In 2013, PAP severely limited the use of CPF for flats with leases of less than 60 years.
At this stage of the HDB lease cycle, PAP really has no choice but to depress HDB flat prices. This is to enable HDB to pay lelong prices to lessees under the Lease Buyback Scheme.
Post 2013, demand for flats with leases of less than 60 years has been reduced to a trickle.
Even without the 2013 CPF ruling, HDB was only willing to buy back at rock-bottom prices.**
HDB lessees will soon be helping PAP to reduce billion$ in expenditure as about 30,000 flats will turn 40 annually in the next 10 years.
Lessees who sell their remaining leases are being squeezed, as confirmed by HDB’s illustration:
– Remaining lease (no outstanding loan): 65 years
– Market value: $450,000
– Value of tail-end 35-year lease: $190,000