Actually this holds more significance than you think. First a lot of the so called "CPF" savings are backed by the HDB property asset class.
If the govt does let leases lapse with no renewal option, then the property market will see a significant reaction.
Second, what about banks that give mortgages for such flats? If prices collapse and the banks also have no way to recover their loans they will be affected as well.
I know many people say "aiyah this thing so far down the road not my problem lah." Yeah that is the typical attitude of sinkies.
Not just HDB but also private properties with 99 year leases. Currently we see enblock at increase in plot ratio. But it will hit a limit. Then what then when no developer wants to buy since the plot ratio cannot go higher. Then how?
So sinkies are silly. Short sighted. You work so hard. "invest" in lease hold properties. It is like saying invest by renting a property then sublet? All wealth and asset can go up in smoke return to the government coffers. Who wins? Temasek wins.
banks dont have to give mortgages to flats that have a lease shorter than X amount of years,i think theres a law for that?
but hes right,this is not sinkies problem,this is many years down the road,but this is PAP's economic problem.
right now we are still in the early stages of the leases,the horizon is still far off,prices can still inflate with no regard for the long term consequences,but there is a bell curve for the market value of the HDB flats,and once we pass that critical peak,it could be 50 years old or 60,and people realise there can be no more appreciation in the hdb lease anymore,its all depreciation and downhill from there,there will be increasing momemtum to sell and cash out,the ponzi bubble will burst and the value of our hdb flats will go to hell in a handbasket and along with all their cpf.the value of hdb cannot go up infinitely its impossible,once the lease reaches less than 40 years left the value is going start going down,and the people who buy it would be reluctant to pay market price and demand a discount because their flats is going to be next to worthless in 20 years time.this would force prices down even more and set off a chain reaction.
its like a car coe,why dont u see it appreciating?