SINGAPORE – An apartment for condominiums sold on a 99-year lease is an asset that will rise as the country thrives – a fundamental principle of Singapore's property policy, Secretary of Development Cooperation Lawrence Wong said on Tuesday (August 21).
Said Mr. Wong: "There is a good chance that in a period of time, if the economy does well, if incomes rise, the value of real estate will appreciate along with the fundamentals of the economy, and your interest in the nation – your home – can also appreciate. "
Mr. Wong answered a question from a member of the public about the 99-year long lease for HDB flats on a forum organized by the Reach Government Feedback Unit about what people thought about the National Rally of Sunday.
Members of the public watched Mr Wong and Reach Chairman Sam Tan with questions about the cost of living, housing and foreign affairs – topics that are central to Prime Minister Lee Hsien Loong's speech.
The first question of the night, by a resident of Toa Payoh who called himself Mr Lu, concerned a fiercely debated question of whether residents own, rent or rent their homes in HDB.
Mr. Lu asked whether the government should clarify that a lease of 99 years is actually a form of long-term rent and whether it was thus mislead for residents to realize capital gains with their property.
Mr. Wong said that a lease of 99 years is owned, not a lease.
"When you buy a car, how long can you use a car? Is it a rental car, or your car? A lease of 99 years is much longer than 10 years.It is yours.It is an advantage by the homeowner, "said Mr. Wong.
Further explaining, he explained why residential properties, public or private, are sold with lease contracts of 99 years. Since 1967, all land sold by the government has been let for a maximum duration of 99 years.
"We are scissors in Singapore, we have limitations: if we distribute and sell land today, everyone who buys it will be very happy, and your children and everyone you cross your country will be very happy, but ultimately, there people will be without a country ", said Mr Wong.
That is why the limited leasehold conditions enable Singapore to recycle land for the future. Although finite, it will cover the housing needs of at least two generations, he added.
Mr. Sam Tan, who is also Secretary of State for Foreign Affairs, Social and Family Development, agreed that the good economic growth of the past five decades has led to homes becoming a valuable asset.
"As long as we as a people and country work together to grow our economy and share in the wealth of economic growth, our homes will be an important and valuable asset in the future that we can use as a nest for retirement," said Mr. Tan.
On another question about the potential dissimilar nature of the Voluntary Early Redevelopment Scheme (Verse), in which residents of the HDB will vote on whether or not to sell their flats, Mr. Wong acknowledged that the government was aware of this and worked to make the less polarization process. He noted that the HDB has a great deal of experience with questioning residents and that it generally went smoothly.
"I think the concerns are real and I recognize that the bet is higher, it is not just about upgrading elevator or HIP (Home Improvement Program), it is potentially more consistent." The bet is higher, "he said.
"But we have time to work out the exact mechanism and how to do it without causing too many breakdowns, so we create self-confidence within the block itself, we do not want this to happen."
An ideal mechanism for the voting process is one in which residents can have collective control if Vers is offered, he said. He added that the government would work out the details taking into account these concerns.
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