Friday, October 06, 2017

TOTD: Awakening from the HDB-Asset Enhancement Myth

Thought of the Day - Awakening from the HDB-Asset Enhancement Myth




Several friends asked me "What is Lawrence Wong trying to do?"

They are referring to why Lawrence Wong keeps reminding Singaporeans that your HDB flat will have ZERO value when the 99 Lease hold expires.

They are confused and full of anxiety.

I simply told them, this is nothing new, I have talked about it more than a decade ago!

Almost all of them now consider to sell off their HDB flats in anxiety. Then I ask, where are you going to live?

Some ask me is that the reason why I sold my own HDB flat back in 2010? I said, yes, partly so but most importantly, I need the cash for the General Elections. I have no regrets.

Then they ask me, why didn't my relatives or the flat my mother owns in Ang Mo Kio sold? Here again, I said, where can they live if they sell their HDB flats?

The key difference here is that, my parents bought their flat in Ang Mo Kio, way before this nonsensical "Asset Enhancement Scheme" came about in late 1980s throughout 1990s, Goh Chok Tong's time. They bought it cheap. There is no anxiety of having a "costly HDB flat" turned into worthless ashes in the end.

Unfortunately, many people were caught by that TOTALLY MISLEADING Koyok of "Asset Enhancement Scheme" which was the Theme of PAP back in 1990s till 2000s that kept them in total monopoly of power. A few generations of Singaporeans have been misled into believe in such nonsense. Even up till GE 2011, PAP's MBT still tried to sing song about Asset Enhancement Scheme for "Monetizing HDB Flat" for retirement financing.

Well, lucky for MBT and PAP, he didn't dare to take up my challenge of OPEN LIVE DEBATE over his HDB-Asset Enhancement Scheme Policy, else he will be knocked out and black out totally. But their lucky is Singaporeans' misfortune. Most Singaporeans are still submerged in such devious myth of HDB Asset Enhancement Scheme for another 6 years, until Lawrence Wong broke the truth.

Lawrence Wong is simply telling the Truth, nothing but the Truth. Your HDB flat will become Zero Value when the 99 year lease expires. Why is he talking about this NOW?

This is because PAP government is not going to carry out SERS Enblock for most of the HDB flats, which is the only way to save you from the eventuality of Zero Value, because it is not profitable for PAP government to do it. They are just mentally preparing the massive Singaporeans living in HDB flats that they should not expect much from their HDB flats at the end of the 99 lease. They should be prepared to live with their whole life's saving in CPF being wiped off when the lease is nearing expiration.

The PAP government, if they still exist by then, will not renew your HDB lease at all.

Singaporeans should wake up from this TWO DECADES Myth about HDB-Asset Enhancement Scheme. This is especially so for the younger generations, those who are thinking of paying extraordinary high prices for their BTO or HDB resale flats.

I was amused and worried for those people who are forking out near to a Million dollars for a resale flat in some Prime location. You have to know that even if your HDB flat is located at Prime district or location, IT WILL DEPRECIATE eventually and BECOME ZERO in value when the lease expires.

Your HDB flat will start to depreciate when it reaches 40 year old. No banks will make normal loan when it passes 50 years old. When it reaches 70 years old, basically no bank will provide loan to  any buyer at all, regardless of where the flat is situated.

This is something PAP has been hiding from you while they were singing and praising themselves about HDB-Asset Enhancement Scheme as a political tool of Pork-Barrel politicking!  I would say that over 80% of all old HDB flats will not be Enblock. You just cannot "enhance" your HDB value when the eventuality of ZERO Value is definite!

The faster and earlier Singaporeans realize this FACT and TRUTH, the better it is for them. Else, you will end up destroying your own retirement financing plan.

I have not come to the CPF-HDB financing part yet.... that's for another article another day.

Goh Meng Seng

27 comments:

Anonymous said...

Goh Meng Seng, why are you harping on this matter of HDB flat will have ZERO value when the 99 Lease hold expires? For what useful purpose?

If Sinkies don't want to live in HDB because of this, is there a cheaper alternative?

And what choice do Sinkies have if they can only afford HDB, and also not able or willing to emigrate?

And why do you worry so much abut HDB being zero value at the end of 99 years?

Do you worry that you will eventually die one day? If not, why worry about HDB flat being zero value at end of 99 years?

Anonymous said...

This MS Goh tok colk . 1 blong to no nonsense regime.
This MS Goh tok colk . 1 blong to all kinds of nonsense regime.
Dun compare.

Anonymous said...

As we are no doubt aware that leasehold may not be a sore-point to purchasers and investors?
If we look carefully, new and freshly built leasehold properties were sold at higher PSF than a next-door freehold which could be old and not in good condition?
Even a child would have known that freehold sites are a rarity. GLS consist of all 99 years and so are those huge HUDC land parcels? In conclusion the developers have tamer choices on freehold land?
Please no more silly noises on 99 years.





Anonymous said...

When properties were at standstill and created a domino effect on almost everything. A lot of people were retrench in the past few years. Some took a bridging loan on their property bought a 5 room HDB, but was unable to sell their existing home due to lack of buyers. All people can do is complained to each other, and the perpetrators who created this constraint escape punishment because it is not easy to demonstrate that they have broken any laws.

Anonymous said...

Notice that if you go to some hospital's eating place you will realise that the food is cheap and good especially at Khoo Teck Puat hospital. Healthy menu are in abundance of choices. I am not talking about Food Court. You can feel that there is care that perhaps the hospital makes sure that the staffs and the visitors can eat cheaply with good quality food. Perhaps rental was cheap to provide a service.

Compare that with the properties starting with the GLS bid. Low bid translates to no sale. Private collective sale is like chicken and egg. High reserve prices were needed to get 80% consent in the Orchard area where a few properties were so old that they were turning into slums by Singapore standards. Foreigners, PRS and second property owners refused to sign due to the extreme high ABSD on replacement purchases. Progress and renewal were hindered.

Anonymous said...

private housing- belonging to or for the use of one particular person or group of people only.

public housing-belonging to or for the use of one particular person or group of people only.

public & private housing- belonging to or for the use of one particular person or group of people only.

no housing-belonging to or for the use of one particular person or group of people only.



Anonymous said...

Most of the views attacking GMS writing on this subject-matters are either economic illiterate or intellectually barren of truth telling.

Anonymous said...

Real estate booms driven by the enbloc sales have some effect on the imminent resale market. The significance of movements have led to some asset enhancements and monetary life.

Anonymous said...

When due-diligence were given out they were not in the Q.
When money-absorbing diligence were given out all the different agencies in the Q.

Anonymous said...

A clever sculptor chips away marble block parts that are not needed to produce an awesome statue.

Anonymous said...

In the recent couple of years developers have been quickly restocking their land banks, there is a limit to how much money they can borrow / spend to finance such restocking exercises.

Once they have what they consider to be sufficient land, or they have either depleted their cash reserves or exhausted their finance facilities, the current en bloc euphoria will naturally dissipate.

As the old adage goes 'the early bird catches the worm' hence the rush for a lot of estates to expedite their respective en bloc sales.

Anonymous said...

Scarcity of human intellectual and psychological resources in the MIW.

Anonymous said...

Some newly built private and public apartments have extremely poor workmanship. Why only warranty for 1 year. If there is a 5 year warranty, things might have been built to standards.
When its only proper that they should intervene to give the people assurances of a hassle free new home, the departments turn a blind eye.

Anonymous said...

In a free society policies that interfere with markets by shutting them down, are denying the

people of achieving their fulfillment.

Anonymous said...

A really sad time for a country when the enbloc industry is seeking ways to maximise their

home. With pay cuts, retrenchments, business hardship, not being able to refinance and the

hardship of finding a buyer for their homes to downgrade has made these people to scramble

for other sources of money income tells a story more than more the eye? Enbloc is one way out

of the money problems due to the high cost of living.

Anonymous said...

The increase in the enbloc sales are due to the increases in interruptions on the property market which in turn causes destruction on the buying and selling activity in the last 6 years. This perceived exuberance are due to balancing act of refilling. Developers are in building business. No one owns the people or the country. Only GCT and the LEE FOUNDATION owns 50 per cent.

Anonymous said...

The new HDB is better now. More privacy because of its point -block structure. Those days one have to walk through people's front doors before you reached your own unit, the long corridors. Neighbours are aware of one another's ins and outs. Not a good place for retreating after a tired days work. We have sides, top and bottom neighbours. Now maybe only four units per floor. Took them such a long time to refine such living standards.

Anonymous said...

Mortgagee sale for properties are a relative new name in the past but are quite common nowadays. What happened? From a rational pure standpoint, it could only be their poor economic policies for this reaction!

Anonymous said...

With stocks too volatile in values, you have nothing if you lose. Real estate, you own the property so is a better investment and will not be depleted over times. Therefor real estate is inherently a better investment ,does not lose as much as stocks. We are not dealing with theoretical physics but social sciences.

Anonymous said...

"A really sad time for a country when the enbloc industry is seeking ways to maximise their

home. With pay cuts, retrenchments, business hardship, not being able to refinance and the

hardship of finding a buyer for their homes to downgrade has made these people to scramble

for other sources of money income tells a story more than more the eye? Enbloc is one way out

of the money problems due to the high cost of living."
7:33 pm.

Pls tell us something we don't know rather than something we already know. Besides the mental defect of en-bloc is going stale.

Anonymous said...

'hardship of finding a buyer for their homes to downgrade has made these people to scramble'




Can sell one but less price. Buyers normally asked for 7% or 15% discount excuse they have to pay absd. They will buy if give discount one for the absd. Juz that seller pay absd. Who gain? Not buyers not sellers. This type of maths everyone sure pass one.

Anonymous said...

Feeling that society had increasingly rely on being thrust into a rapidly changing policies, we live in an insecure lives all due to the turfs covering their own skin.

Anonymous said...

Empathy was lost and society is still searching for it till today. Will it be found in 2018?

Anonymous said...

Driving the humans nuts with all the footsteps and chairs dragging from the above units, but all they are interested is making sure their car parks fees are not missed. That's the real pain of those up there today. Money first, human misery secondary.

Anonymous said...

99 years no problem. They are affordable and subsidies with grants. Which other countries give the people money to own public homes. Even exec condos are affordable with subsidies and grants. That was the reason why about 75% live in public housing.

Anonymous said...

Will private property be subsidies with grants?

Anonymous said...

Spacious homes are a place for families, friends and guests to find happiness, comfort and joy. Homes supposedly clean and orderly, livable and peaceful.