6/28/2006
myth 28
'Singaporeans are asset rich'
Some are, and some are very rich. But for those living in 99 year leasehold, just don't be happy too early. The first batch of HDB flats should be about 40 years old by now. This means that in another 60 years they will become worthless. How's that for being asset rich?
And actually the dwindling asset value will come sooner, maybe in 10 or 20 years time when the value of the asset is going one way, down, down and down and then out. And no matter how much upgrading and money put in, once the lease is nearing the end of its shelf life, it is like a man running out of time. All his properties and assets would mean nothing.
Time out, game over.
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8 comments:
Singaporeans are really stupid and short-sighted. I have warned people not to buy resale flat because of the shorter lease and higher price tag. Instead, many I know just plunge head on without giving it further thoughts.
Sadly, many will be stuck with declining asset value as their lease edge towards expiry.
where got worthless ? gahmen will buy back one lah. dun worry, gahmen very good, will take care of you one.
there have been a few cases of buying back when the land is needed by private developer and can fetch a higher price. win win win for all parties. the lucky few.
i have heard of a few blocks in buona vista that were acquired enbloc for private development. unfortunately in the midst of these blocks, two blocks were left standing. and those residents affected were really pissed off.
it will be good if it is a national policy to buy back and offer new flats with a new 99 year lease to the owners. now that will be really something, better than lift upgrading.
if you think gabramen is gonna buy back all, then it is wishful thinking on your part. this calculative gabramen will only buy back if they can sell to private developer at a higher price than the compensations paid in total to peasants.
take the holland (buona vista) case, everything has to go (including the public pool, area office, childcare, kindergarten etc). the reason 2 blks will be left standing is because gabrament will loose money compensating peasants from the 2 blks. no prize for guessing that the replacement plot is 1/2 the size of the original.
think you are right. the two point block occuppy very small footprint and would not give much in return. poor guys seeing all the their neighbours happily going to enbloc and they were left high and dry, standing.
and their neighbours that are going to spring up will be brand new condos. but maybe it will help to appreciate their values. but the catch is that their lease is running out quite fast.
here's a hint to all flat hunter, always go for blks < 12 floors. your chances of enbloc is much higher because gabramen pay less to acquire the land under your blk than a point blk....and chose a popular estate to counter the declining asset value in the coming yrs. you are given 2 bites of the cherry, take advantage of it.
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