Is HDB an asset?

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HDB is not an asset if you need to stay in it.

The recent debate on HDB leaseholds have stirred quite a lot of emotions with many Singaporeans.

Most Singaporeans stay in HDB flats. About 80% of Singaporeans own a HDB flat and many have only one property.

As HDB flats are financed mainly by CPF instalments, HDB flats are being tied to the retirement plans of many. But HDB cannot be your retirement plan if you are staying in it.

The facts of HDB are as below:

  • HDB leasehold upon reaching 0, will be worth $0.
  • HDB BTOs and various grants for resale flats subsidises the cost of purchasing one.
  • Not all HDBs are selected for SERS. Moving on, fewer flats will be selected for SERS.
  • Most HDB are likely to have their leasehold reduced to 0 years.

HDB flat owners are just long term tenants, as evident by them being referred to as lessees. However, lessees are allowed to sublet their houses or rent out rooms.

Schemes like housing loans and grants are helpful for people to get a HDB flat. As HDB is a place for residence, it cannot be deemed as an asset and it is not financially prudent to overpay for one or stretch the payment duration, since it is a necessity.

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