Our thoughts: Anyone knows what is the cost of land when one buys say, a 4-room HDB flat from HDB? In a typical GLS for a 99-year leasehold residential site, private developers pay market price depending on the tender bid and this make up about 50 to 60 per cent of the condo sale price. But what about a 99-year leasehold newly constructed HDB flat that sells for, say $200k, what is the land cost?
In any case, location seems to be a stronger price-determinant than the tenure of the property. It doesn’t take much effort to realise that HDB flats with 70 years left but located in matured estates and closer to the city, enjoy a price premium comapred to 99 year HDB flat in one end of the island.
To sum up this news in 3 pointers:
- What’s been proposed? – The sale of HDB flats with 70-year lease.
- What’s the consideration? – If buyers are looking for lower pricing for a 70-year leasehold HDB flat, you will be disappointed that it will not differ much compare to a 99-year leasehold, everything else been equal.
- Are all HDB flats 99-year leasehold? – HDB flats purchased directly from HDB comes with a fresh 99-year lease except Studio apartments that come with 30-year lease instead.
For the full article from ChannelNewsAsia here
It is not necessary for the Housing and Development Board (HDB) to sell new flats with a 70-year lease alongside 99-year flats, as there is unlikely to be “strong demand” for the proposed option, said National Development Minister Khaw Boon Wan on Monday (Nov 3).
Mr Khaw said there are two reasons for this assessment: Firstly, the upfront cost HDB has to incur to offer a 70-year lease option is the same as that of a 99-year lease; and secondly, while a 70-year lease flat should be cheaper than a 99-year lease, the “cost reduction is not directly proportionate to the reduction in lease”.
“Buyers who prefer flats on 70-year leases can buy them from the resale market, and still be eligible for housing grants if they are first-time buyers,” the minister said, in response to the proposal mentioned by MP Seah Kian Peng in Parliament.
He added that HDB prices new flats on a 99-year lease to be “highly affordable for first-time buyers”.
“With significant housing grants, first-timer families who today earn S$1,000 per month can afford a 2-room Build-To-Order (BTO) flat in a non-mature estate. Those who earn S$2,000 per month can afford a 3-room BTO flat, and those who earn S$4,000 per month, a 4-room BTO flat. They can do so with little or no out-of-pocket cash,” Mr Khaw stated.
He did note there are exceptions, such as Studio Apartments which are sold on a 30-year lease to senior citizens as their retirement homes.