Speaking at a PropNex conference, the minister also dismissed the notion that HBD dwellers are not owners but merely tenants.
Finance Minister Heng Swee Keat has assured Singaporeans that HDB flats still have value even when its owner has reached 85 years old, reported Today Online.
Citing the example of a 25-year old Singaporean acquiring a new 99-year-lease flat, Heng noted that the housing unit will still have over 30 years of its lease left when the owner reaches 85 – the life expectancy in the city-state.
More: Older HDB Resale Flats Depreciate Slower Than Private Condos: Study
“Is there still value in the flat? Absolutely,” he said at the annual PropNex conference on Tuesday (19 Mar).
“At the age of 85, you decide whether you want to pass on the property to your children. You decide what you want to do with it. There is still value in the property. It is not going to go to zero when you are 85.”
The minister also dismissed the notion that HBD dwellers are not owners but merely tenants.
“This debate that is going on… (People saying), ‘No, this is a terrible hoax… This is macam (like) rental’, I mean, come on, get real,” he said.
The perception was born out of the authorities’ clarification in March 2017 that the majority of HBD flats will revert to the state upon the end of the 99-year lease.
When asked about the government’s reason for intervening in the property market with the cooling measures, Heng explained that markets can be “very irrational” when left on its own. With this, the authorities had to make sure that property buyers are not “suffering from irrational exuberance”, believing that prices will only go up.
“The result is that the prices overshoot, and then when it comes down, it also overshoots. So you have huge cycles, which is not good for your business and not good for individuals.”
He added that a sustained pace of growth will be to align it with the rate of wage growth and economic growth.
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Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
