Older buyers of two-room flexi flats prefer shorter lease
The vast majority of seniors who booked two-room flexi flats opted for shorter leases of between 15 and 45 years, with the 40-year lease being the most popular.
Of these 20,185 seniors, about nine in 10 chose lease lengths of 30 to 45 years, the Housing Board said in an update on Sept 27. Most of the remaining seniors opted for shorter leases of 20 to 25 years.
Only 298 older buyers chose to go with the shortest lease of 15 years, while more than 1,700 seniors went with a 99-year lease.
HDB said this housing option allows seniors to monetise their existing properties and downsize to a smaller two-room flexi flat. This would provide them with additional retirement income.
Two-room flexi flats are offered with shorter leases between 15 to 45 years – in five-year increments – as long as the lease covers the youngest applicant up to the age of 95. The shorter leases mean buyers pay less.
In the June Build-To-Order (BTO) sales exercise, prices for a two-room flexi flat with a 15-year lease started at $32,000 at Marsiling Peak I and II in Woodlands and $70,000 at Holland Vista in Queenstown. Those same flats with a 99-year lease cost from $94,000 in Woodlands and $209,000 in Queenstown.
HDB said almost all short-lease two-room flexi flats were priced below $200,000, and the majority of such flats in non-mature estates were priced below $100,000.
Two-room flexi flats, which are between 36 to 46 sq m, have to be paid for fully upfront with cash or Central Provident Fund money, and cannot be resold or rented out.
Owners who no longer need the flat can return it to the HDB and get a refund of the value of the remaining lease.
As at June 30, about 53,900 two-room flexi flats had been launched for sale, after they were introduced in 2015. Around 71 per cent, or 38,378 flats, have been booked by home buyers, and keys to 22,822 units have been handed out so far, said the board.
Of these buyers, 57 per cent were seniors aged 55 and above. Singles and families made up the remaining 43 per cent.
Housewife Tan Kah Ngoh, 64, and her husband Kenny Leung, 68, who works in the food and beverage sector, sold their five-room flat in Yishun before moving into their two-room flexi unit in the same estate in 2023.
Their new flat, which they bought on a 45-year lease, cost around $100,000 – the price includes a pro-rated resale levy, elderly fittings and fees such as the buyer’s stamp duty.
“Our children are grown-up, so it is a good time for us to rightsize and enjoy ourselves. Cleaning is also easier in a smaller house,” she said.
Madam Tan, who declined to reveal the selling price of her previous flat, said their cash proceeds are set aside for savings, rainy days and investments. The couple spent less than $10,000 on renovations for their current flat.
Eligible seniors can tap Government subsidies such as the Silver Housing Bonus, which gives them a cash bonus of up to $30,000 when they sell their existing flat and use the proceeds to top up their CPF Retirement Account.
More than 2,300 households have benefited from the scheme as at June 30, HDB said.
In the upcoming BTO sales exercise in October, the board will launch two-room flexi flats in Ang Mo Kio, Bedok, Bukit Batok, Jurong West, Kallang/Whampoa, Pasir Ris and Sengkang.
Assisted living flats, which pair senior-friendly housing design with on-site care services, will also be launched in MacPherson in Geylang. It will be the fourth project with community care apartments.
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