> At the end you give the land back to the government
I hear this complaint a lot about Singapore, especially from Australians, who seem to forget that most of SG's 99-year leases are until the 2070's.
Meanwhile nearly every single property in the Australian Capital Territory has its 99 year lease finalised in the next decade. Most Australians generally don't want to have an honest conversation about those people returning their homes to the government and seem to pretend the leasehold system doesn't even exist.
I get the feeling that leasehold and the returning of property to their rightful owners won't stand up well in a democratic society where the majority decides.
I find the 99 year lease thing in Singapore fascinating so have done a bunch of background reading on it. You are correct that most of the leases are good until the late 2000's (since most construction happened in the 1970-90's, but there are some properties built in the 1960's that are on the "downhill slope" of the lease - basically the remaining time is less than the average adult life expectancy (say buy at 30 and live another 60 years).
As you said, it's going to be interesting when these start to "expire" in large quantities. What the conversation has been in Singapore so far:
- the gov't will "buy out" the remaining lease for some developments and put up new housing. Existing owners will get a payment and a new subsidized house. However, the gov't has said this will be rare (the problem was when this started is people assumed all owners would get this deal so housing prices jumped, even on properties with little lease life left).
- if you do an NPV analysis of the value of a 99-year lease, it's pretty much worth the same as a freehold lease for the first couple of decades, then it starts to be priced as a true lease - e.g. what would the NPV of renting it be for X years? that's the purchase price. So if a home rents for $3k per month and has 2 years of lease left, the purchase price would be $72k (minus any time value of money)
- the Singapore gov't has also said that it will be proactively initiating the lease-end process 5-10 years prior to avoid masses of people dealing with expired leases at the same time.
I hear this complaint a lot about Singapore, especially from Australians, who seem to forget that most of SG's 99-year leases are until the 2070's.
Meanwhile nearly every single property in the Australian Capital Territory has its 99 year lease finalised in the next decade. Most Australians generally don't want to have an honest conversation about those people returning their homes to the government and seem to pretend the leasehold system doesn't even exist.
I get the feeling that leasehold and the returning of property to their rightful owners won't stand up well in a democratic society where the majority decides.