92% of them opted for short leases of 15 to 45 years, with 40-year lease being most popular
Slightly more than half of all new two-room flats have been bought by seniors aged 55 and above since the two-room Flexi Scheme was introduced in 2015.
Of these senior buyers, about nine in 10 opted for short leases ranging from 15 to 45 years, in five-year increments, with the 40-year lease being the most popular, according to the Housing Board yesterday.
HDB offered about 28,900 units of the two-room flexi flats between the first November 2015 sales exercise and Dec 31 last year.
Since then, 85 per cent or 21,348 of the 25,106 two-room flexi flats offered in 27 completed sales exercises have been booked, said HDB.
Of these units, 55 per cent were booked by seniors aged 55 years and above, while the rest were booked by families and singles.
Among the flats purchased by seniors, 92 per cent or 10,705 units were on short leases, while the remaining were 99-year leases.
The 40-year lease was the most popular at 3,339 units. This was followed by the 35-year lease at 2,903 units and the 30-year lease at 1,844 units. Only 179 buyers opted for the shortest lease of 15 years, with the oldest buyer being 99 when applying for a flat with such a lease.
Buyers pay less for a flat with a shorter lease. For example, in the November sales exercise, a two-room flexi flat with a 15-year lease in Tengah cost between $39,000 and $58,000, while the same flat with a 99-year lease cost between $110,000 and $167,000.
Mr Foo See Yin, 78, and Madam Low Choon Moi, 76, said they sold their four-room flat in Khatib for about $420,000 before moving into their two-room flexi unit in 2017. Their three children aged 36 to 57 do not live with them.
“Our previous home was too big for the two of us and we’re already so old, so we decided to buy a smaller home,” said Mr Foo. Their flat in Kampung Admiralty cost about $107,000.
Mr Lee Sze Teck, Huttons Asia director of research, said the take-up rate for the two-room flexi flats is “reasonable”. “It appears that the policy of encouraging the elderly to downsize after family members move out is actually working.
“This is good for the entire market, as the bigger flats could be put up for sale for other buyers who need more space, instead of HDB building bigger flats,” he said.
While ERA Realty head of research and consultancy Nicholas Mak agreed the take-up rate is positive, he noted that this is still lower compared with that for larger flats.
He said that this could be because some buyers may not be attracted to the shorter lease, as the flat would not have a resale value.
Seniors who buy two-room flexi flats may also apply for the Silver Housing Bonus – a cash bonus of up to $20,000 per household – when they use their net sale proceeds when downsizing their property to top up their CPF Retirement Accounts and join CPF Life.
However, Mr Mak said not all seniors may qualify. This is because the annual value of their previous home cannot exceed $13,000.
Since the bonus was introduced in 2013, 807 households have benefited from the scheme as of Dec 31 last year, according to HDB.
OPTIONAL COMPONENT PACKAGE FOR SOME FLEXI FLATS
Two-room flexi flats will continue to be included in Build-To-Order projects islandwide, the Housing Board said yesterday.
These include sites in Choa Chu Kang, Pasir Ris, Sembawang, Tengah and Toa Payoh in the upcoming February and March sales exercises, it added.
Apart from allowing seniors the flexibility of choosing the length of their leases, the two-room Flexi Scheme also offers senior-friendly features such as a lower kitchen counter-top for wheelchair users.
All short-lease two-room flexi flats also include grab bars.
In selected projects from the February sales exercise, two-room flexi units with flexible space will be offered. Those who buy a short-lease two-room flexi flat with flexible space may opt for the Optional Component package, which will include senior-friendly fittings including a folding partition separating the living room and bedroom.
The Optional Component package will enable senior buyers of short-lease units to receive a flat in move-in condition, complete with lighting and fittings such as built-in kitchen cabinets and wardrobes.
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