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PM Lee: “The value of these homes will never go down”…oops, I lied.


I did warn you dear readers. I did predict this, I did raise the alarm and I did warn you.

In his NDR Rally speech yesterday Lee Hsien Loong admitted he and his dad have been lying to Singaporeans all along when they promised that HDB would be an ever-appreciating asset.

This is what LHL said in 2010 before the GE:

“The HDB flat is not just a shelter but also a key investment asset…over the long term, the value of HDB flats depends on the strength of the Singapore economy.  Provided Singapore continues to do well, our flats will maintain their value, and Singaporeans can enjoy an appreciating asset.”

and what LKY said around the same time:

No country in the world has given its citizens an asset as valuable as what we’ve given every family here. And if you say that policy is at fault, you must be daft.”

and in 2013 at the launch of Tanjong Pagar’s 5 year Master Plan:

We intend to keep the value of these homes up, it will never go down. Because it will be renewed, the surroundings will improve, and as Singapore prospers, GDP goes up, the value of homes will go up.”

LKY also said:

“We never went for the iron rice bowl. Each person has their own porcelain rice bowl and if you break it, it’s your bad luck. And they’ll look after it when it’s their own and its porcelain.”

Yet now, just as I predicted (see links below), LHL is warning Singaporeans that when their 99 year lease is up, their HDB apartment will revert to the Government for zero compensation. In other words the so-called porcelain rice bowl is not your own and never has been!

If LHL were running a public company and had made misleading statements about investments or the value of the company’s shares, that induced people to buy shares or  invest their money, then he would face sanctions,  maybe shareholder lawsuits or even criminal charges. I believe past statements by him, his dad and other PAP ministers have led Singaporeans to believe that as the 99 year lease ran out the Government would renew it or convert it into freehold.

As many blocks have been SERS-ed (Selective En-Bloc Redevelopment Scheme) most people probably thought that a caring Emperor like Lee Hsien Loong would look after them. However, as I have pointed out many times over the years in this blog (see below for links), the Government will only SERS a block if it sees a profitable redevelopment opportunity, such as replacing a 10-storey block with a 50-storey one for our growing imported population. The average HDB owner might think he is getting a great deal but the fact is that most of the uplift in the value of the property is going to the Government.

Here are some of PM Lee’s justifications for the present system of 99 year leases with my explanation of why they do not make any sense.

“… if flats were to be sold as a freehold property, the Government would eventually run out of land to build new flats for future generations.”

This is nonsensical. As 90% of Singaporeans live in HDB flats they could either sell them to other Singaporeans or bequeath them to their descendants. Or they could sell them to a private developer who would build new blocks but with controls to ensure that a certain proportion was set aside for affordable housing. Just because land is privately owned does not mean that it will be taken off the market. It will only have value if housing units are occupied.

We should not need more land unless the Government is planning to dramatically increase the population. Since the Government knows no other easy way of boosting GDP growth, and ensuring a built-in majority of grateful voters a relaxation of controls and a return to the years of very rapid population growth through immigration is clearly on the cards. I have no objection in principle to immigration but it has to be shown to benefit the majority of the population and particularly the bottom quartile.

“Our society would split into property owners and those who cannot afford a property, and that would be most unequal and socially divisive,” Mr Lee said. That is why 99-year leases are not just for HDB flats, but also for private housing. He pointed out that land for private housing is sold only with a 99-year lease.

Suddenly PM Lee is concerned about inequality? Give me a break. Thanks to his dad, we already have the world’s highest paid PM, civil servants, judiciary and CEOs of Government companies. If LHL is so concerned about inequality why won’t he disclose  what he pays his wife whose compensation over the decades she has been in charge of Temasek must be hundreds of millions, if not billions, of dollars.

We are already a highly unequal society with one of the highest Gini coefficients in the world. The tax system is highly inequitable as there are no taxes on capital gains, dividends, investment and interest income. GST, to be raised to 9% in the next Parliament, is extremely regressive particularly as there are no exemptions for necessities like in other countries. There are also over-generous tax breaks that favour the wealthy, like the Working Mothers Tax Credit,  and pander to LKY’s abhorrent eugenicist and racist views. If the Government was really concerned about inequality it could ensure that the tax base was broadened to ensure that there is no unfairness between earned and unearned income, which in Singapore’s case comes mostly from inherited property. The Government could also tax land and unoccupied housing more heavily.

The fact that Singaporeans only hold their property on a long lease from the Government with onerous conditions shows that the PAP’s claim that Singapore has the highest rate of property ownership in the world (around 90%) is false.  If we held the freehold of our HDBs this would help prevent an authoritarian government like the PAP.  The PAP has long relied on maintaining a dependent feudal-type relationship to stay in power and has had no shame in threatening Opposition voters with the loss of estate improvement and amenities.

Secondly the biggest wealth divide in Singapore is between the Government, and the people. The Government owns up to 90% of the land and its land holdings are easily worth several trillion dollars. The General Government Surplus may be at least $40 billion annually and could be much greater though no one knows for sure because of the Government’s determination to keep its assets secret.   It is ludicrous to pretend that we need the Government to hold such a high level of reserves in trust for future generations when productivity growth and technological advancement mean that people 100 years in the future are probably going to be at least five times richer than those living now.

Redistributing some of these assets from the Government to the people has long been one of my priorities. A major step forward would be allowing Singaporeans to buy the freehold of their HDB for nominal amounts.

LHL’s elitist thinking is typified by this statement:

“Very few of today’s HDB owners will outlive their leases. HDB estimates that it will happen to less than two per cent of households,” he noted. “So it’s not likely to happen to you.

“It could happen to your children if they inherit your flat. But this shouldn’t be a problem if your children buy their own BTO flat, with its own 99-year lease, as many do. Because then an inheritance for them would be a gift and a bonus.”

So it’s OK for LHL and his fellow plutocrats to inherit property from their parents (presumably because they were prudent like his mother and bought up landed property using the profits from her law firm’s monopoly on HDB conveyancing) but not OK for you because you are not natural aristocracy.

“There is also a practical reason why we can’t extend the leases,”… “If you look at older buildings today, some look rather worn, even before they are 50 years old. After a century, I am sure the mechanical and electrical systems will be obsolete. The concrete will have deteriorated in our tropical climate.”

Why do HDB buildings look worn after 50 years whereas residential buildings in other countries often last over a hundred years and are refurbished rather than being pulled down? What does that say about the quality of the construction methods and materials that the HDB’s contractors used? As a monopoly Singaporeans had little choice and the Government’s ownership of the land meant prices were artificially inflated.

And for a  supposedly first class mathematician, LHL’s thinking is remarkably muddled. If the residents owned the freehold they could sell out to private developers and reap most of the benefit of the rise in value of the land rather than it going to the Government. That is a completely separate issue from whether the blocks should be pulled down or refurbished.

The PAP’s preoccupation with making money, or maximising the surplus it extracts from the citizens, is strikingly illustrated by LHL’s comments about SERS only being viable if the Government can make a profit:

He said that in cases such as Tanglin Halt, it makes economic sense for the Government to take back the flats early and redevelop the site.

“Because there is a lot of value unlocked, we share this value with residents through generous compensation,” he said. “And with generous compensation, we can make the acquisition compulsory.” 

Unlocking value is the PAP’s euphemism for making money at your expense, only some of which will be shared with you.

While the more gullible among you might be ecstatic about the Government’s new offer of VERS, again the main criteria will be whether it makes economic sense. And the PAP have a great new tool to keep Singaporeans on their best behaviour and voting obediently for their masters in our shameful travesty of what a free and fair election should be.

The best words are straight from LHL’s mouth and demonstrate his utter evasion of responsibility by him, his father and other PAP Ministers for misleading Singaporeans for decades about the value of their HDB:

“But whichever option you choose, you will have to pay for the lease,” he warned. “This is only fair, because you bought the original flat knowing when the lease would run out, and knowing that the flat would then have to be returned to HDB.”


I was saying publicly as long ago as the 2011 GE that PAP’s Asset Enhancement Scheme was a scam whatever the Independent and others may claim

The Problem with HDB or Deflating the Housing Bubble-Part I

The Problem with HDB or Deflating the Housing Bubble-Part 2

CPF and HDB: 10 Real Dirty Tricks.





  1. Mr Jeyaretnam, as illuminating as your blog is about such issues your solution of offering freehold of hdb can also cause a housing bubble. Even in a properly holding democracy housing bubbles can happen caused by government schemes like the uk’s Buy to rent. The central issue here thus is that a house is being used to make a profit rather than being used to live in. Any government that’s trying to make a profit out of its social housing will inevitably fall into the trap of trying to manipulate its citizens, encourage housing bubbles, etc. hence what should be looked at is why the hdb house is being used to earn a profit, if it needs funds what are other sources where it can get it and how to discourage housing speculation in the first place.

    Liked by 1 person

  2. Dear Kenneth
    Currently a HDB flat owner buys effectively a lease(the land is not included) unlike a strata-title private 99 year leasehold property whereby the cost of the land is accounted for.If a HDB flat is sold freehold the cost of the land should be part of the price,right?

    Robert Wee

    Liked by 1 person

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