Forget that myth about your HDB flat being your "asset" - it is not!

[Confuseous]

However I will reserve further discussion of the contradictions in the PM’s statement to another time. Here I just wanted to make one simple point. If the PM and the PAP were serious about not burdening future generations then why not give HDB owners the freehold of their apartments once they have paid off their thirty-five year loans? As everyone knows, HDB leases are only for ninety-nine years, which means that future generations will have to start the process of paying for a home all over again because the property will revert to the government at the end of the lease.

In his National Day Rally Speech in 2011, the PM said “The way we have done it which I think has been successful has been to give people assets, especially an HDB flat;”. As usual the PM is being economical with the truth, as in an actuality the HDB purchase price should be amortized over the life of the lease. At the end of the lease the asset will be worth zero and our descendants will inherit nothing.

If Singaporeans collectively own the freehold of our HDB properties then we can manage the estates ourselves and make our own decisions about upgrading and redevelopment. The full rise in the value of the land will accrete to us rather than a large part being siphoned off by the government. If the majority of us can never aspire to owning (a share of) freehold property, then we can never become a true democracy, because we will always be dependent on the government. Just as at Cheng San in 1997, the PAP government will continue to try and use Singaporeans’ insecurity over property ownership to ensure that they stay in power. This cannot be to the long-term good of our country.

- http://sonofadud.com/2014/03/08/the...ingaporeans-with-his-outmoded-economic-ideas/

 

[Leongsam]

Private homes on freehold land are not assets either as long as you live in them.

Real Estate is only classified as an asset if it is yielding a return. If your HDB flat generates income, then it is an asset too.

 

[sochi2014]

is an asset if you plan to sell and move abroad.

otherwise it is the only place you can stay.

 

[Papsmearer]

Private homes on freehold land are not assets either as long as you live in them.

Real Estate is only classified as an asset if it is yielding a return. If your HDB flat generates income, then it is an asset too.

It is yielding a return, you stupid moron. If you bought on bungalow on a freehold land in 1974 for $200,000 in cash, and its worth $4 million today, what's your Return on Investment in the 40 years? Is it not 2000%, or annualized average of return of 50%? If you look at the compounded rate of return using 40 periods to calculate, than the yield is 7.77%

 

[Leongsam]

It is yielding a return, you stupid moron. If you bought on bungalow on a freehold land in 1974 for $200,000 in cash, and its worth $4 million today, what's your Return on Investment in the 40 years? Is it not 2000%, or annualized average of return of 50%? If you look at the compounded rate of return using 40 periods to calculate, than the yield is 7.77%

That's capital gain not yield. It can go either way regardless of whether it's freehold or leasehold. The key to capital gain is timing and leasehold properties can make you a lot of money too if you get it right.