Photo of Lee Kuan Yew with HDB flats from property guru

About 700,000 new citizens who joined Singapore during the rapid population increase between 2006 and 2013 are set to become the biggest losers of the new HDB lease depreciation policy.

Singaporeans who bought HDB in the period are suffering losses from 15% to 60%, depending on the amount of lease left in their HDB flat. HDB resale prices peaked at 2013 and it is now on its 7th consecutive year of decline today.

Many new citizens sold off their houses in their home countries to buy a HDB flat in Singapore, thinking it would appreciate forever like Hong Kong’s. This turned out to be the biggest financial mistake they ever made. The bigger your HDB flat is today, the bigger your losses.

In 2018, Lee Hsien Loong confirmed at his National Day Rally that HDB flats will be handed over to the government at zero compensation at the end of its lease. The PAP leader said “it is only fair”, to justify his new policy allowing HDB flats to depreciate – a reversal from his father Lee Kuan Yew’s promise that HDB prices will appreciate every year.

To be fair, the HDB lease regulation did not change. The policy did. Unlike the old leaders, the current PAP leadership is not taking any action to promote HDB value appreciation. En bloc schemes like SERS that pays HDB owners profitable compensation are dwindling, and it is likely to be eliminated.

Estate upgradings promised during elections are no longer relevant as housing prices will continue to depreciate.

A depreciating HDB lease had also reversed public support for a 6.9 million population policy, since more newcomers is not going to increase property value. Singaporeans are also facing a more worrisome retirement, since they are unlikely to extract any substantial funds from downgrading and lease buyback.