HDB flat for sale in 2025: $1,300,000 only!

“The greatest shortcoming of the human race is our inability to understand the exponential function.” – Prof. Albert Bartlett.

(If you haven’t watch Prof. Albert Bartlett‘s video before, click on the link.)

“Flat prices would probably go up, they will go up by 1 per cent, 2 per cent, or whatever…They will just keep on going up if the economy recovers as people expect, and if confidence returns, but affordability will always be there.” – Minister for National Development Mah Bow Tan, 3 September 2009, Straits Times, when asked about HDB resale prices.

“Before you buy a property, you must remember three things – think, think and think… Think carefully, Think long term, Think about the unexpected.” Minister for National Development Mah Bow Tan, 3 September 2009, Straits Times, giving his best piece of advice.

Later in that year…

“Nobody, no matter how prescient, no matter how clever, would have been able to predict that this is what is going to happen this year. All of us were caught off-guard…I did not expect the prices to go up. But the point is, are we able to respond to this change. And the answer is yes.” - Minister for National Development Mah Bow Tan, 29 December 2009, Channelnewasia.

Following his advice to think about the unexpected…:

• HDB new 4-room flat in 1980: $25,000
• Resale price of the same HDB 4-room flat in 2010: $325,000
• Annual growth rate: 9.2% over 30 years
• Doubling time: 7.6 years (If you haven’t watch Prof. Albert Bartlett‘s video before, click on the link.)

Assuming all factors remain constant, this same HDB flat is projected to cost:

• $650,000 in 2018 with 60 years of leasehold left
• $1,300,000 in 2025 with 53 years of leasehold left.
• $4,900,000 in another 30 years in 2040, with 38 years of leasehold left.

Will it cost nearly $5 million 30 years later? Of course not, people would have opted for private housing a long time ago. However, if things do not change, the above is the kind of direction we are heading to. This is just a simplistic projection using the figures over the last 30 years into the future, trying to figure out what “They will just keep on going up if the economy recovers as people expect, and if confidence returns, but affordability will always be there,” means.

“Every Singaporean who owns a flat can double his value in today’s terms within the next 15 to 20 years. In other words, in the next 20 years, we can make everybody worth twice as much, at least.”- PM Lee Kuan Yew, National Day Rally, 1990

Exactly 20 years later after the above commitments were made, what will the government say to Singaporeans now? If the same can be said to Singaporeans today, using the same example above, the same flat will cost at least:

• $650,000 in 2030 with 49 years of leasehold left
• $1,300,000 in 2050 with 29 years of leasehold left.

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