In response to the collapse in prices of older HDB flats, MND Minister Lawrence Wong has insisted that “there is still value in older HDB flats”. CNA
So long as the value of older HDB flats is not zero, Singaporeans can expect the million-dollar minister to keep repeating the same statement.
From 2013 to 2017, the price of a 4-room HDB flat above 40 years in Queenstown has plummeted by $124,000. A similar 5-room flat in the same estate lost $126,000 in value from 2015 to 2017.
Lessees of older flats are now KPKB-ing because they were ‘guaranteed’ by ministers – including LKY and son – that HDB flat prices would never fall.
Accordingly, most HDB lessees then planned to monetise their HDB lease, aka assets, for retirement and are increasingly feeling that they have been scammed. The demand for HDB flats above 40 years have reduced to a trickle.
Using the above example, if prices of flats above 40 years had remained unchanged, similar to those below 40 years, downgrading could mean an additional $120,000 for a retiree living in Queenstown. For a couple who top up this amount in CPF Life, they will receive an additional $1000 in total monthly payout for life.
Although HDB lessees of older flats have lost a big chunk of their retirement income, this appears to be of no concern to Lawrence Wong. And understandably so.
A HDB lessee whose flat value has fallen from $670,000 to $550,000 since 5 years ago is no big deal to Lawrence.
After all, $550,000 is still value right?
Don’t be surprised that even if prices of older flat continue to fall, Lawrence’s mantra will be repeated in the media: “There is still value in older flats”.
Looks like HDB lessees can only suck thumb and await another PAP U-turn closer to GE2020.