If I am a buyer I prefer old HDB flat with the consideration of the below: 1) old flats quality better 2) old flats bigger 3) flat for me to stay not as an investment 4) I will work out the amount I paid divide by the balance of leasing; as long the per month around if I rent a unit, I go for it 5) old flats, convenience stores cheaper 6) neighbours generally better 7) new flats neighbours closed doors all the time 8) new flats, I talk, neighbours can hear
The no CPF rule for 69 year old flats have been around for the longest time. Assuming BTO owner bought when he is 35, he would have already migrated. His children would be 60+ years with own property. Anyone young person aged 21 owning a 69 year old flat is probably an inheritance. Don't worry about that. There will still be people buying 69 year old flats - private property downgraders. At age 60, use cash. No problem. By the time the lease ends, his time also runs out. Cheaper than renting. As for private flats, they will sell to developers for lease top up. The older the property, the higher the top up, the lower the value of the flat. But, if something in the master plan changes in that area for the better, the value might be preserved. Don't ownself scare ownself. No problem one. Just be prudent when buying an old leasehold property.
Everyone know by now HDB is 99 years and will go to 0. If everyone sell, who buy ? Someone has to right ? The key is still total return meaning rental component for the remaining years plus the home value despite reducing. There is value of old flat if what you plan to stay for the remaining of your years which is shorter than the lease such as when one hit late 50s or early 60s. Better amenties, larger floor area, old friends, good locations, quiet env, rental income value etc. Is too solo just to look at remaining home value Only. Too short-sighted imo. You cannot bring high remaining value flat to your grave ....
Thanks for the video. I bought my hdb w lease 70+ yr for 200k after grant. I stay for 16yrs and along the way rented out for 2yrs and collected 50k. The low cost hdb not only provided me very good space but also let me build up my cpf preparing for retirement. If I were to sell and repurchase a newer hdb, I do not foresee to retire anytime soon….
@@1m65 bought an investment condo , shift all there doesn’t like the location. Shift back the hdb. Hdb is beside mother in law so is a added factor staying put here.
So far I would make use of my low housing cost to accumulate funds to FIRE. Some ppl is using housing as a way to FIRE. See what best for yourself. Ever since I joined 1M65 I managed to reviewed and redo my finance and felt in great position of my housing n cpf n cash funds 🙂
Back in 1970, my father told me, we rent the flat from HDB, not buy nor own the flat. One day, will need to return back to gov. So I have such mindset since when then.
I sold my EM 2 years ago before all these 1mill price tags and was in the market for a 4rm flat, while looking at flats that were about 40+ to 50 years into their lease, I realised that mentally I was not willing to part with more than 350k, regardless of the condition / location / etc. That was when I decided to bite the bullet and buy a 4rm with 95 year lease left. It cost me double of what those very old 4rm flats cost but I feel better knowing that this has a bit more flexibility when i eventually retire in about 25 years time.
@@trentlim9964 I wasn’t willing to pay more than 350k. 😊 also all those older houses would need rewiring of the electrical as well as plumbing for peace of mind. So it really is not an economically viable choice in the end. Are you looking to buy one such house? Or are you trying to sell yours?
The panic will start when 1-2 cluster of hdb near the 99 and we will face with a ripple effect and we will start to question the amount we pay. To pay a lump sum rental. Or just rent and move about.(not much to move around on a tiny island)
"We intend to keep the value of these homes up, it will never go down. Because it will be renewed, the surroundings will improve, and as Singapore prospers, GDP goes up, the value of homes will go up." Lee Kuan Yew 2013
Absolutely! When d lease is left with 50 years, d deprecation will be increasing at an accelerating pace. If its owners occupied its worrying. But when you are renting it out, it's a different story. Cos there is ROI involved.
I read with amuse when some comments say that HDB is for living and not an investment to make profit. Fact: That idea was sold to past generations and it has done well to push our economy forward steadily but GOV has since reverse to idea, knowing that the decays are setting in. Hence they try SERS VERS. giving hope to older flat owners. BUT there is only how much this will work. Because there are no guarantee that your flats will be selected for it. worse is what happen if your flat already cross the 60 year mark, the GOV is not silly to buy back from you at high price, you end up losing both ways, having to lost an your sale and top up even more for a replacement flat.
Same as condo enbloc mah, not all condos will get enbloc. And with leasehold condos running out of lease years, developers may not want to pay a high price to bail these owners out.
Don't worry too much, no SERS no VERS there can be mini-SERS mini-VERS or Sub-SERS, Sub-VERS. Like new waterproofing, new paintworks, new lift, extra fire protection and comes with a short lease extension with a PRICE tag of then market rate. Of course those who can't pay can apply for a grant. Same same cooking method.
Hi Loo. for private flats?condos. It can already enbloc by them. As for HDB flats most of owners already gone before the lease of 70 years. The goverments will adjust the rules. Nothings are stagnant
We are at 5.92m population. 6.5m come 2030 looks realistic. Bala’s curve will have disparity against an increasing demand if supply does not sufficiently catch up
Not all people buy HDB for investment, some really buy for stay. Old flat with good location and condition can also fetch good rental. Dun think too much, many condo also 99 yrs and if everyone aim to sell the flat with 60yrs lease, who buy? A car only last 10 yrs and people are willing to pay soo much for the COE........
Buying an old hdb flat and renting it out is not a good option. Most tenants' lousy and irresponsible tenants will cause serious damage to your flats, etc. Not worth it.
Buying an old hdb flat and renting it out is not a good option. Most tenants' lousy and irresponsible tenants will cause serious damage to your flats, etc. Not worth it.
@@choonhockong8215 I have been renting out my HDB for 25yrs. I do accept wear & tear, things do spoil, plus I have to put in some upkeep cost. I do it as a business, after x numbers of years at least a new coat of paint right? When I bought my HDB, I didn't ever think of renting it out. In my mind its a home. I bought old HDB because at that time its Gov first time giving out grant that near parents HDB for new couple. But things changes when I divorce + job changes. I have to travel work. That's when I start to rent it out.
This whole HDB pricing is a mess. When the govt start selling HDB at market prices to its citizens, they should continue lky policy of replacing another HDB after like 90 years old. I am worry for the children of SG but there is nothing much we can do when majority are not supportive.
Therefore very average income like us should prioritise "a home to stay" mindset, rather than a must to invest in your hdb flat, price crash and value is NA and none of our concern. Stay, wait for SER for new home, choose according to your affordability, if you can top up for bigger or more rooms. The above average group will have the luxury to own private properties, rent, buy and sell either private or hdb at the right time right price.
The analysis seems to ignore that a HDB flat can be rented for about $3k per month. How can an asset have zero value and when it can generate $3k a month in passive income? If you hold a 70 year old flat to the 99 year expiry, you collect nearly $1 mil ($3k *12 * 30) in rental income.
There are many ways this can be monetized. For example for those who are no longer working, they can do rental arbitrage. The retired person could rent out his HDB flat in SG for $3k and rent a much cheaper apartment to stay in JB. The rental difference could then fund a comfortable retirement in JB.
agreed, for a 35 years old , consider 30 years of lease 3000*12*30, buying a unit with 60 years remaining lease is still cheaper than an overall 30 years of rental till retirement, while leasing it out for the remaining 30 years, the ROI is still more than selling it on the market.
I have rent out my HDB for more then 25 years. Before my retirement I travel work. I estimated I have collected in rent more then the current sale price of my HDB. Note last time rent is not like now. 7 years back I step into full retirement in Vietnam. Previously was staying in JB for about 4 years and working in Singapore. About 10 years back I do plan to sell my HDB and get a newer one with longer lease. But I stay put because at that rent is not high & losing rental time to change HDB doesn't make sense. As now my HDB is 40+ years old, I plan to hold it till lease finished or till my death. The major reason is rental now is above $3k for 4 room HDB. I don't see rental will decrease in future 10years. Myself is contemplating SG Gov will still do something when large amount of HDB going to end their lease & there are still poor surviving owners.
Law can and will change. If it involves majority of the population, the government will have to help properties to be fair to them. Property is probably one of the most important assets for people. Taking properties away without compensation would be a but harsh for owners who spend their whole live paying fir it and to become worthless they reach an old age.
By the time comes, this is what I think. 1. Gov will give a "cheap" lease extension for short period. A estimated period for affected owners to pass on. Cheap by the market rate at that time. 2. Relocate affected owners into rental flats. 3. Relocate affected owners into care-centers. Either way affected owners will not feel good.
For less than 80 years lease, You may use the full CPF amount if the remaining lease can cover the youngest buyer until the age of 95 and a prorated amount if the remaining lease does no.
It would be insightful to hear from anyone who have had experiences with HDB flats that have reached the 60-year mark and how they approached the situation. What are the resell prices at their block?🏡
How about condo leasehold reaching 50 - 60 years which also have same decay and no one talk about it. Should buyer buy such old condo at high price with lease decay? Well, sellers can wit for collective sale if no buyers for old condo.
85% Singaporeans live in HDB. When these HDB flats are getting old, Singapore will take care of the residents by moderating the drastic depreciation of the flat values. The lease tenure is 90 years, but the condition of the flats my be still very good to have a zero value at the end of the lease.
Hmm, if bal lease is 40-30 years, it will be harder to sell the flat on the open market. No one would buy considered the depreciating value of the flat. Rather, sell back the remaining lease to HDB.
Most of us wont be here when the lease ends. Even our kids are unlikely to be if we bought a new flat when we were young.Am surprised you didnt know abt the CPF rules. It has been around a very long time. Same applies to private property that is Leasehold too.
Forget about HDB if you consider using it for investment. The onus of HDB is allowing Singaporean to own a house called home. Based on the current monthly rental of a 4 room HDB flat at an average of SGD 3000.00. It work out to about 1.26 million on a 35 years lease (assuming living till age 70 and purchasing the unit at age 35). The flat will be at zero value after the 99 year mark but it provide a home for at least 1.5 to 2 generation and based on a 99 year rental at 3k per month works out to SGD 3,564,000.00. Therefore a new 4 room HDB flat at the current market rate between SGD 600,000.00 and 700,000.00 is only one fifth of the 99 years rental. Of course, if you are selling it before the the 69 year mark, you may gain back some money provided that you do not require to purchase another house.
FYI, I have been renting out my 4rm HDB for 25 years. Rental isn't that great when I started. Its SG$600~700 a month for the whole 4rm HDB for many years. Then slow climb till $2800 for a year only. There after clashes down to $2200 for 4~5 years. So looking at your figure of $3.540 millions if renting out $3k monthly. Its should be at least 50% less about $1.75 millions at max. Then come deductible expenses like mortgage, interest rate, HDB upfront cost, up keeping cost of HDB, rental income tax (average half month per year), rental loss cause change of tenants or reduce number of tenants, cleaning, items removable, replace items, unpaid rent, unpaid utilities, etc. The figure come much less.
For me willing to downgrade to smaller flat when the flat is 60 years old provide the hdb price is at least 2.5 times purchase price .. Meantime can rent out .. still profit
Hdb last 50 yrs appreciatio compound at 4% hence price double in 18yrs, rental yield at 4.5% hence earning double in 16 yrs. 77 yrs old hdb Depreciation at 4.5%, 8.5%(=apprec+rent) at 87 yrs old. Market Drive had 60 yr lease landed hdb, at 50 yrs old with balance 10 yrs lease been en-bloc. Market will react base on buyers budget, demand n supply.
Mr Loo, your video has revealed this fact to all of us. Now who is going to buy your flat in order for you to refresh your lease? So hdb is really for stay in and not for investments.
Not sure my perspective is right. If I don't buy a flat today, I will need to rent. Then I need to pay mkt rate rent which is abt $3k or more depending on where n what I rent. Assuming I need the place for v long term stay eg. 25 years or so, the total amt of rent is almost the price of any HDB flat today. I worry for my child too. But the cost of living incl. salary I earned as a fresh grad back many years ago and my child is different. The price of houses will move accordingly.
House prices should normally go up in value over its life …. The 99 years lease is unfair when prices starts to drop at 60 years because the landed property will just keep increasing over time … I think the govt should have a policy to buy back all hdb at the age of 60 years at market value to redevelop to new HDB for resell with 99 years lease again so the poor low income owner does not face this situation in their life …
i think it is safer to add 5/10 years for MOP. because your future buyers will consider their exit strategy as well. govt might increase the 80 years old benchmark to 85 given that singaporean life expectancy has increased
What about HDB owners who also have another condo ? The truth is HDB give far better rental yield compared to private condo. Typically at least 2% to 3% above private condo yield and yield of HDB also above CPF rates! So owners who have HDB and private condos do not need to sell HDB even if the HDB has 50, 40, 30 years remaining lease. Because with a 7% rental yield on HDB, the owner can get back its initial capital investment every 10 years. So if l am such owner, l will keep my HDB, continuously rent the unit until HDB land lease expire subject to HDB not taking over the land and offer SER. If so, then my HDB got a new lease for another 99 years !!
If everyone rent out, there will be increase in supply, so rent wouldn't drop? Unless we all get ready for 10 mil mainly foreigner population. Or else demand for rental would be less than supply and you wouldn't be able to rent high. Foreigners are not stupid. Some of my colleagues have started living in batam and commute to Singapore daily by boat trips.
Indeed it is a function of market dynamics. It is also factual that whilst 80% of Singaporean stay in HDB. It is not the case that 80% of Singaporean owned both HDB and private condo. In fact, only about 3 per cent of Housing and Development Board (HDB) flat owners own at least one private property, and nearly half of these have rented out their flats, Minister for National Development Desmond. So it works out to be less than 2% of the market. Yes, if the market demand ofvrental properties collapse, it will impact on BOTHnHDB and private condos.
Private condos or apartment, owners can at least rent out and earn back. HDB flats, one can't rent out as and when one likes so might not be able to recover money invested...
Is there any available data or statistics that demonstrate how older HDB flats have performed in terms of value depreciation over the years? Some real-life examples or case studies could help illustrate the points. 👣
Does not matter when to buy HDB , what price you buy is MOST important! Eg. $200,000 price over 50yrs lease, one yr depreciation is $4000 per year or $17 per month rental for hdb 4 bedrooms flat ! Is this affordable to any local buyers? Just don’t think about speculating speculation HDB flats, any ordinary will live affordably comfortably compared to $4M private residential property! Life is simple! 😂
You are right! Flats that r more than 30 years, the value may start to go down if general market conditions remain the same. However, now the demand for hdb resale is high so value of such flats is still going up. But, during a recession such flats will drop.more than other younger flats. Buyers need to know the risks.
@@kennySg101 Let’s assume you bought a new flat from HDB, you paid off your mortgage in 10 or 20 or 30 years, depending on your income and ability, then for the rest of your life, you live in your flat rent free. For those who keeps renting an apartment or a flat, as the years go by, with inflation, their rental will keep going up. So forever they will be paying for their rent. But as for a flat owner, once his mortgage is over, he will have a permanent roof, and it’s rent free.
You value yr flat based on market value. New one will continue to appreciate while older one esp those older than 30 yrs will not.appreciate as much in fact some will start to depreciate. Not sure about rent free part. U should sell b4 yr flat reaching 30. That is what he is trying to say.
The Gen-X uncles and aunties in late 40s and in 50s currently own 20+ to 40+ year old flats. In a decade time, most of these flats will cross the tipping point of lease decay. Who will buy from these Gen-X uncles if they want to sell?
HDB or some kind of big organization might buy back & rent it out to foreigner worker. Its a good business model for at least the rest of that lease period. Currently at about 5~7% returns on HDB rental with super low risk, it a big creamy cake waiting.
I am in Real Estate for more than 20 years , since 1999. Let me share this with you. 1st the gov, must rethink to stop all HDB resale. How many over 1M HDB transactions then will they wake up and stop it. HDB is still a public housing, look at the agreement with HDB, we are NOT owners. We are mention as Lessee and if you like to collect you “title” after fully paid, you will be in for a surprise. I let whoever read this is curious enough to find out. HDB is very closely “related” to politics that is my personal view. Do you feel that we the citizens are adequately consulted and debated before policies are put in place? From that answer you may discovered how “fluid” of our HDB pricing can be. Oh I have a client fully paid their private property and ask for the “title” , they are not given a hard copy because they used CPF.
HDB flats is a scam.... E.g. You pay 1/2 mil for a 4 room flat and exhaust your CPF funds (for retirement)... Then after a certain point, the value will stay to decay....
In fact, even if one buy a 94 years lease left unit, will still suffer from depreciation to nothinginess even for the kids who inherit the flat. Based on this logic, only buy a hdb for stay-in purposes.
You can try to sell when the flat reaches 60 years old of course, but how many people will even want to buy it? Once they buy they are dead in less than 10 years. A house that can only keep its value for 10 years is worthless. A flat should be sold by the time it reaches 30 years because after that, the demand for it will be low since whoever is taking over is going to be at a disadvantage in one or two decades. Those recent buyers who purchased older flats above 30 years old at over 1million are going to die cock standing. Assuming they took a 10 year or 20 year loan, by the time they finished paying, the flat will be nearly a piece of junk. Might as well rent.
Most people would have already KKK by the time the 99 years lease finish. The child/children would be working and can buy their own properties, unless they are permanent pikachu. Go to zero then then to zero lah. Tell us something new please 😴
Your point is about the limited cpf usage when the flat gets older and older, which is closely linked to the flat eventually being worth lesser and lesser. What have I missed?
Mr Loo, The point is we have an option to buy BTO and it will last us until we KKK. If one choose to buy super old resale, the buyer needs to understand the risks. Buyer discretion
Mr Loo, I clicked like. Currently, people really buy old flats at more than 1million leh. Also can calculate the depreciation rate. Clearly rich buyers of these old flats are still buying despite the issues.
@@1m65 now many people know at the 39years cpf rule. Actually everyone knows 99yrs is depreciating to nothing within two generations max but rich people still willing to pay more than a million for HDB and also 99yr leasehold private property for "investment". Guess believe in the greater fool (the next rich fomo buyer) theory?
Tks for ur sharing. Sure or nt - u will response ??? Anyway, u want to care & share - yt u did nt take another step FURTHER by finding out the rules for condo. which is leasehold99 & nt freehold Tks
How about VERS option for flats turn 70 or older? I thought Mr Loo going to mention this as well. In another 16 years there will be flats turning 70. Not sure anyone will go for it?
First n foremost, not knowing that there's a cpf rule that one cannot use their cpf funds to purchase a flat that has 30 yrs lease left is one's own total ignorance. Well, at least you now know... Second, buying a LEASEHOLD property be it a hdb OR a condo is, like it or not, still a leasehold. So to say that the price of the property will CRASH after the leasehold (99) is silly. Why silly? Simple. We shld expect it to go all the way down in value..... Just like our cars. Pay $170k for a Toyota Altis n being shocked that it's worthless after 10 years is absurd.... So like someone earlier commented, "don't ownself scare ownself". Just be prudent when buying your home... Don't buy a hdb LEASEHOLD for a million bucks and then hoping to sell it for 2 million. End of the day, the one and only unit you live in, is a HOME. Unless of course, you own more than one.... There are many other ways to invest
The truth is nobody knows , it is a political decision end of the day. Anyway your old hdb flats will be much better taken care of compared to a private property. Also can the en bloc sales last forever as well.
Mr loo is trying to scare everyone in HDB flats to sell their flats and create unstable market for HDB resales market and talks down the prices of HDB . Then he moved to malaysia austin height for his retirement with special visa in order to stay there more than 6 months.
Now when u buy hdb most important thing is the renovation as now it cost a big bomb! Most expensive I will rate is 1) kitchen (wall and floor tiles (cabinets and the top) 2) bath rooms (wall and floor tiles) Above 2 are the killers in pricing and it will be best to Reno these 3 parts of the house first Best is to find a fully renovated one and u need to like these 3 parts of the house Otherwise u need to find a Reno ID 1) the company must have their own workers (ask the iD for their work permit) 2) if they do have u must know they have a full service and not part of the service such as only carpentry A lot of iD will say it is their own workers but most are liars .. at least visit their factory and check on the equipment they have so u will know what they have in store for u
Selling the 60 years and below flat is passing on the problem to the new buyer which might had a shrinking pool of buyers in the future. I do see a market for those 30 years and below flat for people wanting to do legacy planning for their children. The beneficiary is not saddle with property as the decaying lease hdb would have very little residual value when the folks eventually passed on. For eg, the 30 years old flat would be available at a very affordable price since banks can’t finance it which take out people who needed a loan, only cash rich. Secondly the buyer could low ball the seller since it is for specific group of people doing legacy planning and for those having a min age of 65. As for private leasehold property, ura encourage urban renewal, there is this thing call en bloc which could be considered if the price is realistic for the developer. Sers option is not an option ready available for every hdb owners.
Re : WORRYING, worrying & continue worrying Bt, shld u be worrying when WW3 or a misfired ICBM will hit tis island ? Anyway, TQ for tis sharing & I / U /we Shld also goes to Utube to pay tribute & write a few words of Tks to JeffreySachs, a kind man, a man fighting for peace for mankind in tis universe. The best part - he’s jus a Professor, not a Pope or President. S’poreans, pls write a few words of thanks, ok ? Tks
If I am a buyer I prefer old HDB flat with the consideration of the below:
1) old flats quality better
2) old flats bigger
3) flat for me to stay not as an investment
4) I will work out the amount I paid divide by the balance of leasing; as long the per month around if I rent a unit, I go for it
5) old flats, convenience stores cheaper
6) neighbours generally better
7) new flats neighbours closed doors all the time
8) new flats, I talk, neighbours can hear
Yeah old HDB are better but after my HIP for my flat looks like the quality has down graded..
Is true old flats quality is better. They may be old, the new ones all prefabricated and always waterproofing or pipe issues
The no CPF rule for 69 year old flats have been around for the longest time. Assuming BTO owner bought when he is 35, he would have already migrated. His children would be 60+ years with own property. Anyone young person aged 21 owning a 69 year old flat is probably an inheritance. Don't worry about that. There will still be people buying 69 year old flats - private property downgraders. At age 60, use cash. No problem. By the time the lease ends, his time also runs out. Cheaper than renting. As for private flats, they will sell to developers for lease top up. The older the property, the higher the top up, the lower the value of the flat. But, if something in the master plan changes in that area for the better, the value might be preserved.
Don't ownself scare ownself. No problem one. Just be prudent when buying an old leasehold property.
Everyone know by now HDB is 99 years and will go to 0. If everyone sell, who buy ? Someone has to right ? The key is still total return meaning rental component for the remaining years plus the home value despite reducing. There is value of old flat if what you plan to stay for the remaining of your years which is shorter than the lease such as when one hit late 50s or early 60s. Better amenties, larger floor area, old friends, good locations, quiet env, rental income value etc. Is too solo just to look at remaining home value Only. Too short-sighted imo. You cannot bring high remaining value flat to your grave ....
Take Tiong Bahru very old walk up HDB for instance, it defies the trend.
most will be gone even before the lease expires. more importantly is not to outlive the lease and savings.
Thanks for the video. I bought my hdb w lease 70+ yr for 200k after grant. I stay for 16yrs and along the way rented out for 2yrs and collected 50k. The low cost hdb not only provided me very good space but also let me build up my cpf preparing for retirement. If I were to sell and repurchase a newer hdb, I do not foresee to retire anytime soon….
Great experience! Where were you staying when you rent out your HDB?
@@1m65 bought an investment condo , shift all there doesn’t like the location. Shift back the hdb. Hdb is beside mother in law so is a added factor staying put here.
I think you can forget about the 95 or 99 years lease, on average if it reach 50 to 60yrs, chances are SERS!
So far I would make use of my low housing cost to accumulate funds to FIRE. Some ppl is using housing as a way to FIRE. See what best for yourself. Ever since I joined 1M65 I managed to reviewed and redo my finance and felt in great position of my housing n cpf n cash funds 🙂
@@mikekong6379explain please n like my comment so I can read it ty 😊
Back in 1970, my father told me, we rent the flat from HDB, not buy nor own the flat. One day, will need to return back to gov. So I have such mindset since when then.
That’s rather foolish..
I sold my EM 2 years ago before all these 1mill price tags and was in the market for a 4rm flat, while looking at flats that were about 40+ to 50 years into their lease, I realised that mentally I was not willing to part with more than 350k, regardless of the condition / location / etc. That was when I decided to bite the bullet and buy a 4rm with 95 year lease left. It cost me double of what those very old 4rm flats cost but I feel better knowing that this has a bit more flexibility when i eventually retire in about 25 years time.
can u elobrate what u mean by parting with 350k ? Was it the cost of a old 4rm? And what how much was the 95 yr old HDB?
@@trentlim9964 I wasn’t willing to pay more than 350k. 😊 also all those older houses would need rewiring of the electrical as well as plumbing for peace of mind. So it really is not an economically viable choice in the end.
Are you looking to buy one such house? Or are you trying to sell yours?
@@trentlim9964 oh my eventual purchase was 735k. 2nd floor unit but 10 min stroll to a mrt station. Not perfect but works out
The holding period most likely will be extended. Don't throw away your asset based on this advice.
The panic will start when 1-2 cluster of hdb near the 99 and we will face with a ripple effect and we will start to question the amount we pay. To pay a lump sum rental. Or just rent and move about.(not much to move around on a tiny island)
"We intend to keep the value of these homes up, it will never go down. Because it will be renewed, the surroundings will improve, and as Singapore prospers, GDP goes up, the value of homes will go up."
Lee Kuan Yew
2013
The late Lee is pulling wool over our eyes .Even Goh Chok Tong also reinforced what Lee said..when lease us up, value will become zero😢😅
@@albertybob2286u mean a 99 yr old pte condo wont lose its value says at 80 yrs old??
LKY is speaking to pathway for LSL governing to come. HDB is a good way to entrap cash & use it for develop.
Absolutely! When d lease is left with 50 years, d deprecation will be increasing at an accelerating pace. If its owners occupied its worrying. But when you are renting it out, it's a different story. Cos there is ROI involved.
I read with amuse when some comments say that HDB is for living and not an investment to make profit. Fact: That idea was sold to past generations and it has done well to push our economy forward steadily but GOV has since reverse to idea, knowing that the decays are setting in. Hence they try SERS VERS. giving hope to older flat owners. BUT there is only how much this will work. Because there are no guarantee that your flats will be selected for it. worse is what happen if your flat already cross the 60 year mark, the GOV is not silly to buy back from you at high price, you end up losing both ways, having to lost an your sale and top up even more for a replacement flat.
Same as condo enbloc mah, not all condos will get enbloc. And with leasehold condos running out of lease years, developers may not want to pay a high price to bail these owners out.
Don't worry too much, no SERS no VERS there can be mini-SERS mini-VERS or Sub-SERS, Sub-VERS. Like new waterproofing, new paintworks, new lift, extra fire protection and comes with a short lease extension with a PRICE tag of then market rate. Of course those who can't pay can apply for a grant.
Same same cooking method.
As long as it's cheaper than rental, any price is right for many buyers.
Hi Loo. for private flats?condos. It can already enbloc by them. As for HDB flats most of owners already gone before the lease of 70 years. The goverments will adjust the rules. Nothings are stagnant
We are at 5.92m population. 6.5m come 2030 looks realistic. Bala’s curve will have disparity against an increasing demand if supply does not sufficiently catch up
Not all people buy HDB for investment, some really buy for stay. Old flat with good location and condition can also fetch good rental. Dun think too much, many condo also 99 yrs and if everyone aim to sell the flat with 60yrs lease, who buy? A car only last 10 yrs and people are willing to pay soo much for the COE........
Speaking from experience, can’t really earn money from rental. The most that it can do is to cover your costs of ownership.
I’m curious now… how many buy HDB for investment? I definitely didn’t think of it that way.
Buying an old hdb flat and renting it out is not a good option. Most tenants' lousy and irresponsible tenants will cause serious damage to your flats, etc. Not worth it.
Buying an old hdb flat and renting it out is not a good option. Most tenants' lousy and irresponsible tenants will cause serious damage to your flats, etc. Not worth it.
@@choonhockong8215
I have been renting out my HDB for 25yrs. I do accept wear & tear, things do spoil, plus I have to put in some upkeep cost. I do it as a business, after x numbers of years at least a new coat of paint right?
When I bought my HDB, I didn't ever think of renting it out. In my mind its a home. I bought old HDB because at that time its Gov first time giving out grant that near parents HDB for new couple. But things changes when I divorce + job changes. I have to travel work. That's when I start to rent it out.
This whole HDB pricing is a mess. When the govt start selling HDB at market prices to its citizens, they should continue lky policy of replacing another HDB after like 90 years old. I am worry for the children of SG but there is nothing much we can do when majority are not supportive.
Therefore very average income like us should prioritise "a home to stay" mindset, rather than a must to invest in your hdb flat, price crash and value is NA and none of our concern. Stay, wait for SER for new home, choose according to your affordability, if you can top up for bigger or more rooms. The above average group will have the luxury to own private properties, rent, buy and sell either private or hdb at the right time right price.
This is why HDB should be for own stay and price shouldn’t be so expensive. I wouldn’t want to pay $1M if the value goes to zero eventually.
Boycott buying 1m government owned leasehold hdb flat. At the end of the 99 years, the government takes back our flats.
Your thinking sounds reasonably good n correct n'll say only fools will do that.
I think those ppl that pay more than 1mil for HDB is to disturb the sg economy.. not a good sign..
Is like paying monthly rent of $6000 to buy a $1m flat. Not worth
Now the CPF Minimum lease period of 30 years have lowered to 20 years.
The analysis seems to ignore that a HDB flat can be rented for about $3k per month. How can an asset have zero value and when it can generate $3k a month in passive income? If you hold a 70 year old flat to the 99 year expiry, you collect nearly $1 mil ($3k *12 * 30) in rental income.
Where will you stay if you rent it out?
There are many ways this can be monetized. For example for those who are no longer working, they can do rental arbitrage. The retired person could rent out his HDB flat in SG for $3k and rent a much cheaper apartment to stay in JB. The rental difference could then fund a comfortable retirement in JB.
agreed, for a 35 years old , consider 30 years of lease 3000*12*30, buying a unit with 60 years remaining lease is still cheaper than an overall 30 years of rental till retirement, while leasing it out for the remaining 30 years, the ROI is still more than selling it on the market.
I have rent out my HDB for more then 25 years. Before my retirement I travel work. I estimated I have collected in rent more then the current sale price of my HDB. Note last time rent is not like now.
7 years back I step into full retirement in Vietnam. Previously was staying in JB for about 4 years and working in Singapore. About 10 years back I do plan to sell my HDB and get a newer one with longer lease. But I stay put because at that rent is not high & losing rental time to change HDB doesn't make sense. As now my HDB is 40+ years old, I plan to hold it till lease finished or till my death. The major reason is rental now is above $3k for 4 room HDB. I don't see rental will decrease in future 10years. Myself is contemplating SG Gov will still do something when large amount of HDB going to end their lease & there are still poor surviving owners.
@@aurvandil1688wah the 30 days really a good deal for Singaporean to hike Malaysian food and property price up..
Law can and will change. If it involves majority of the population, the government will have to help properties to be fair to them. Property is probably one of the most important assets for people. Taking properties away without compensation would be a but harsh for owners who spend their whole live paying fir it and to become worthless they reach an old age.
By the time comes, this is what I think.
1. Gov will give a "cheap" lease extension for short period. A estimated period for affected owners to pass on. Cheap by the market rate at that time.
2. Relocate affected owners into rental flats.
3. Relocate affected owners into care-centers.
Either way affected owners will not feel good.
No lease extension
Simple as abc 0 cost . The land is automatically belongs to the government lol !!
For less than 80 years lease, You may use the full CPF amount if the remaining lease can cover the youngest buyer until the age of 95 and a prorated amount if the remaining lease does no.
Dear Mr loo, the rising prices of hdb resale prices is partly due to the the aggressive pushing by property agents.
Totally agree. Never trust them.
Thank you for reminders.
Thank you Loo.
Sell to me cheap when your HDB is less than 60-yrs old
It would be insightful to hear from anyone who have had experiences with HDB flats that have reached the 60-year mark and how they approached the situation. What are the resell prices at their block?🏡
Petition for en bloc with all your neighbours
How about condo leasehold reaching 50 - 60 years which also have same decay and no one talk about it. Should buyer buy such old condo at high price with lease decay? Well, sellers can wit for collective sale if no buyers for old condo.
85% Singaporeans live in HDB. When these HDB flats are getting old, Singapore will take care of the residents by moderating the drastic depreciation of the flat values. The lease tenure is 90 years, but the condition of the flats my be still very good to have a zero value at the end of the lease.
Hmm, if bal lease is 40-30 years, it will be harder to sell the flat on the open market. No one would buy considered the depreciating value of the flat. Rather, sell back the remaining lease to HDB.
Pte properties can go en bloc sale with a new lease if life if approved. HDB can't!
OMG, so many will be effected. No money and home values going down after whole of struggles.
Most of us wont be here when the lease ends. Even our kids are unlikely to be if we bought a new flat when we were young.Am surprised you didnt know abt the CPF rules. It has been around a very long time. Same applies to private property that is Leasehold too.
Forget about HDB if you consider using it for investment. The onus of HDB is allowing Singaporean to own a house called home. Based on the current monthly rental of a 4 room HDB flat at an average of SGD 3000.00. It work out to about 1.26 million on a 35 years lease (assuming living till age 70 and purchasing the unit at age 35). The flat will be at zero value after the 99 year mark but it provide a home for at least 1.5 to 2 generation and based on a 99 year rental at 3k per month works out to SGD 3,564,000.00. Therefore a new 4 room HDB flat at the current market rate between SGD 600,000.00 and 700,000.00 is only one fifth of the 99 years rental. Of course, if you are selling it before the the 69 year mark, you may gain back some money provided that you do not require to purchase another house.
FYI, I have been renting out my 4rm HDB for 25 years. Rental isn't that great when I started. Its SG$600~700 a month for the whole 4rm HDB for many years. Then slow climb till $2800 for a year only. There after clashes down to $2200 for 4~5 years.
So looking at your figure of $3.540 millions if renting out $3k monthly. Its should be at least 50% less about $1.75 millions at max. Then come deductible expenses like mortgage, interest rate, HDB upfront cost, up keeping cost of HDB, rental income tax (average half month per year), rental loss cause change of tenants or reduce number of tenants, cleaning, items removable, replace items, unpaid rent, unpaid utilities, etc. The figure come much less.
For me willing to downgrade to smaller flat when the flat is 60 years old provide the hdb price is at least 2.5 times purchase price .. Meantime can rent out .. still profit
Hdb last 50 yrs appreciatio compound at 4% hence price double in 18yrs, rental yield at 4.5% hence earning double in 16 yrs. 77 yrs old hdb Depreciation at 4.5%, 8.5%(=apprec+rent) at 87 yrs old. Market Drive had 60 yr lease landed hdb, at 50 yrs old with balance 10 yrs lease been en-bloc. Market will react base on buyers budget, demand n supply.
I think you may not be able to refresh your HDB lease as you have a Malaysian property.
"where do you stay?" is correct in SG land instead of "where do you live" because our HDB is temporary just as the word "stay".
Generally, if hdb flat reach 60 years or beyond, chances are SERS, so the 99 years lease not that i know of any hdb flat reached.
Mr Loo, your video has revealed this fact to all of us. Now who is going to buy your flat in order for you to refresh your lease? So hdb is really for stay in and not for investments.
My flat still quick ok in Aging. How I know, I might sell early….😅
Make the HDB value down before handover
Get well soon!
How much in CPF funds does a 30
year old..,40..50 have?
How much will bank lent if lease is 59 or less
Of course salary also counts is buyer
HDB is for own staying purely. Dun go against Gov's intention. Or there will always be similar videos like this lol.
Just buy at JB, bungalow for less than SGD 300k
Not sure my perspective is right. If I don't buy a flat today, I will need to rent. Then I need to pay mkt rate rent which is abt $3k or more depending on where n what I rent. Assuming I need the place for v long term stay eg. 25 years or so, the total amt of rent is almost the price of any HDB flat today. I worry for my child too. But the cost of living incl. salary I earned as a fresh grad back many years ago and my child is different. The price of houses will move accordingly.
House prices should normally go up in value over its life …. The 99 years lease is unfair when prices starts to drop at 60 years because the landed property will just keep increasing over time … I think the govt should have a policy to buy back all hdb at the age of 60 years at market value to redevelop to new HDB for resell with 99 years lease again so the poor low income owner does not face this situation in their life …
i think it is safer to add 5/10 years for MOP. because your future buyers will consider their exit strategy as well. govt might increase the 80 years old benchmark to 85 given that singaporean life expectancy has increased
Get yourself elected, become a Housing Minister and solve the problems. Don't do it here.
Good discussion! We should not think of leasehold flats as an investment blindly, but to try to understand the decaying lease effect.
What about HDB owners who also have another condo ? The truth is HDB give far better rental yield compared to private condo. Typically at least 2% to 3% above private condo yield and yield of HDB also above CPF rates! So owners who have HDB and private condos do not need to sell HDB even if the HDB has 50, 40, 30 years remaining lease. Because with a 7% rental yield on HDB, the owner can get back its initial capital investment every 10 years. So if l am such owner, l will keep my HDB, continuously rent the unit until HDB land lease expire subject to HDB not taking over the land and offer SER. If so, then my HDB got a new lease for another 99 years !!
If everyone rent out, there will be increase in supply, so rent wouldn't drop? Unless we all get ready for 10 mil mainly foreigner population. Or else demand for rental would be less than supply and you wouldn't be able to rent high. Foreigners are not stupid. Some of my colleagues have started living in batam and commute to Singapore daily by boat trips.
Indeed it is a function of market dynamics. It is also factual that whilst 80% of Singaporean stay in HDB. It is not the case that 80% of Singaporean owned both HDB and private condo. In fact, only about 3 per cent of Housing and Development Board (HDB) flat owners own at least one private property, and nearly half of these have rented out their flats, Minister for National Development Desmond. So it works out to be less than 2% of the market. Yes, if the market demand ofvrental properties collapse, it will impact on BOTHnHDB and private condos.
Private condos or apartment, owners can at least rent out and earn back. HDB flats, one can't rent out as and when one likes so might not be able to recover money invested...
Think is 20 years and not 30 years
Is there any available data or statistics that demonstrate how older HDB flats have performed in terms of value depreciation over the years? Some real-life examples or case studies could help illustrate the points. 👣
Does not matter when to buy HDB , what price you buy is MOST important! Eg. $200,000 price over 50yrs lease, one yr depreciation is $4000 per year or $17 per month rental for hdb 4 bedrooms flat ! Is this affordable to any local buyers? Just don’t think about speculating speculation HDB flats, any ordinary will live affordably comfortably compared to $4M private residential property! Life is simple! 😂
If you sell it at 55 or 59 years, who is going to buy? 🤔
Have, those don't know well and buy or simply buy and live and know it will goes downhill in terms or value.
All property with 99 yrs lease will become worthless at tail end...not only hdb...is this uncle ok?
You are right! Flats that r more than 30 years, the value may start to go down if general market conditions remain the same. However, now the demand for hdb resale is high so value of such flats is still going up. But, during a recession such flats will drop.more than other younger flats. Buyers need to know the risks.
You’re wrong. The older the flat is, its value increases. Once you paid up your mortgage, about 20 years or so, the rest of your life is rent free.
@@bell-xk5dd Can't understand your logic?
@@kennySg101
Let’s assume you bought a new flat from HDB, you paid off your mortgage in 10 or 20 or 30 years, depending on your income and ability, then for the rest of your life, you live in your flat rent free.
For those who keeps renting an apartment or a flat, as the years go by, with inflation, their rental will keep going up. So forever they will be paying for their rent. But as for a flat owner, once his mortgage is over, he will have a permanent roof, and it’s rent free.
You value yr flat based on market value. New one will continue to appreciate while older one esp those older than 30 yrs will not.appreciate as much in fact some will start to depreciate. Not sure about rent free part. U should sell b4 yr flat reaching 30. That is what he is trying to say.
The Gen-X uncles and aunties in late 40s and in 50s currently own 20+ to 40+ year old flats. In a decade time, most of these flats will cross the tipping point of lease decay. Who will buy from these Gen-X uncles if they want to sell?
HDB or some kind of big organization might buy back & rent it out to foreigner worker. Its a good business model for at least the rest of that lease period. Currently at about 5~7% returns on HDB rental with super low risk, it a big creamy cake waiting.
Buying n then selling to same race….please…there’s a race-ratio thingy per flat….Chinese owner cannot sell to other race-buyer
Hdb flat is supported by many things. It is not as easy as you said.
I am in Real Estate for more than 20 years , since 1999. Let me share this with you. 1st the gov, must rethink to stop all HDB resale. How many over 1M HDB transactions then will they wake up and stop it. HDB is still a public housing, look at the agreement with HDB, we are NOT owners. We are mention as Lessee and if you like to collect you “title” after fully paid, you will be in for a surprise. I let whoever read this is curious enough to find out.
HDB is very closely “related” to politics that is my personal view. Do you feel that we the citizens are adequately consulted and debated before policies are put in place? From that answer you may discovered how “fluid” of our HDB pricing can be. Oh I have a client fully paid their private property and ask for the “title” , they are not given a hard copy because they used CPF.
HDB flats is a scam.... E.g. You pay 1/2 mil for a 4 room flat and exhaust your CPF funds (for retirement)... Then after a certain point, the value will stay to decay....
Sleep well and awake -up start thinking how to pay bills...hehe.🙏
Mr Loo, Hope you recover asap.🙏
In fact, even if one buy a 94 years lease left unit, will still suffer from depreciation to nothinginess even for the kids who inherit the flat. Based on this logic, only buy a hdb for stay-in purposes.
You can try to sell when the flat reaches 60 years old of course, but how many people will even want to buy it? Once they buy they are dead in less than 10 years. A house that can only keep its value for 10 years is worthless. A flat should be sold by the time it reaches 30 years because after that, the demand for it will be low since whoever is taking over is going to be at a disadvantage in one or two decades. Those recent buyers who purchased older flats above 30 years old at over 1million are going to die cock standing. Assuming they took a 10 year or 20 year loan, by the time they finished paying, the flat will be nearly a piece of junk. Might as well rent.
If leasehold ends, still need to pay back CPF loan right?
You should have paid in full before the lease expire. You won't get back any cash or CPF because you can't sell a flat with 0 lease balance.
Most people would have already KKK by the time the 99 years lease finish. The child/children would be working and can buy their own properties, unless they are permanent pikachu. Go to zero then then to zero lah. Tell us something new please 😴
I don’t think you have watched my video….completely missed my point
Your point is about the limited cpf usage when the flat gets older and older, which is closely linked to the flat eventually being worth lesser and lesser. What have I missed?
Mr Loo, The point is we have an option to buy BTO and it will last us until we KKK. If one choose to buy super old resale, the buyer needs to understand the risks. Buyer discretion
Drink more water and Speedy Recovery.
Take care, Mr Loo! U do look unwell. Rest more and don’t forget to do your ART 😅
Mr Loo, I clicked like. Currently, people really buy old flats at more than 1million leh. Also can calculate the depreciation rate. Clearly rich buyers of these old flats are still buying despite the issues.
Or they don’t know this obscure rule….
@@1m65 now many people know at the 39years cpf rule. Actually everyone knows 99yrs is depreciating to nothing within two generations max but rich people still willing to pay more than a million for HDB and also 99yr leasehold private property for "investment". Guess believe in the greater fool (the next rich fomo buyer) theory?
Mr Lu, what did you do to grow your hairs?
I did a hair transplantation a year ago!
Tks for ur sharing.
Sure or nt - u will response ???
Anyway, u want to care & share - yt u did nt take another step FURTHER by finding out the rules for condo.
which is leasehold99 & nt freehold
Tks
How about VERS option for flats turn 70 or older? I thought Mr Loo going to mention this as well. In another 16 years there will be flats turning 70. Not sure anyone will go for it?
Those buying millions for a unit..gd for them.
First n foremost, not knowing that there's a cpf rule that one cannot use their cpf funds to purchase a flat that has 30 yrs lease left is one's own total ignorance. Well, at least you now know... Second, buying a LEASEHOLD property be it a hdb OR a condo is, like it or not, still a leasehold. So to say that the price of the property will CRASH after the leasehold (99) is silly. Why silly? Simple. We shld expect it to go all the way down in value..... Just like our cars. Pay $170k for a Toyota Altis n being shocked that it's worthless after 10 years is absurd.... So like someone earlier commented, "don't ownself scare ownself". Just be prudent when buying your home... Don't buy a hdb LEASEHOLD for a million bucks and then hoping to sell it for 2 million. End of the day, the one and only unit you live in, is a HOME. Unless of course, you own more than one.... There are many other ways to invest
99 years or when the cows come home .
The truth is nobody knows , it is a political decision end of the day. Anyway your old hdb flats will be much better taken care of compared to a private property. Also can the en bloc sales last forever as well.
If everyone is selling at age 60 year old, who’s buying? 😂
That’s my point too!
Who cares if it declines, best way to know is to find out
Wow. You are vert daring to put up such a title.
Mr loo is trying to scare everyone in HDB flats to sell their flats and create unstable market for HDB resales market and talks down the prices of HDB . Then he moved to malaysia austin height for his retirement with special visa in order to stay there more than 6 months.
Poor will become poorer? All Doom?
Now when u buy hdb most important thing is the renovation as now it cost a big bomb!
Most expensive I will rate is
1) kitchen (wall and floor tiles (cabinets and the top)
2) bath rooms (wall and floor tiles)
Above 2 are the killers in pricing and it will be best to Reno these 3 parts of the house first
Best is to find a fully renovated one and u need to like these 3 parts of the house
Otherwise u need to find a Reno ID
1) the company must have their own workers (ask the iD for their work permit)
2) if they do have u must know they have a full service and not part of the service such as only carpentry
A lot of iD will say it is their own workers but most are liars .. at least visit their factory and check on the equipment they have so u will know what they have in store for u
Selling the 60 years and below flat is passing on the problem to the new buyer which might had a shrinking pool of buyers in the future. I do see a market for those 30 years and below flat for people wanting to do legacy planning for their children. The beneficiary is not saddle with property as the decaying lease hdb would have very little residual value when the folks eventually passed on. For eg, the 30 years old flat would be available at a very affordable price since banks can’t finance it which take out people who needed a loan, only cash rich. Secondly the buyer could low ball the seller since it is for specific group of people doing legacy planning and for those having a min age of 65. As for private leasehold property, ura encourage urban renewal, there is this thing call en bloc which could be considered if the price is realistic for the developer. Sers option is not an option ready available for every hdb owners.
Prepare yr work first
O
9
👍👍👍👍👍
H mr loo Abu Dhabi Jennifer here
Mr Loo, one day you will have hair than your son.
Cheap Cheap
Loo, what happens when china attack taiwan and usa warship in changi attack china...if china sinks singapore then no more 60, 70 ... all zero value
Ha ha ha ha
Re : WORRYING, worrying & continue worrying
Bt, shld u be worrying when WW3 or a misfired ICBM will hit tis island ?
Anyway, TQ for tis sharing & I / U /we Shld also goes to Utube to pay tribute & write a few words of Tks to JeffreySachs, a kind man, a man fighting for peace for mankind in tis universe.
The best part - he’s jus a Professor, not a Pope or President.
S’poreans, pls write a few words of thanks, ok ?
Tks