Unrealistic to expect bailout for older flats

With the increasing number of properties with a shorter lease balance, there have been calls from certain quarters for the Government to intervene (Grappling with issue of ageing HDB flat leases, June 5; Clarity on HDB leases needed for retirement planning, by Ms Cindy Tan, May 22; and Seniors facing problems selling old flats, by Mr Ronnie Lim Ah Bee, April 3).

All buyers of Housing Board flats or leasehold private properties are made aware, prior to signing the purchase agreement, that upon expiry of the lease, the land reverts to the state.

Hence, it is only natural that the value of a property with a short lease balance would be worth less than another property with a longer lease balance, all things being equal.

With the current and previous ministers for national development reminding Singaporeans that HDB flats and private properties would be returned to the state upon the expiry of the 99-year lease, the onus lies on Singaporeans to manage and plan for this eventuality now.

It is unrealistic and fiscally imprudent to expect the Government to bail Singaporeans out after a choice made of their free will.

This includes asking the Government to ensure that the value of the leasehold property remains at a high price indefinitely or to extend the lease at the expense of our future generation, which is not tenable given our limited land space.

Instead, we should be thankful to the ministers for being upfront on this issue and take on the responsibility of managing the lease expiry ourselves.

Additionally, we should not allow the issue of lease expiry to be politicised as, fundamentally, it is an issue of "product specification", which consumers are given a choice about in an open market.

Lee Yong Se

A version of this article appeared in the print edition of The Straits Times on June 08, 2018, with the headline 'Unrealistic to expect bailout for older flats'. Print Edition | Subscribe