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Is HDB a prepaid flat rental or an asset?

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Is HDB a prepaid flat rental or an asset?

Postby PNGMK » Sun, 26 Aug 2018 9:34 am

For those of you not following this huge political bun fight the TOC has a pretty good summary.

https://www.theonlinecitizen.com/2018/0 ... pap-story/
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Re: Is HDB a prepaid flat rental or an asset?

Postby Strong Eagle » Sun, 26 Aug 2018 11:09 am

Complicated question. How much would the HDB value increase if the land value, theoretically excluded from asset value since it is leased, were to be included in the asset price?

What would be the net effect if the government were to convert the lease into an undivided property interest for all HDB owners in the building sitting on the property?

What does the gahmen think it is achieving by acting as a 99 year lessor instead of outright granting the land to purchasers, except to retain ultimate redevelopment control?

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Re: Is HDB a prepaid flat rental or an asset?

Postby PNGMK » Sun, 26 Aug 2018 1:25 pm

For your last point are you familiar with the Great PAP Land Seizures Post independence?

Prior to independence most land was privately owned. Once the great land seizure was done most was gahmen owned.

The land was compulsorily acquired at artificially low prices.

I don't understand any of the logic LKY or the PAP have presented to explain this or why HDB cannot be privatised.
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Re: Is HDB a prepaid flat rental or an asset?

Postby Strong Eagle » Mon, 27 Aug 2018 6:07 am

Yes, the land "grab" is an interesting thing, and perhaps a necessary evil. Land ownership was concentrated in the hands of a few. The number of people living on the street was large. Housing for all was a laudable goal at the time.

But now? Why does the gahmen continue to own more than 75 percent of all the land? Why has the gahmen adopted leasehold policies that effectively make a paid for HDB home (or a private residence for that matter, unless it can be sold en bloc), worthless? Why is the premium to renew a lease so high? With government ownership of land at such a large percentage, it's realistic to ask whether its the private market that sets land prices and the SLA is only following suit, or whether it's the SLA that's really setting the prices through its land sales and lease buybacks.

A couple of interesting links on the subject:

https://www.99.co/blog/singapore/leaseh ... -99-years/

https://www.99.co/blog/singapore/are-hd ... ime-bombs/

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Re: Is HDB a prepaid flat rental or an asset?

Postby GSM8 » Mon, 27 Aug 2018 9:44 am

Societies are not sustainable when wealth is passed down in perpetuity. Many other countries have death tax/ estate tax etc. I suppose Singapore achieves a similar effect with 99-year property leases gnawing away through a lifetime at the split between personal and gahmen wealth. Would the people bleating about 99-year leases find it more palatable if the gahmen took away 40% of inheritance after a person's death (resulting in them having to possibly sell the inherited property to pay tax) like many other countries do?

The original premise was probably that to make things equal, for every Singaporean family is expected to buy their own house - if they inherit it they should factor in that it's a depreciated asset, similarly if they buy on resale they should factor in they are purchasing an already depreciated asset. Same for private and public. Gahmen could well have made 100% of the land leasehold but I recall reading somewhere that the freehold properties were held by the sultan of johor and that status was kept

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Re: Is HDB a prepaid flat rental or an asset?

Postby Barnsley » Mon, 27 Aug 2018 10:00 am

GSM8 wrote:Societies are not sustainable when wealth is passed down in perpetuity.Many other countries have death tax/ estate tax etc. I suppose Singapore achieves a similar effect with 99-year property leases gnawing away through a lifetime at the split between personal and gahmen wealth. Would the people bleating about 99-year leases find it more palatable if the gahmen took away 40% of inheritance after a person's death (resulting in them having to possibly sell the inherited property to pay tax) like many other countries do?


Entrenched generational wealth is the elephant in the room for all societies as you say. Death/Estate taxes should be 100%!
Life is all about doing it for yourself no?
Folk with wealthy parents already have a massive leg up in life, if they haven't the capability to build their own life off the back of that then that's unfortunate for them.
Governments that actually have some aspiration for fairness bang on about social mobility , but entrenched wealth needs to be addressed , what goes up must also have opportunity to come down.

With respect to the 99 year leases , the policy makes sense to me in a land starved country , however how those properties were marketed seems counter to the reality.
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Re: Is HDB a prepaid flat rental or an asset?

Postby earthfriendly » Tue, 28 Aug 2018 12:16 am

Entrenched generational wealth limits social mobility making it a less egalitarian and just society. However, it is in the human nature, at least in a capitalistic model, to have this desire to work hard and accumulate wealth and pass it on to your children. Cause you care about them. How can we strike a balance between self-interest and group interest? One way is to encourage the wealthy to practice philanthropic, a form of wealth distribution. It is already widely practiced in USA but still not enough to address the wealth divide, which is only getting worse.

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Re: Is HDB a prepaid flat rental or an asset?

Postby earthfriendly » Tue, 28 Aug 2018 12:33 am

And if I may contradict myself, ironically, the egalitarian in me does not quite agree with this concept of the philanthropy of the wealthy either. That the less fortune needs to hang around pining for the charity of the moneyed class. There is something inherently wrong with this picture. It almost reminds me of panhandling. At the end of the day, we are all better off if we create an environment of opportunities for everyone who is willing to work. A huge wealth gap is destabilising for any country and it makes it less safe for everyone, including the wealthy who will get the blame.

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Re: Is HDB a prepaid flat rental or an asset?

Postby Barnsley » Tue, 28 Aug 2018 11:31 am

earthfriendly wrote:And if I may contradict myself, ironically, the egalitarian in me does not quite agree with this concept of the philanthropy of the wealthy either. That the less fortune needs to hang around pining for the charity of the moneyed class. There is something inherently wrong with this picture. It almost reminds me of panhandling. At the end of the day, we are all better off if we create an environment of opportunities for everyone who is willing to work. A huge wealth gap is destabilising for any country and it makes it less safe for everyone, including the wealthy who will get the blame.


It is about opportunity , and to keep people motivated to keep trying if things don't work out first time.

There is nothing wrong with a leg up from parents , however that should be it , you should have to make it on your own after that.
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Re: Is HDB a prepaid flat rental or an asset?

Postby PNGMK » Tue, 28 Aug 2018 11:55 am

I am astonished at how well Wong and PAP Ltd are at putting their feet in their mouth on this one. They continue to astonish with their clear lack of ignorance or is it wilful attempts to mislead people?

A 99 year leashold on a building is radically different to a 99 year strate leasehold on a building and land parcel.
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Re: Is HDB a prepaid flat rental or an asset?

Postby Barnsley » Tue, 28 Aug 2018 3:09 pm

PNGMK wrote:I am astonished at how well Wong and PAP Ltd are at putting their feet in their mouth on this one. They continue to astonish with their clear lack of ignorance or is it wilful attempts to mislead people?

A 99 year leashold on a building is radically different to a 99 year strate leasehold on a building and land parcel.


Back on topic :D

It is indeed very strange how the Government is handling this topic.
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Re: Is HDB a prepaid flat rental or an asset?

Postby PNGMK » Tue, 28 Aug 2018 4:06 pm

Yeah waiting for that arrogant twat CCS to butt in. Man he has such an ugly visage and arrogant face.
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Re: Is HDB a prepaid flat rental or an asset?

Postby PNGMK » Tue, 28 Aug 2018 4:30 pm

Actually HDB "lease" is more like a 99 year certificate of occupancy (COO) or Certfiicate of entitlement to reside (COER). The terms and conditions are almost similar as a COE. There are serious restrictions on how you can use a HDB and the most grevious is that you need the permissions of HDB to even reside there.
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Re: Is HDB a prepaid flat rental or an asset?

Postby Barnsley » Tue, 28 Aug 2018 4:41 pm

PNGMK wrote:Actually HDB "lease" is more like a 99 year certificate of occupancy (COO) or Certfiicate of entitlement to reside (COER). The terms and conditions are almost similar as a COE. There are serious restrictions on how you can use a HDB and the most grevious is that you need the permissions of HDB to even reside there.


It looks like they have been surprised by the current discussions and have been struggling to put anything together to placate the masses.

Old quotes and footage of Governments of yesteryear saying that property prices will rise and rise havent helped them. When as you say the HDB lease looks like its very similar to how COE works for cars.

99 years was a long way off I guess when HDB started building homes.
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Re: Is HDB a prepaid flat rental or an asset?

Postby PNGMK » Wed, 29 Aug 2018 3:28 pm

IT never helped that LKY kept disparagingly comparing HDB to council flats in the UK (which many councils have since sold off to their residents who are now doing very well).
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