Don't let lease angst overshadow HDB's great job in public housing

THERE has been a great deal of public debate over whether HDB flat buyers are lessees or owners and whether their ageing flats can maintain their value till the end of the lease.

The first issue is easily addressed. Flat buyers are owners, unequivocally, despite disingenuous arguments to the contrary by some quarters on the basis that HDB flats are sold by the government on a 99-year lease. Leasehold private properties are also based on 99-year lease, but no one has sensibly argued that those who hold their title deeds are mere tenants.

The other issue is more vexing, especially to owners of older flats who see their home as the sole or predominant source of wealth. Resale flat prices have been on a downtrend since the second quarter of 2013. There is a widening price gap between public and private housing; there is also a widening price gap between the newer and older HDB flats, particularly those close to hitting the 40-year mark. This could be partly due to the restrictions in the use of Central Provident Fund monies to buy HDB flats when there are fewer than 60 years left on the lease. A buyer may still use his CPF money to fund his purchase if his age plus the number of years left on the remaining lease of the property is at least 80, but that too is subject to restrictions; no CPF money can be used if the remaining lease is less than 30 years. Such restrictions, which were put in place to safeguard CPF members' retirement savings, have hurt the resale value of older HDB flats.