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One issue that needs to be addressed is the decaying of leases on older HDB flats, which erodes their value and depletes their owners' potential retirement funds.
As HDB flats approach the end of their 99-year leases, their value falls. While this was not much of a problem 20 years ago, it will become progressively so as the flats age. By next year, Mr Ku estimated that 220,000 HDB flats will be more than 40 years old, and by 2030, that number will swell to around 500,000 - equivalent to almost half the current stock of HDB flats of just over one million.
The erosion in the value of older HDB flats and the shrinking resale market for them will happen at the same time as the ageing of the population is accelerating.
The result: Asset values will be declining just as many people will be retiring and trying to cash out. Given that the bulk of the net worth of the majority of Singaporeans lies in their HDB flats, the decaying of leases will have serious implications for retirement adequacy.
https://www.straitstimes.com/opinion/the-tricky-problem-of-lease-decay
As HDB flats approach the end of their 99-year leases, their value falls. While this was not much of a problem 20 years ago, it will become progressively so as the flats age. By next year, Mr Ku estimated that 220,000 HDB flats will be more than 40 years old, and by 2030, that number will swell to around 500,000 - equivalent to almost half the current stock of HDB flats of just over one million.
The erosion in the value of older HDB flats and the shrinking resale market for them will happen at the same time as the ageing of the population is accelerating.
The result: Asset values will be declining just as many people will be retiring and trying to cash out. Given that the bulk of the net worth of the majority of Singaporeans lies in their HDB flats, the decaying of leases will have serious implications for retirement adequacy.
https://www.straitstimes.com/opinion/the-tricky-problem-of-lease-decay
