Tuesday, 26 February 2019

HDB 2-Room Flexi Flats: 9 in 10 older buyers choose shorter leases

91% of older buyers go for that, with 40-year lease the most popular
By Lester Wong, The Straits Times, 25 Feb 2019

About nine in 10 older buyers of HDB's two-room flexi flats have chosen shorter leases, an option that frees up more cash for them.

The lease lengths range from 15 to 45 years. Only those aged 55 and above qualify to take up this option.

Started in November 2015, the scheme offers new two-room flexi flats to families and singles. The default lease length is 99 years.

But the flats are more popular with older buyers. Of the 16,169 two-room flexi units booked to date, more than half of the buyers - 54 per cent - are aged 55 and above, said the Housing Board, giving an update last Friday. Of these, the vast majority - 91 per cent - went for the shorter leases. They can also opt for senior-friendly features like grab bars in the flats, which are typically 36 sq m or 45 sq m in size.

Among these buyers were a semi-retired couple who opted for a new two-room flat with a 45-year lease after learning of the scheme.

Mr Tan Hiok San, 68, and his wife, Madam Chen Yuxian, 58, downsized from their three-room flat in Chai Chee as it made more sense financially. They had initially wanted to buy a larger flat with a 99-year lease using money they got from selling their coffee shop business.

They paid $120,000 for their 45-year-lease two-room flat. A comparable flat with a 99-year lease costs around $230,000 to $250,000.

Their new flat is in the same neighbourhood, and they moved in last April after selling their resale corner flat for $370,000.

"We don't really have much use for a 99-year lease as we have no children to pass the flat on to. Moving to a smaller flat was not a problem for us and we are still in Chai Chee, which we are very familiar with," said Madam Chen.

Among the shorter lease periods, the 40-year one was the most popular with 2,545 buyers.

This was followed by the 35-year lease with 2,154 buyers and the 30-year lease with 1,344 buyers.

The HDB said 139 buyers opted for the shortest lease of 15 years.

Mr Tan said they would have preferred a 30-year lease, as flats with shorter leases cost less than those with longer leases. But that option was not open to them, as Madam Chen would need to be at least 65 to qualify. HDB requires two-room flexi leases to cover the applicants and their spouses up to the age of at least 95.

Mr Tan said their switch has prompted some old friends and former patrons to follow suit.

"They got a little envious of how comfortable we are and decided they would do the same as well," said Mr Tan, who works part-time at a cafe in Bedok Mall.

The HDB said more two-room flexi flats will be offered in Kallang/Whampoa, Tengah and Woodlands at the next Build-To-Order sales exercise in May.

It launched 937 such flats in Jurong West and Sengkang at the sales exercise earlier this month.

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