value of their flats despite their old age. However, his point of view did not appear to have elaborated on why he thinks this is the case.
The PropNex conference touched on the agency’s performance last year (2018) in which they managed to garner a record revenue of S$431.5 million. According to Mr Ismail, this was partly due to the increase of property agents by 13 per cent to reach more than 7,500 compared last year’s number.
In spite of that, the property market has slowed considerably after the Government’s imposition of the cooling measures in July 2018. Mr Heng justified this measure of action as a way to control the “very irrational” market and ensure that property buyers do not suffer from “irrational exuberance” with the price fluctuations.
He also stated that a sustainable pace of increase has to be aligned with the rates of economic and wage growth.
According to Mr Heng, foreign businessmen he encountered often mentioned to him that properties in Singapore are pretty “cheap”. Compared to other global key cities which he did not specify, the Singapore market and its property prices are “still quite affordable”.
Hence, the cooling measures are “necessary” in order to protect Singapore’s property market from the negative impacts of the downside risks and the “speculative wave” in the region.
Moreover, foreigners buying property in Singapore are subjected to a 20 per cent Additional Buyers’ Stamp Duty (ABSD), which is higher than the 12 per cent and 15 per cent paid by Singaporean citizens and permanent residents respectively when buying their second property.
