Forum: Unwarranted optimism for HDB lease top-ups turns home-buying into gamble

HDB flats in Toa Payoh, on Dec 16, 2019.
HDB flats in Toa Payoh, on Dec 16, 2019.ST PHOTO: LIM YAOHUI

The proposal to provide a feasible solution to older Housing Board flats that face an undetermined fate when their 99-year lease expiry approaches is certainly well-intentioned (HDB reform proposals will further separate resale and BTO markets, Dec 23).

If all these ageing flats are granted amnesty from lease constraints and have their leases topped up - which is easy enough to do but just kicks the can down the road - then similar top-ups must be equitably extended to private housing on leasehold land for the same nominal amount of extension levies.

Otherwise giving one segment of the populace repeated bites of the cherry may be seen as being prejudicial.

It may seem a sham, then, to continue selling HDB properties on a contractual 99-year lease when this number is known to be extendable to the length that citizens can pressure the Government for.

We make informed decisions on investments based on prevailing information and must accept the natural consequences of our calculations. This is so in particular with our biggest investment - the house.

That leasehold properties have a finite shelf-life and whose values must drop beyond 30 or 40 years into the lease is not privileged information, and there is no reason to plead ignorance.

Unwarranted optimism for lease top-ups and wishful punting on the Selective En bloc Redevelopment Scheme cloud decisions, turn home-buying calculations into opportunistic gambles that will sour should the authorities stick to the contractual letter of the law and allow the 99-year leases to lapse.

China, which parcels out land in 20-or 70-year leases, has no clear policy on lease top-ups.

Obviously its problem is far more pressing than ours and there will be a lot to learn and adapt from the strategies it devises.

Yik Keng Yeong (Dr)

A version of this article appeared in the print edition of The Straits Times on December 28, 2019, with the headline 'Unwarranted optimism for lease top-ups turns home-buying into gamble'. Subscribe