More people dying: So, change HDB rules?

hdb-singapore

With more people dying – is changing HDB policies good for Singaporeans?

I refer to Ku Swee Yong’s article “Prepare for supply avalanche as ageing HDB flat owners die” (Straits Times, Mar 5).

It states that “Even as a larger supply of resale flats comes on the market from a passing generation of baby boomers, demand will go down due to a shrinking youth population. The widening gap between supply and demand will add significant downward pressure on resale prices.

Compounding the issue is the ageing of HDB flats, which are sold on 99-year leases. The depreciation of old HDB flats steepens from the point of 40 years of age and by 2030, more than 400,000 HDB flats will be left with a remaining lease of 59 years or less. This is likely to lead to lower prices.”

As to “To lessen the impact, Singapore can attract more foreigners to become permanent residents and citizens to boost demand for resale HDB flats. But that is contingent on the economy creating tens of thousands of additional jobs every year and remaining attractive to foreign migrants” – the continuance of such a policy – about 30,000 New PRs and 20,000 new citizens granted per year, may continue to have negative implications for Singaporeans.

For example, very little of the jobs growth in the last three years may have gone to true-blue Singaporeans.

Also, resale flats’ prices may be less affordable.

With regard to “Alternatively, HDB can loosen “ownership” rules to allow beneficiaries to inherit HDB flats, even when they already own a flat. Subletting rules may then have to be relaxed so the flats will not remain vacant” – allowing Airbnb in Singapore may help to relieve not just this issue, but also help many cash-strapped Singaporeans.

In respect of “I would strongly recommend a third option. In death-related and inheritance cases, the HDB could repossess the flats at the prevailing resale value, allowing the beneficiaries to divide the cash proceeds.

This gives the HDB a larger stock of rental flats so that the public has more housing choices. The HDB could also refurbish the newer flats acquired and offer them for resale under the Sale of Balance Flats scheme – at prices that take into account the remaining years of lease” – whilst this is a good suggestion – it may have negative implications for Singaporeans, as long as the “profit-making” public housing policies remain.

For example, one needs only to look at the financials of schemes like the Lease-buyback scheme to see how much money and equity HDB flat owners are losing?

Leong Sze Hian

 

About the Author

Leong
Leong Sze Hian has served as president of 4 professional bodies, honorary consul of 2 countries, an alumnus of Harvard University, authored 4 books, quoted over 1500 times in the media , has been a radio talkshow host, a newspaper daily columnist, Wharton Fellow, SEACeM Fellow, columnist for theonlinecitizen and Malaysiakini, executive producer of Ilo Ilo (40 international awards), invited to speak more than 200 times in over 30 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of Indonesia and Brunei. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.