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Friday, March 24, 2017

Daily Lessons from Life 24 March 2017 - Properties to live well getting old?

"Not all older flats eligible for en bloc: Lawrence Wong CAN 24 Mar 2017

SINGAPORE: Minister for National Development Lawrence Wong said on Friday (Mar 24) that he was "concerned" over the idea that some home buyers in Singapore were forking out high prices for older public flats expecting to benefit from the Selective En bloc Redevelopment Scheme (SERS).

Responding to an article by Chinese daily Lianhe Zaobao highlighting high prices of several short-lease Housing Development Board (HDB) flats in the resale market, the minister wrote in a blog post: "SERS, as the name implies, is on a selective basis. It is only offered to HDB blocks located in sites with high redevelopment potential. These are typically sites where the land has not been well utilised. It is also subject to the availability of suitable replacement sites for residents and the Government’s financial resources," he said.

"So please do not assume that all old HDB flats will be automatically eligible for SERS."

Mr Wong said only four per cent of HDB flats have been identified for SERS since it was launched in 1995 and authorities continue to maintain strict selection criteria for the scheme.

He also pointed out that when the leases for HDB flats run out, they have to be returned to the state eventually and that as flats near the end of their lease periods, their prices come down correspondingly.

"Buyers need to do their due diligence and be realistic when buying flats with short leases. This is especially important for young couples, who have to plan for a much longer future."

The National Development Minister encouraged first-time home-buyers to choose resale flats with sufficiently long leases to cover their needs.

As a guide, flats with leases that cover homeowners until they are 95 years old would give most people peace of mind until their golden years, he said, adding: "Over time, we can expect a more diverse HDB resale market, with flats of varying leases to cater to the different life-cycle needs of Singaporeans.""

It is the RIGHT WARNING to sound by Minister Wong.

Public housing has to be to provide roofs over the heads for most citizens to raise their 3-kid family encouraged by the government. It is never meant to be an investment property though due to whatever reason it has become an income for those elderly who rented out a room or two of their fully paid bought decades ago at much lower price flat to some foreign workers.

There r smarter PRs n new citizens who bought HDB flats fr the resales market to rent out or to flip as "hot money" from them lifted the market. This was fanned by the locals who then got caught as they didn't want to lose out on the windfall gains to be had!!

It is imperative that young couples starting out get their affordable HDB flats that can cover their longer term needs instead of buying the high price shortened lease public flat.

The warning has been given. Do treasure it. Keep repeating the message until no one can hv the excuses that the government never warn him or her!!

As for private properties, it must follow "free market" forces of "as high a price as the market can bear, leveraged allowed or not!!". This means when it clashes no government is supposed to intervene too! Sineth8ng the government failed to do each time the boom-n-bust cycle supposed to come along!

As for the elderly who owned HDB flats, sell it if u can make 6-10x. Just remember how to manage the windfall for the next 20-30 years till it end of life healthily.

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