As the government ramps up building two-room HDB flats, property experts are urging authorities to review the studio apartment scheme, revealed media reports.
This is because two-room flats and studio apartments are similar in layout and sizes but have different lease periods.
“One consideration is whether the Government should totally do away with studio apartments and move some of the desirable features of studio apartments into two-room flats for the elderly,” said Nicholas Mak, Executive Director of Research & Consultancy at SLP International Property Consultants.
“Another suggestion is for the Government to extend the lease for studio apartments, but by doing this the Government is minimising the difference between studio apartments and two-room flats. So it again raises the question that if you are going to make these two products very similar to each other, is there even a need to differentiate between them in the future?”
Studio apartments offer a 30-year lease while two-room flats have a 99-year lease. Also, studio apartments cannot be resold in the open market, and must be returned to the HDB upon the owner’s death.
Real estate firm PropNex noted that the shorter lease may make studio apartments less popular among seniors, which is their target market.
“Many elderly, when they want to buy a HDB flat, they will consider, ‘what if I pass on, can I leave this property to my next generation?’ But if the lease is only 30 years, then many of them may not feel that comfortable. They will probably feel that ‘this property does not belong to me, I can’t pass on to my next generation’. That’s one of the biggest setbacks,” shared PropNex Key Executive Officer Lim Yong Hock.
Studio apartments within the mature MacPherson area are in the range of $114,000, while prices of two-room flats in the non-mature town of Bukit Batok stand at $80,000, exclusive of grants.
The housing board explained on its website that two-room flats and studio apartments are “not similar flat offerings”. Hence, it is inappropriate to directly compare their prices.
For instance, the two flat types may be situated in different locations. Generally, studio apartments can be found in mature estates, near transport nodes and amenities.
Romesh Navaratnarajah, Singapore Editor at PropertyGuru, edited this story. To contact him about this or other stories email romesh@propertyguru.com.sg
