Please use this identifier to cite or link to this item: https://scholarbank.nus.edu.sg/handle/10635/219643
Title: LEASE DECAY OF HDB FLATS AND THE LEASE BUYBACK SCHEME
Authors: LEONG JING WEN JUSTINA
Keywords: Real Estate
RE
Lum Sau Kim
2016/2017 RE
Issue Date: 26-May-2017
Citation: LEONG JING WEN JUSTINA (2017-05-26). LEASE DECAY OF HDB FLATS AND THE LEASE BUYBACK SCHEME. ScholarBank@NUS Repository.
Abstract: This paper aims to empirically investigate the rate of lease decay of resale HDB flats. With the ageing of HDB leases and the implementation of the Lease Buyback Scheme (LBS), the erosion of housing equity from lease decay becomes a pressing issue to be addressed. A fixed effects hedonic pricing model is employed in this study. Empirical evidence suggests that the rate of lease decay does not conform to the Singapore Land Authority (SLA) leasehold table, which is assumed to be the basis of calculation for the LBS proceeds. Housing prices generally fall from a remaining lease of 99 to 78 years. However, the trend reverses and prices start to increase from a remaining lease of 77 to 49 years. The implied discount rates are also computed based on the empirical results. Discount rates generally showed a similar trend to the SLA Table and increase from a remaining lease of 98 to 81 years. However, as the lease decays from 80 to 49 years, discount rates start to decrease. Discount rates have also been on a decline over the years. These findings perhaps indicate that households are valuing the future consumption power of their inheritors more importantly. The empirical results do not correspond to the SLA Table and there is an information asymmetry between HDB and flat owners over the method of calculation of the LBS; there needs to be a more transparent and dynamic method of computing the LBS proceeds to boost take-up rate.
URI: https://scholarbank.nus.edu.sg/handle/10635/219643
Appears in Collections:Bachelor's Theses

Show full item record
Files in This Item:
File Description SizeFormatAccess SettingsVersion 
Leong Jing Wen Justina 2016-2017.pdf3.04 MBAdobe PDF

RESTRICTED

NoneLog In

Page view(s)

17
checked on Sep 22, 2022

Download(s)

9
checked on Sep 22, 2022

Google ScholarTM

Check


Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.