PM Lee sheds more light on 99-year leases for HDB flats

Romesh Navaratnarajah20 Aug 2018

PM Lee noted that Singapore would run out of land for new public housing if the government sold HDB flats on a freehold tenure.

With over 80 percent of the population living in Housing and Development Board (HDB) flats and the recent questions on the flats’ depreciating value, Prime Minister Lee Hsien Loong explained why HDB flats would have to be returned to the government after 99 years, reported Channel NewsAsia.

“There is one fundamental reason why,” said PM Lee during his National Day Rally speech on Sunday (19 Aug). “We need to be fair to future generations …  After (99 years), the flat comes back to the state, the government redevelops the land, and builds new flats for future generations. This is the only way to recycle the land, to ensure all our descendants can buy new BTO (Build-To-Order) flats of their own.”

More: Home buyers looking for HDB flats may like to visit our Listings

He noted that if the government sold flats on a freehold tenure, the time would come when it would “run out of land to build new flats”.

The owners of such flats would pass them down to their descendants, while those not lucky enough to inherit a home would get nothing.

“Our society would be split into property owners and those who cannot afford a property. That would be most unequal, and socially divisive,” he said, while adding that this is the reason 99-year leases also apply to private housing.

He also explained why the government cannot extend the leases.

“If you look at older buildings today, some look rather worn, even before they are 50 years old. After a century, I am sure the mechanical and electrical systems will be obsolete. The concrete will have deteriorated in our tropical climate,” said PM Lee.

“And even if we could fix all that, the recurrent maintenance costs would be very high.”

Thus, it would be better to let the lease expire, demolish the blocks taken back and build new ones that are more suited to the needs of the future generation, he said.

Moreover, 99 years is a very long time, he noted.

“Very few of today’s HDB owners will outlive their leases. HDB estimates that it will happen to less than two percent of households.”

While it could not happen to your children, this should not be a problem “if your children buy their own BTO flat, with its own 99-year lease, as many do. Because then an inheritance for them would be a gift and a bonus”, he added.

For those living in resale flats, PM Lee said they still have “quite a long time” to enjoy their homes given that the oldest flats in Singapore have at least 47 years left on their lease.

They also need not worry once the time comes that they would have to return the flat to the state. This comes as the government would help them secure another flat to live in.

“It may be a BTO flat from HDB with a fresh 99-year lease … It may be a resale flat on a shorter and cheaper lease. Or it may be a two-room Flexi flat for retirement – different options depending on your needs and what you can afford,” he said.

“But whichever option you choose, you will have to pay for the lease…This is only fair, because you bought the original flat knowing when the lease would run out, and knowing that the flat would then have to be returned to HDB.”

More: Can you afford an HDB flat? Check your affordability now. 


Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email


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