Property Age (Lease) in the Singapore Property Market
Updated: Mar 22, 2021
Age is a huge problem now in the Singapore property market; and by age I don’t mean growing older personally, but the increasing age of properties in Singapore. In particular, HDB flat owners are most affected by this age problem in Singapore.
First, you need to know that in Singapore, a property owner is eligible to use his CPF for the property if his age plus the remaining lease of the property is at least 80 years. However, this poses a complication for young buyers in their mid-20s, as, depending on their age, they will not be able to buy properties with a remaining lease of less than 60 years. This, and other reasons relating to the depreciation of property values over time, mean that the older the property, the harder it is to sell.
Prices for older properties are dropping now. While some properties have en bloc potential, with the potential increasing as it gets older, for HDB en bloc, this is carried out by the government, which means that prices will have to remain affordable and competitive. In the last few years, we have also not seen much movement or motivation to push for HDB en bloc.
It is my opinion that there is little to no chance that the prices of old HDB properties will shoot upwards again, and this is something we just have to accept and manage accordingly.
If you ever need someone with expert knowledge of the Singapore property market, feel free to approach me for a casual chat – I am always here to help you make the right decision in selling or buying Singapore property.