NDR 2018: HDB flats leased for 99 years to prevent social division, says PM Lee

Nicholas Yong
Assistant News Editor
(Getty Images file photo)

There is a “fundamental reason” that leases for HDB flats run for 99 years, after which homeowners must return their flats to the state: to be fair to future generations, said Prime Minister Lee Hsien Loong on Sunday (19 August).

Lee touched on the controversial subject during the English portion of the annual National Day Rally (NDR), which was delivered at Institute of Technical Education (ITE) Central in Ang Mo Kio. “This is the only way to recycle the land and ensure that all our descendants can buy new BTO (built-to-order) flats of their own,” said the 66-year-old.

“If instead the Government had sold you the flat on freehold, i.e. in perpetuity, sooner or later we would run out of land to build new flats for future generations…Our society would split into property owners and those who cannot afford a property. That would be most unequal, and socially divisive.”

The Prime Minister added that there is also a practical reason for not extending HDB leases: after a century, the concrete will have deteriorated in the tropical climate, while the mechanical and electrical systems would be “obsolete”. All this would translate to high maintenance costs.

“So it is better to let the leases expire, take the blocks back, demolish them and rebuild afresh…we can rebuild newer, better, more liveable flats, blocks, and townships, more suited to what our grandchildren and great- grandchildren will want to live in,” said Lee.

Lee, who was delivering his 15th NDR speech, added, “Very few of today’s HDB owners will outlive their leases.”

With Singapore’s oldest flats at 52 years old, the Housing and Development Board estimates that the scenario will only apply to less than 2 per cent of households, including those who have bought resale flats.

“And even if you have to return your old flat at the end of its lease, don’t worry, because the Government will help you get another flat to live in,” said Lee.

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