More than half of all new two-room flats were bought by senior citizens since the two-room Flexi Scheme was rolled-out in 2015, reported The Straits Times citing the Housing and Development Board (HDB).
About 28,900 units of the two-room flexi flats were offered by the HDB since the first November 2015 sales exercise until 31 December 2019. Since then, 85% or 21,348 of the 25,106 units that were offered in 27 completed sales exercises were booked.
Of these, 55% were booked by seniors aged 55 and above, while families and singles booked the rest.
Nine in 10 of the senior buyers opted for short leases of 15 to 45 years, in five-year increments.
In fact, 92% or 10,705 of the units acquired by seniors were on short leases.
Flats with 40-year lease emerged as the most popular at 3,339 units, followed by those with 35-year lease and 30-year lease at 2,903 units and 1,844 units, respectively.
Only 179 buyers opted for the shortest lease of 15 years.
Shorter leases are cheaper. In the November sales exercise, for instance, a 15-year two-room flexi flat in Tengah cost from $39,000 to $58,000, while a similar unit with 99-year lease is priced from $110,000 to $167,000.
Huttons Asia director of research Lee Sze Teck believes the take-up rate for the two-room flexi units is “reasonable”, noting that the government’s “policy of encouraging the elderly to downsize after family members move out is actually working”.
Foo See Yin, 78, and Low Choon Moi, 76, sold their four-room unit in Khatib for around $420,000 before relocating into their two-room flexi flat in 2017 because their three children no longer 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 Foo.
Lee noted that 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”.
But while the take-up rate of two-room flexi flats is positive, ERA Realty head of research and consultancy Nicholas Mak said it is still lower than those for bigger flats.
This comes as some buyers are put-off by the shorter lease, since the unit would not have a resale value.
Seniors purchasing two-room flexi units may also avail of the Silver Housing Bonus, which is a cash bonus of up to $20,000 per household, when they utilize their net sale proceeds when downsizing their homes to top up their CPF Retirement Accounts and join CPF Life.
Not all seniors, however, may qualify, said Mak. This is because the previous home of the senior should have an annual value of not more than $13,000 only.
Meanwhile, HDB revealed that two-room flexi flats will continue to be offered in Build-To-Order projects islandwide.
Aside from the flexible length of leases, these units also offer senior-friendly features, including a lower kitchen counter-top for wheelchair users, and grab bars for all short-lease two-room flexi flats.
Lastly, in selected projects, buyers of two-room flexi flat with short-lease may choose the Optional Component package, which feature senior-friendly fittings, such as a folding partition separating the bedroom and living room.
Buyers may also use the space to accommodate a caregiver, or for entertaining visitors.
The Optional Component package will allow senior buyers of short-lease flats to receive a unit in move-in condition, complete with lighting and fittings, including built-in kitchen cabinets and wardrobes.