As from April 2013 my Journey in Investing is to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

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Saturday, 25 July 2020

Am I worry about worthless 4 RM HDB at the end of 99-year lease? (3)

Read? Am I worry about worthless 4 RM HDB at the end of 99-year lease? (2)

Read? Chance meeting with the fisherman!

Read? Financially stupid people are everywhere. Don't be one of them.

"Financially stupid people are everywhere. Don't be one of them." - Jason Kelly

Good question from Ivan!

Evan 25 July 2020 at 09:44

Why does the 99 year lease not worry those that are financial literate?


Read? Hougang Avenue 10

As of today search online!

Case study of buying 4 Rm HDB with less than 63 yrs lease before expiring worthless.

1. Resale 4 Rm HDB flat built at 1984 at $498K

2. Saving on annual rental or upfront rental at $26K

3. No of years to fully recover your initial capital of $498K from rental savings is 19 years

4. Free home stay UP to 44 years or smaller residual investment gains after XX years down the road if you want to run road to Thailand or Vietnam!


  1. Hi uncle CW8888, the 26K is average market value of annual rental?

    One look at the state of the Geylang properties when its lease run out end of this year.. if want to run road after XX years..

    Any depreciating asset like myself, need to spend moolah to upkeep and maintain also.. see the first property photo above, swee boh?

  2. CW,

    The math is so simple. Primary school math some more!

    Just like those "simple" rule of thumbs from Jason Kelly.

    Yet, there are those who over complicate things until they are all too messed-up mentally to see the elephant in the room...

    They exclaim in frustration there are no "simple formulas" to help them decide?


    Rule of thumbs - are they not "simple formulas"?


    1. Ahem SMOL,

      Uncle8888's case study fails your rule of thumb of "15". :P

    2. Spur,


      Yup, it meant current Singapore property prices are not "cheap". There's still room to fall if we have another one of those 1997 AFC, 2009 GFC events hitting Singapore one more time.

      Due to the Wuhan virus, property transaction volumes have tanked; prices less so.

      But rentals have softened as more companies let go of their foreign workers going forward. What to do? Big daddy says must take care of Singapore core first mah...

      If one can wait and is bearish on the economy outlook, then it would make sense to take advantage of the declining rentals and wait for property prices to discover gravity before jumping in - buy Value.

      But if one is bullish on the V-shaped recovery thesis, then high prices will become higher prices - buy Growth.

      Then again, if one cannot wait due to shotgun marriage, then either simple rule of thumbs or complex financial buy or rent analysis can be thrown out the window!

      "Mai tu liao"! Wait the secret is out!

    3. Spur,

      Must admit its better to be lucky than smart.

      When I bought my HDB resale 3 room flat in 2003 for $125K, the rental for a whole 3 room flat then was $800 per month.

      I knew I was buying cheap. Didn't even negotiate the price ;)

    4. Those lucky Pioneer and Merdeka generations in Lao Lee Singapore HDB Millionaire Draw. Only those who were rich enough and smarter are eligible to participate and those who could't participate may kpkb that life in Singapore is unfair or hard.

    5. Former CEO of the Housing Development Board and former chief planner, Mr Liu Thai Ker, came under the spotlight recently for suggesting that the country should plan for 10 million people.

      During the general election, the Singapore Democratic Party claims that the 10 million figure was remarks made by Deputy Prime Minister Heng Swee Keat. My Heng stated that he had cited Mr Liu in response to the Government’s 2013 White Paper.

      Mr Liu go on to state that “I think citizens must respect that at the end of 99 years, the flat goes back to the Government – because that’s clearly spelt out in the lease terms.”

    6. Hi SMOL,

      Analyse until paralyse right.
      Unfortunately, I may be one of them lol

      That may be the "why" of while I personally don't worry but I probably understand and empathise with friends who may "worry".

      Humans tend to over complicate things because of 1) heart (desire) VS head (affordability); 2) comparison, right? Talk about a desire for a high maintainence gf or bf when one's current income not able to support. LOL

      I came across case studies of individuals who may have worn too big a hat. Perhaps they had thought that the future was bright etc but alas.

      To others, give chance lah. We don't know their pains unless we know them upclose and personal.

      Not everyone can "see" the way things are or left-wired brain. Where's the romanticism in practicality? ;)

      I wonder how many actually read the terms in the documents before signing.

      Me? I prefer to keep things as simple as possible but it doesn't mean that I am not mentally messed up :)

    7. Buildingmydream,


      You're the type I can't stand in corporate life ;)


      Wait for more reports?

      Have another round meeting?

      Can we make a decision oredi!!!???

      In gaming analogy, you'll do better with turn-based games. Real-time strategy games can be too fast paced for your liking... Just joking!

      Of course everyone is different; thank goodness for that!

      In the African savanna, when lions hunt, they go for the weak, the old, the injured first.

      That's why we all need an EDGE in real life.

      We either outrun others.

      Out smart the person next to us.

      Or "out-beauty" the other bitches out there.

      Singapore is where we are today precisely we can do the above 3 over countries. If not, why would MNCs and high networth individuals come here?

    8. Hi SMOL,

      No love lost ;)

      Right from the get-go, purpose is to have fun poking around to learn different perspectives.. to poke and be poked LOL!

      Your initial assessment is not accurate but interesting to know :)

      Agree with survival of the fittest and coincidentally, I wrote just yesterday on gaining EDGE! Is it a case of similar minds think alike eh.

      Staying relevant is important. Being complacent is not. In the African savannah, look out for new TIGERS rising and existing TIGERS waiting to seize the game from our mouths right in front of our eyes.

    9. Buildingmydream,

      I wasn't making an assessment of you; just "throwing stones to ask the way" ;)

      Its my Johari Window thingy.

      Without this process of poking and being poked in return, how else can we understand ourselves better? Especially when people wear brown paper bags over their heads online?

      That's how CW and I have become like Swiss cheese over the years ;)


    10. Hi SMOL,

      Keep the stones coming ;)

      Others may wear brown, I wear my red-and-white paper bag with pride. Onwards and forwards :)

      Without the red-and-white paper bag, others may be unwilling to poke. With the paper bag, no holds barred. Items in the blindspots and unknown windows appear! voilà!

      I aspire to become Swiss cheese like my senpais in both you and uncle CW8888 one fine day..


  3. Not sure about Hougang, but in the area I stay at, those bigger old 4 rm flats are selling at about the same price as newly MOP small 3 rm flats.

    There must be a reason.

    The real estate agents and sellers cannot do math?

    1. Hi Rainbowcoin,

      It may be due to time value of lease decay for the 4-rooms aka how old.

      This may tell us something about size VS lease decay ;)

  4. You know, there also a get-around to not needing to think so much about forking out a big sum for 99-yr lease:

    Just tahan staying with parents until get their flat as inheritance.
    That's what my cousins did.

    1. What if have siblings and they are married with their own BTOs. They have to sell one of their HDBs and choose to sell the inherited one. Tricky.

  5. I see no reason to be worried or unhappy about HDB leasehold.

    Firstly, it's a good financial deal. Your post already says it all.

    Secondly, a deal is a deal. It's leasehold. Value drops to zero at end of lease.

    Thirdly, HDBs are designed to be cheap. That's why it's leasehold. Trying to tinker with the terms and conditions may result in more expensive public housing for next generation. Creating problems for the children means creating problems for parents.

    Fourthly, buyer has 99 years to prepare. No uncertainty. So, no excuse to be caught unprepared.

  6. i think the issue here is that if everyone suffers the same fate then I think most people will be happy.
    but they are not. they see people flipping hdb bto and they also want that money. then they see old flats making losses and losing money and they are not happy.
    They see the elite in freehold and ask why cant they be like me and have leasehold problem to worry.

    1. Ha ha. Can socialism work in Singapore?

      Next GE bring back barisan sosialis to power and make most people happy. LOL!


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