We love these very simple graphics by Channel NewsAsia’s Kenneth Choy that we’re going to share them here (we absolutely adore you, Kenneth).
The information in those graphics is the only information revealed by Prime Minister Lee Hsien Loong at today’s National Day Rally regarding the new HIP II, and VERS.
VERS, where the government makes an offer to buy back old HDB flats that have 29 years of lease remaining appears to be a populist move after public anger that HDB flats will be worthless when their lease expires.
The government really has no good reason to buy back these flat – you should have known that when you signed the contract for a 99-year HDB flat lease that the government will get the property back for free when the lease expires.
There’s been no indication of how much exactly these flat-owners will be receiving, and taxpayers are likely to be called up on fund the buy-backs, aka the populist move to quell public discontent.
Let’s assume that the expectation is most flat-owners will voluntarily accept the government’s compassionate offer to buy back the lease of their flats when those flats reach 70 years old because the alternative is they live there for another 20 years and get zero dollars back and no priority for buying a new public housing dwelling.
Why then is the government embarking on big upgrading projects when these old HDB estates reach 60 years old?
Such upgrading takes years doesn’t happen overnight – it can take around to 3 years complete.
So, hundreds of millions down the drain to upgrade a HDB estate that will likely be torn down in 10 years?
How does that make sense?
This is all the information available at this time about HIP II and VERS, until the government at its own choosing decides to reveal more details.
Is there something else at play here that the public is not privy to?
All these boom and bust building works and government acquisitions – they remind you of China’s soaring GDP growth which was deemed superficial and artificial inflation of GDP and unsustainable in the long run.
Hopefully, that is not what the Singapore government has in mind, bearing in mind that a component of ministers’ salaries is pegged to Singapore’s GDP growth.