Screenshot of Lee Hsien Loong from Youtube

At his National Day Rally speech on Sunday (Aug 19), Prime Minister Lee Hsien Loong confirmed that HDB housing is a depreciating asset. The millionaire minister reasoned that confiscating HDB housing by the end of lease is “being fair” to future generations. Omitting the fact that younger generations of Singaporeans will not be able to inherit property wealth like himself, Lee Hsien Loong said everyone will have to buy a 30-year mortgage HDB from the government to be fair to those who cannot afford a property:

“There is one fundamental reason why. We need to be fair to future generations … After the lease ends, the flat comes back to the state, the Government redevelops the land, and builds new flats for future generations. This is the only way to recycle the land, to ensure all our descendants can buy new BTO (Build-To-Order) flats of their own. If instead the Government sold you the flat on freehold … Sooner or later we would run out of land to build new flats. The owners would pass down the flat to some of their descendants … Those not lucky enough to inherit a property would get nothing. Our society would be split into property owners and those who cannot afford a property. That would be most unequal, and socially divisive.”

Lee Hsien Loong then added that the HDB buildings will be structurally unsound after 99 years, and that maintenance costs will be “very high”:

“There is also a practical reason why we can’t extend the leases. If you look at older buildings today, some look rather worn, even before they are 50 years old. After a century, I am sure the mechanical and electrical systems will be obsolete. The concrete will have deteriorated in our tropical climate. And even if we could fix all that, the recurrent maintenance costs would be very high. So it is better to let the leases expire, take the blocks back, demolish, rebuild afresh … newer, better, more liveable flats, blocks, townships – more suited to what our grandchildren and great-grandchildren will want to live in.”

The dictator Prime Minister then defended the depreciating value of HDB, saying that 99 years “is a very long time”, and advised that Singaporeans to rent out a room or sell their HDB flats to retire:

“When you retire after living in your flat for 30 or 40 years, the flat will still have a good 60 plus years of lease left. And that’s long enough for it to retain substantial value, and be a good retirement nest egg. Retirees in such a situation could explore options such as to continue living in the flat, rent out a room for income if needed, and one day pass it down to their children. They could also right-size by selling the flat and moving to a smaller unit, or tap into the Lease Buyback scheme by returning the remaining lease to HDB.”

Describing inheritance of HDB housing as a “bonus”, Lee Hsien Loong said all young Singaporeans should pay for their own 30-year mortgage HDB housing, to avoid worrying about the 99 year lease.:

“Very few of today’s HDB owners will outlive their leases. HDB estimates that it will happen to less than two per cent of households. So it’s not likely to happen to you. It could happen to your children if they inherit your flat. But this shouldn’t be a problem if your children buy their own BTO flat, with its own 99-year lease, as many do. Because then an inheritance for them would be a gift and a bonus… There is no need to worry over exactly what will happen when a flat’s lease is up and it has to be returned to the state. The Government will help you to get another flat to live in. It may be a BTO flat from HDB with a fresh 99-year lease … It may be a resale flat on a shorter and cheaper lease. Or it may be a two-room Flexi flat for retirement – different options depending on your needs and what you can afford…But whichever option you choose, you will have to pay for the lease.”

Despite claiming to address inequality, Singapore has one of the highest GINI coefficient in the world at 0.458. The Prime Minister has also conveniently left out the fact that a Singaporean couple is allowed to have only one HDB apartment, and that multiple ownership is disallowed.