HDB flats will appreciate in value as long as economy grows

HDB flats will appreciate in value as long as economy grows
Dec 14, 2009 - PropertyGuru.com.sg

The value of public flats will continue to rise, as long as the Singapore economy continues to grow. With limited space, public housing appears all set to go up – with more skyscraper units to be launched.

According to Minister Mentor Lee Kuan Yew, The Pinnacle@Duxton is the tallest HDB development in Singapore with 50 storeys.

The first rental HDB blocks along Tanjong Pagar were constructed in 1963 on the site where Pinnacle@Duxton is situated. It is currently the tallest HDB project in Singapore.

Mr. Lee attributed the change to an early policy resolution to construct a home-owning society. It is what encourages Singaporeans to upgrade this asset for a better life, something which rental flats could not offer.

Moving forward, Mr Lee anticipates more of such flats to be launched.

“The Pinnacle@Duxton is therefore a good example that if the nation continues to do well, we can build more flats of this standard. But we should not make a quick profit from a resale of HDB flats,” he said.

“The rules on minimum occupation and requirement for family units nucleus are to discourage speculative purchases.”

The government could have built a condo in this central area but preferred to construct HDB flats and share the city’s growth with the people who had once rented flats in the area, said Mr. Lee in an interview.

In response to questions regarding young couples who are curious about the affordability of flats, he said that this is related to the growth of the country – if the country is performing well, prices of properties will increase.

However, if the economy declines, unemployment rate will rise but values of property and incomes will go down.

“Well, it's a very special problem we face because we can't expand the city laterally, we have to expand the city vertically. Yes, we can have more (land) reclamations but that's only about 10, 15 percent and we've reached the limit. he said. Therefore, I see more and more of the old blocks being demolished and new blocks like The Pinnacle@Duxton being built," he said.