Singapore's 99 year vs China's 70 year leases

[Randy W]

Two different animals here - in Singapore, you are supposed to be "upgraded" when the old "lease" expires to new affordable housing at a new, but "affordable" price.

When the "lease" is up, everyone moves out, and the housing is either refurbished, or torn down and rebuilt - to be sold to someone else. The home is bought back at market value, which will be pretty close to $0.

While the "lease" is in effect, it's yours to do with as you wish, including sell it, or will it to your heirs.

This has the effect of controlling the out of control housing cost spirals, but has the unnerving effect of letting your investment depreciate to $0 over the course of the 99 years.

In China, on the other hand, you OWN your property indefinitely. If the government wants to take "their land" back, they will need to replace the home with a new equivalent home at 1.3 times the floor space. Nobody actually holds a lease - the developers who bought it in the first place have LONG since disappeared. The lease is "automatically renewed".

That is, the "lease" applies to the land only.

SINGAPORE’S HOMEOWNERS HAVE 99 PROBLEMS (AND THE LEASE IS NO 1)

As the oldest public housing flats near the halfway mark of their 99-year leases, owners grapple with the fear that what once seemed an astute investment now seems doomed to depreciation

A model of a public housing estate at the Housing Development Board (HDB) gallery in Singapore. Photo: Reuters

Edited August 19, 2023 by Randy W (see edit history)

[dan1984]

Interesting.

[Allon]

I just got back from a trip to Singapore. It surprises me that the residents feel there is actually something wrong with their city/state. I talked a lot with taxi drivers, fellow workers, hotel staff, and just people in general as I walked around. They are so proud of their city and seemingly happy. (I call it the Stepford CIty.) Some of the ex-pats could only complain about the humidity and it is pretty high. But it is a well planned city. You could see the parks and trees and other landscaping was, I won't say perfect, but close to it. They had lots of water. :Garbage is literally a dirty word. It is stashed in out of the way places. Even rest rooms are at the end of a long corridor in malls.

 

But what a contrast in general to our housing. I wonder......

[Randy W]

from the SCMP

 

Again, these are VERY different from the Chinese 70 year leases.

Are Singapore’s 99-year leases about to become an election issue?

• Public housing owners in Singapore fear heavy losses as their leases run out
• But with an election looming, the government will surely step in. Won’t it?

 

A public housing block in Singapore. Photo: Reuters

Past trends show a price increase for the first 20 years, after which resale prices may rise or taper slightly downwards. Prices then drop further as the flats age beyond 40 years.

 

This is because of the mandated 99 year lifetime of the property.

Edited February 3, 2023 by Randy W (see edit history)