Is housing (HDB flat) an appreciative asset? Why would i want to sell my flat assuming peaceful living condition in the long term?

Supply and demand.

Short term, it might be an appreciative asset.

When the lease hits 0, the value goes to zero.

You spend 3-5 years waiting for BTO and sell it when it hits 94 years, the time difference is pretty much the same. When you wait 3-5 years, you expense on rent as well. The savings is not really that significant considering resale has higher grant amounts.

In terms of dollar to dollar comparison, it is financially cheaper to buy a home as compared to rent an entire unit outright with regards to public housing. This advantage is largely due to the policy restrictions for public housing ownership in Singapore, as such, until you hit 35 or commit to a marriage, you just need to expect to pay more for rental in Singapore.

I view the first home as a place you stay, it is an expense, not an asset. The only asset it carries is the potential rental yield, but for most people, they have to move out or sacrifice privacy. As well as the right to trade the remaining lease, which is subject to market supply and demand.

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Hi Su!

It really does depend on your perspective, whether you view a flat as a long term investment or a home for you to stay for many years.

In land constrained Singapore, properties are generally viewed as an appreciative asset. Most people choose to sell of their BTOs after five years, with 94 years remaining in their lease hoping to make a profit.

However, this is largely dependent on the market when you choose to sell your flat, how many years of lease you have left, as well as the condition of your BTO.

There are of course inconveniences involved, such as having to look for a new place, selling off the old, and moving. If the profit made is substantial, I guess some people don't mind going through the trouble.

Hope this helps! :)