To provide more housing options for elderly Singaporeans, the Ministry of National Development (MND) and Housing and Development Board (HDB) introduced the 2-room Flexi Scheme on Wednesday, 19 August.
The unified scheme, which replaces the existing 2-room and studio apartment schemes, was first mooted by National Development Minister Khaw Boon Wan back in March 2015 at the Committee of Supply debate, and subsequently incorporated feedback and suggestions from the public.
Elderly citizens aged 55 and above can now choose to buy a 2-room Flexi flat on shorter leases of between 15 and 45 years, in five-year increments, as long as it covers them and their spouse until they are at least 95 years old.
According to property agency PropNex Realty, the scheme’s biggest advantage is that it allows seniors another option at the entry level, to commit to purchasing a 2-room flat and unlocking more cash from the sale of their existing flat.
However, interested applicants will face a critical decision on whether to take up the scheme as it does not allow homeowners to sell the flat in the open market, noted PropNex CEO Mohamed Ismail.
“This effectively means that the buyer will not be able to enjoy the possible capital appreciation in future. Nonetheless, this scheme will cater to seniors with a lower budget who just want to have a roof over their heads in their twilight years,” he added.
In terms of pricing, Mr Khaw revealed in a recent blog post that shorter lease flats will be cheaper than longer lease flats. But when PropNex compared the prices of the varying leases, it found that the lower the lease, the higher the price per lease year. This is mainly down to construction cost, which is constant regardless of the length of lease, revealed PropNex.
The 2-room Flexi Scheme will be launched in the September 2015 Build-to-Order (BTO) exercise. At least 40 percent (subject to a minimum of 100 units) of such flats in a BTO project will be made available to the elderly.
Meanwhile, HDB plans to release over 70 BTO projects with 2-room Flexi flats across Singapore in the next five years.
For more information, the public can contact the HDB customer service line at 1800-866-3066.
Romesh Navaratnarajah, Singapore Editor at PropertyGuru, wrote this story. To contact him about this or other stories email romesh@propertyguru.com.sg
