Will My HDB Flat Be Worth $0 After 99 Years?

What happened to a 99 year lease on your flat actually runs out? Does the government really just take it back and give you nothing? Join us on Stacked Homes where we figure out what happens and whether or not it's fair. Hi, I'm Lionel and thanks for joining me on Stacked Homes. Today we're going to look at a topic that's very important to many Singaporeans. That is whether or not their HDB flat is going to really be worth zero dollars at some point in the future once their lease expires and whether or not perhaps there are different ways that we should be approaching this. Well let's start with the direct answer to this question. If we're going to look at the official line or the official stance, well the answer is yes, once the lease is up, it's up and the value of the flat really does drop to zero. This is the official position of what will happen. Everything gets returned to the state. We haven't actually seen this yet with an HDB flat at the time that we're discussing this but we have seen that it really will happen. We've actually seen the government do this. We saw a batch of private properties in Geelong for example which did get taken back with no compensation so the government is dead serious when they say that they will do this.

当你的公寓99年租约到期时会发生什么？政府真的会接管你的房子并且不给予任何补偿吗？加入我们在Stacked Homes的平台，我们会探讨发生的情况以及这种做法是否公平。大家好，我是Lionel，感谢加入Stacked Homes。今天我们要讨论一个对许多新加坡人来说非常重要的话题，那就是在租期到期后，他们的建屋发展局（HDB）公寓是否真的会变得一文不值，以及是否有其他的应对方式。现在我们直接回答这个问题：如果我们看官方的说法，答案是明确的，一旦租约期满，房子的价值确实会归零，这是官方立场。所有的东西都会被收回至国家手中。目前讨论这个问题时，还没有见过HDB公寓被收回的情况，但我们确实见过这种事情发生。比如在Geelong，有一批私人住宅的租约到期被收回，没有任何赔偿，所以政府说他们会这样做是认真的。

The issue here is not every flat may actually run all the way to the end of its 99 year lease. There are two things that can happen in between. The most ideal solution for most HDB flat owners is the selective on block redevelopment scheme or CERS. This is considered ideal by many because you get a replacement flat with a top-down 99 year lease. You may get further compensation as well for moving from your flat but the problem with CERS is that it's only going to happen with a very small number of HDB projects. Right now an estimated 4 to 5% of HDB estates will see CERS. It's not really a solution that you can count on. We do know that some HDB flat owners like to gamble a little bit on this. They like to try and pick locations where they think CERS will happen but it's probably not something that you can reliably count on.

问题在于，并不是每个组屋都能走完整个99年的租约期。中间可能会发生两种情况。对大多数组屋业主来说，最理想的解决方案是选择性整体重建计划（SERS）。许多人认为这是理想选择，因为你可以获得一个全新99年租约的替代组屋。同时，你可能还会因为搬迁而获得额外补偿。但是，SERS的问题在于，它只会发生在极少数的组屋项目中。目前估计只有4%到5%的组屋会有机会进行SERS。这并不是一个可以可靠依赖的解决方案。我们知道，一些组屋业主喜欢在这方面赌一把，他们喜欢挑选那些他们认为可能会有SERS的地段，但这大概不是一个可以稳操胜券的策略。

The other thing that might happen which we haven't seen yet is the voluntary on block redevelopment scheme or VERS. Now when an HDB flat reaches around 70 years or older there will be a VERS offer made and if sufficient flat owners consent to the VERS then the flats will be bought back by HDB and the payout will be based on factors such as the current market value and the remaining lease of the flats and so forth. If this sounds a little bit sketchy it's because we haven't seen a VERS exercise in Singapore yet so we don't have the exact details right now. But one thing we do know for sure the government has made clear that VERS compensation will be less generous than CERS. Now and we suspect the compensation will be somewhat based on Balas curve which we've talked about a little bit more in the Stack Homes blog so you can have a look at it for more details if you like. In essence the Singapore Land Authority or SLA when they are pricing the top up of leases they seem to follow a pricing curve that's broadly similar to Balas curve where lease whole values are pegged as a percentage of free whole values. So it's reasonable to expect the value of your remaining lease will probably be priced roughly the same way.

另一种可能会发生但我们尚未见到的情况是自愿集体重建计划（VERS）。当一个组屋的使用年限达到70年或以上时，政府会提出VERS的选项。如果有足够的屋主同意参加这个计划，政府就会回购这些组屋，赔偿金额将根据当前的市场价值、剩余租赁期等因素来决定。如果这听起来有点不确定，那是因为我们在新加坡还没有见过这样的操作，所以目前还没有具体细节。不过，我们可以确定的是，政府表明VERS的赔偿将比CERS（集体出售计划）更少。此外，我们推测赔偿可能会参考Balas曲线，就像新加坡土地管理局（SLA）在给租约年限补充定价时，似乎也遵循与Balas曲线类似的定价曲线，将租赁价值设定为自由产权价值的一定百分比。因此，合理推测您的剩余租赁的价值可能会以大致相同的方式定价。如果您想了解更多详细信息，可以查看Stack Homes的博客。

With VERS what we will worry about is really the process of getting consent because if the process is anything like it is for a condo going on block then the nature of many HDB projects can make it quite tough to get a common consensus. This is because firstly more HDB owners are pure home owners than investors they are not so much moved by the allow money on the bottom line they may just like where they live it can be a lot tougher to get a consensus if the majority of people think like this. You also have a problem in that HDB has a higher and much more varied population and this can make a share consensus tougher to acquire it's not like a boutique condo where there's just 50 units and all the home owners are generally from the same socioeconomic background and have the same general intent with their property. And of course if we are looking at an old development which we are at 70 plus years old we may have a lot of older folks there and we can't imagine many people agreeing to move when they're in their late 60s or their late 70s especially not for that small amount of compensation that they're getting.

在处理全民住宅再开发计划 (VERS) 时，我们真正担心的是如何获得居民的同意。因为如果这个过程类似于公寓集体出售，那许多组屋项目的性质可能会让达成共同一致变得相当困难。这首先是因为更多的组屋业主是单纯的住户而非投资者，他们对金钱回报的关注较少，可能只是喜欢他们现在居住的地方。如果大多数人都这样想，那达成共识就更加困难。此外，组屋住户人口众多且背景各异，这使得达成共享共识更具挑战。这与只有50个单位的小型公寓不同，后者的住户通常来自同一社会经济背景，并对他们的地产有类似的总体意图。当然，如果我们谈论的是一个建成已有70多年历史的旧项目，可能会有许多年长者在其中，我们很难想象他们会同意在60多岁或70多岁时搬迁，尤其是考虑到他们得到的补偿金额非常少。

The fact that commonly gets brought up is you can just sell your HDB flat for the least decay gets too advanced. On a personal level that may fix the issue although on a societal level of course this isn't really a solution as we're kicking the proverbial can down the road here someone still ends up holding on to that older flat. So there are some real obstacles to selling older flats here. For example once you're flat this nearing the final stages of its life financing is a lot tougher to acquire. Can't use your CPF to buy a flat with 20 or fewer years left on the lease for instance a bank won't finance flats with 30 or fewer years on the lease and all of these things can make it quite tough to sell an old flat. Some people will point out of course that really old flats selling at million dollar prices and it is true.

常被提及的一件事是，你可以在HDB组屋房屋老化问题变得严重之前卖掉它。从个人层面来看，这可能解决了问题，但从社会层面来看，这并不是一个真正的解决方案，因为这只是把问题推给了未来，最终会有人接手这些老旧的组屋。因此，卖掉老旧组屋确实存在一些实际障碍。例如，当组屋快进入使用寿命的最后阶段时，融资会更加困难。以公积金购买剩余租赁期20年或更少的组屋是不被允许的，而银行也不会为剩余租赁期30年或更少的组屋提供贷款，所有这些因素都会使得出售老旧组屋相当困难。当然，有人会指出，确实有一些非常老的组屋能以百万价格售出，这也是真的。

You can see we've done a study on where these million dollar flats come from. Many of them are in fact amongst the oldest and most developed HDB towns but the thing is these are very mature locations which are highly desirable for flats in less prime locations. The appreciation and difficulty selling are going to be greater obstacle. Mind you we would add the caveat that the speed of depreciation has been exaggerated a little bit in recent years. The good news is flats don't appreciate quite as fast as some people think they do. Nonetheless Singapore should avoid buying flats that won't necessarily a 90 because not every HDB town is going to be like a Dong Baru or Queenstown or Dishan. And even in those desirable locations we will be very careful before making assumptions that there is going to be such or that those locations will continue to remain as desirable in the decades to come.

你可以看到我们已经研究了这些百万美元公寓的来源。事实上，许多公寓位于历史悠久且发展完善的HDB城镇。这些地方位置成熟，对那些位于更偏远地方的公寓更具吸引力。然而，增值和销售的困难可能会成为更大的障碍。不过，请注意，近年来公寓贬值的速度有些被夸大了。好消息是，它们的升值速度并没有一些人想象的那么快。然而，新加坡在购买不一定能住满90年的公寓时应谨慎，因为并不是每个HDB城镇都像东巴鲁、女皇镇或碧山那样。那么，即使在这些理想的地段，我们在假设这些地段未来几十年仍会保持受欢迎时，也需要非常小心。

So with that being said what are some possible solutions to this 99 year lease issue and the effects that we will see. Well the first one that we can already see is of course that we build back denser. It is widely known that older HDB flats are bigger. This is a trend that slightly continues if the population keeps increasing. Older HDB developments are bought over, they are demolished and rebuilt into projects either private or public that can house more people. So a 20 story block is demolished and it is a place you find a 30 story block with more units and so forth. Now one possible solution that we think should be considered is the involvement of private developers. Property developers tend to be quite land start and we feel that many of them would be quite happy to buy over those old flats and those locations. Private developers are pretty eager to make on block attempts for existing properties.

那么，对于这个99年租赁问题有哪些可能的解决方案，以及我们会看到哪些影响呢？首先，我们可以看到的一个解决方案就是重建得更加密集。众所周知，较早期的组屋单位通常更大。如果人口持续增加，这个趋势可能会略微持续下去。较老的组屋开发项目会被买下、拆除，然后重建成容纳更多人的私人或公共项目。比如，一个20层的建筑被拆除，可能会出现一个有更多单元的30层建筑。现在，我们认为一个值得考虑的可能解决方案是吸引私人开发商的参与。房地产开发商通常非常渴望获得土地，我们认为他们中的许多人会非常乐意买下那些老旧的组屋和它们所在的位置。私人开发商非常热衷于尝试使现有房产进行集体出售。

We have seen that now but currently they cannot do so with HDB flats. They can only do it with private homes. This actually deepens our wealth divide because it means that if you are a private home owner you have a massive advantage over an HDB flat owner. A person owns an HDB flat. It does not have much to look forward to other than SIRs, VERS or just being able to resell this flat to someone else. As a condo owner you will notice that many leasehold condos they still get bought at good prices because the expectation is that many condos won't even make it past their 40 years here anyway. They get bought over by a developer, the sellers are happy with the deal that they get and it becomes quite a different end game from an HDB flat owner. So it might make sense to have some degree of involvement from the private market here in sort of clearing and renewing the stock of older flats.

我们已经见到了这种情况，但目前他们无法对组屋（HDB）进行同样的操作。他们只能在私人住宅上这样做。这实际上加深了我们的财富差距，因为这意味着如果你是私人住宅的拥有者，你比组屋拥有者有很大的优势。一个拥有组屋的人，除了可能的资产提升计划（SIRs）、老旧屋翻新计划（VERS）或仅仅是能够将这套组屋转卖给其他人外，没有太多期待。作为公寓拥有者，你会注意到，许多有租赁期限的公寓仍能以不错的价格出售，因为人们期待这些公寓在40年内往往就会被开发商收购，卖家对所获得的交易感到满意，这与组屋拥有者的结局大不相同。因此，或许让部分私人市场参与进来，协助清理和更新老旧组屋库存，是有意义的。

That possible solution and in fact that we could possibly see changes to the lease renewal methods. We don't know how open the government is to doing this but certainly many people have brought this up as a potential solution. So in many other countries with leasehold properties Singapore is not the only one. The owners get given an opportunity to renew the lease at a certain cost. Possibly if we use this as a solution then instead of possibly evicting everyone once the lease runs out. The HDB couldn't impose a sort of a one time charge or some other ways with which to renew that 99 year lease. Now this is not going to be less politically ugly and smoothly. They allow this. Town councils have to be heavily involved in any such kind of move. We do think things can also get politically charged.

可能的解决方案是我们或许会看到租约续签方法的改变。我们不清楚政府对此持多开放的态度，但显然很多人已经把这种方法作为一个潜在解决方案提出。在许多其他拥有租赁产权的国家，新加坡并不是唯一一个，业主通常有机会以一定费用续签租约。可能如果我们采用这种方法，那么在租约到期后，就不必驱逐所有人了。建屋发展局（HDB）可以通过一次性收费或其他方式来续签99年的租约。不过，这个过程可能会遇到政治困难，并不一定会顺利进行。如果要推行这项措施，市镇理事会必须深入参与，我们认为事情也可能变得政治化。

At some point there's going to be a few conspiracy theories about why it costs that much. Some people are going to say you know is it because our town is in an opposition party area where as that town is not then is that going to be a price difference. So we do see that that's probably going to happen. If the lease drops to zero and people get evicted that's also an ugly situation because there's going to be disputes about the fairness of that. That's it.

总有一天会出现一些阴谋论来解释为什么花费会这么高。有人可能会说，是不是因为我们的城市所在地区是反对党执政，而另一个城市不是，因此导致了价格差异。我们认为这种情况可能会发生。如果租约降到零，导致人们被驱逐，那也是很糟糕的情况，因为会有人对这是否公平产生争议。就是这样。

An option for lease renewal may not be a bad idea because still in the end older residents or families living in schools it does mitigate the need for them to have to move that may be worth more than the cost of the disputes. More sort of semi solution simply have an even more sandwich generation. At some point when HTV flat leases start to run out we could of course look towards our children or grandchildren to come. For the younger generation what that means is if you have elderly parents who are running out of home you may be the one who needs to help them with housing.

续租选择可能不是一个坏主意，因为最终对于年长的居民或住在学校附近的家庭来说，这样可以减少他们搬家的需要，可能比争议的成本更有价值。相对来说，这是一种折中的解决方案，但这也可能让"夹心一代"变得更普遍。当组屋的租约快到期时，我们当然可以寄希望于我们的孩子或孙辈。对于年轻一代来说，这意味着如果你的父母租约到期，你可能需要帮助他们解决住房问题。

This is a concern that some Singaporeans will face in the future as more flats near the end of their lease. Some people are also probably going to start paying attention to the age of their parents home. For those who are going to run out of lease our financial planning may need to be more extensive because not all retirees are going to be in a position to sell and move to a newer flat. So perhaps one other way to help here one other solution is some schemes and subsidies to help Singaporeans who have to house their parents especially if those parents have run out of lease.

随着越来越多的组屋租约即将到期，一些新加坡人未来可能会面临这个问题。有些人可能也开始关注父母房子的使用年限。对于即将租约到期的人来说，我们的财务规划可能需要更加全面，因为并不是所有退休人士都有能力出售旧屋并搬入新屋。因此，可能的解决方案之一是为需要为父母提供住房的新加坡人提供一些计划和补贴，尤其是当这些父母的住房租约已经到期时。

With all this being said and the worry about leases running out there is one other important factor to take note of which can contribute to the overall picture on this. Let's not forget about the age of our citizens as well as our flats right. So Singapore is a rapidly aging country at some point the older generation is going to pass down. They will hand down their flats to their children but given that Singapore already has a 90% home ownership rate chances are most of their children will already have their own flats, condos and so forth they'll be unable to inherit that. We aren't sure exactly what the plans are in place for this but if it's not controlled it could lead to a deluge of vacant resell flats on the market unless of course there's many different rule changes by then.

综上所述，除了担心租约到期外，还有一个重要因素需要注意，那就是我们公民和组屋的年龄。新加坡是一个快速老龄化的国家，随着时间推移，老一代将会去世，他们会把组屋传给他们的孩子。然而，由于新加坡的住房拥有率已经达到90%，他们的孩子大多数可能已经拥有自己的组屋、公寓等，因此无法继承父母的组屋。目前我们还不清楚对此有什么计划，但如果不加以控制，可能会导致二手组屋市场出现大量空置房。当然，除非到时有很多政策变动。

Now we understand that this is a little bit hard to visualize in 2022 the money is through the roof right now and everyone is complaining about insufficient housing but it is important to remain conscious in the long run of our aging problem and how that really impacts the number of flats that we should be having. But of course some people might say that maybe a deluge of vacant flats and much lower prices isn't really a bad thing for the future generation so that's an opinion as well.

现在我们了解到，在2022年要想象这种情况有点困难，因为目前房价飞涨，很多人都在抱怨住房不足。 但从长远来看，重要的是要清楚意识到我们的人口老龄化问题，以及这对我们应该拥有的住房数量的实际影响。当然，有些人可能会说，将来如果出现大量空置房和更低的房价，对下一代来说可能并不是件坏事，这也是一种观点。

For more on the topic I said on falls do follow us on stacked homes please do comment below. Tell us what you think we're very interested in hearing your opinions. Let us know your questions as well. We would greatly appreciate a like and a subscribe and of course do follow us to get for the updates and notifications on this as they become available. More concise breakdowns are available on the stacked homes editorial as well so we do hope you'll drop by and have a look. Thank you so much again for joining me this is Ryan from Stack Homes I'll see you again soon.

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