MND looking into more flexible lease tenures for two-room flats

SINGAPORE — More flexible lease tenures and lease terms, which are currently only available under the Studio Apartment Scheme, could soon be offered for two-room flats.

National Development Minister Khaw Boon Wan said his ministry is looking into this idea, which several Members of Parliament have called for, to meet the needs of different groups.

Studio apartments have similar layouts and sizes to two-room flats but are cheaper because they come with shorter leases. This flat type was introduced in 1998 to provide options for seniors who wanted to right-size, as the Housing and Development Board (HDB) had stopped building two-room flats then.

Now that the HDB is building two-room flats again, Mr Khaw said they could consider the suggestion of shorter leases to “rationalise the studio apartment and two-room flat schemes”. “For example, if we have a new two-room flat scheme, offering varying lease tenure and lease terms, it may allow us to cater to different groups with varying needs, and in the process unify both schemes,” he added.

Mr Seah Kian Peng (Marine Parade GRC) had suggested such a move to give Singaporeans at different stages of life the option of owning a flat at lower prices.

Speaking during his ministry’s Committee of Supply debate today (March 10), Mr Khaw said: “MND and HDB are working on this, and will also gather inputs from the public.”

Property analysts TODAY spoke to suggested the Studio Apartment Scheme be scrapped, in exchange for greater lease flexibility for two-room flats.

The re-introduction of two-room Build-to-Order flats calls into question the necessity for studio apartments, said SLP International Property Consultants executive director of research and consultancy Nicholas Mak.

Elderly-friendly features in studio apartments, such as wider doorways and bathroom handrails, can be easily incorporated in new two–room flats, he added.

Mr Chris Koh, Director of Chris International, said some senior citizens are concerned about their fates if they outlive the current 30-year lease under the Studio Apartment Scheme, with others having the desire to leave the flat for their children.

“I would increase the lease to 60 years, giving these elderly people the assurance that they will still have their flat and allow the flat to also be passed down to the next generation,” suggested Mr Koh. “Because it is a 60-year lease, you can adjust the price (to) make it lower than that of a 99-year lease two-room flat.”

Century 21 chief executive Ku Swee Yong, however, pointed out that flexibility is provided under the Lease Buyback Scheme — elderly residents can choose lease tenures that best suit their needs and sell the rest back to HDB.

To cater to the group of seniors who are worried about the financial burden of buying a flat, he suggested: “Why not charge them a monthly lease for two-room units ... so it becomes a rental flat?”