reporter2
06-03-12, 17:08
http://www.straitstimes.com/Singapore/Story/STIStory_771817.html
budget debate
Lower flat prices by shortening leases: MPs
Published on Feb 29, 2012
By Daryl Chin
HDB flats should be sold on shorter leases to make them more affordable for young people and those on lower incomes, MPs said at yesterday's Budget debate.
Rising property prices have struck panic in the hearts of many couples and upgrading families, said Mr Gan Thiam Poh (Pasir Ris-Punggol GRC).
He added that he has noticed a 'worrying' trend in which younger people tried to buy the largest flat they could afford.
Mr Gan urged the Government to consider building more affordable two- and three-room units with shorter leases, such as 30 or 60 years. Most HDB flats are sold on a 99-year lease.
'Such options will enable them to better manage and control costs for themselves,' he said.
Mr Zainudin Nordin (Bishan-Toa Payoh GRC) also called for changes to help low-income people find housing. For example, flats could be sold on shorter leases for those with limited financial resources.
'If we make enough effort, I am confident we can think of a scheme to reduce the start-up burden on low-income families and young families, and they can be assured of a roof over their heads at a reasonable price,' he said.
MPs also called for a more flexible approach to schemes which allow the elderly to unlock the value of their homes.
Taking the podium, Mrs Lina Chiam, a Non-Constituency MP, said the recently announced Silver Housing Bonus, in which eligible elderly people are given $20,000 to downgrade to a smaller flat, was 'both impractical and unsuitable from a financial perspective'.
She said this is because a large portion of the sales proceeds would go into Central Provident Fund accounts, which might mean those in urgent need would not have access to funds outright.
Mr Hri Kumar Nair (Bishan-Toa Payoh GRC) called for greater flexibility in the Lease Buyback Scheme.
This involves the HDB buying the tail-end of an elderly person's lease. In return, the owner is supposed to receive $15,000 upfront and monthly payments for life.
Mr Nair said the scheme was not popular as it applied only to those living in three-room flats or smaller, and the monthly payouts were too paltry. Only 446 people have signed up for it since its launch in 2009.
Another problem, said the MP, was that payments are based on the present day value of the flat as determined by the HDB. This means the owner does not benefit if property prices rise. 'He in fact suffers inflation,' added Mr Nair.
He urged the Government to come up with ways to be more flexible. For example, elderly homeowners could be allowed higher cash payouts to deal with immediate needs, such as the cost of an operation or daily expenses.
Mr Zaqy Mohamad (Chua Chu Kang GRC) called for older owners of larger HDB flats to be included in the scheme.
budget debate
Lower flat prices by shortening leases: MPs
Published on Feb 29, 2012
By Daryl Chin
HDB flats should be sold on shorter leases to make them more affordable for young people and those on lower incomes, MPs said at yesterday's Budget debate.
Rising property prices have struck panic in the hearts of many couples and upgrading families, said Mr Gan Thiam Poh (Pasir Ris-Punggol GRC).
He added that he has noticed a 'worrying' trend in which younger people tried to buy the largest flat they could afford.
Mr Gan urged the Government to consider building more affordable two- and three-room units with shorter leases, such as 30 or 60 years. Most HDB flats are sold on a 99-year lease.
'Such options will enable them to better manage and control costs for themselves,' he said.
Mr Zainudin Nordin (Bishan-Toa Payoh GRC) also called for changes to help low-income people find housing. For example, flats could be sold on shorter leases for those with limited financial resources.
'If we make enough effort, I am confident we can think of a scheme to reduce the start-up burden on low-income families and young families, and they can be assured of a roof over their heads at a reasonable price,' he said.
MPs also called for a more flexible approach to schemes which allow the elderly to unlock the value of their homes.
Taking the podium, Mrs Lina Chiam, a Non-Constituency MP, said the recently announced Silver Housing Bonus, in which eligible elderly people are given $20,000 to downgrade to a smaller flat, was 'both impractical and unsuitable from a financial perspective'.
She said this is because a large portion of the sales proceeds would go into Central Provident Fund accounts, which might mean those in urgent need would not have access to funds outright.
Mr Hri Kumar Nair (Bishan-Toa Payoh GRC) called for greater flexibility in the Lease Buyback Scheme.
This involves the HDB buying the tail-end of an elderly person's lease. In return, the owner is supposed to receive $15,000 upfront and monthly payments for life.
Mr Nair said the scheme was not popular as it applied only to those living in three-room flats or smaller, and the monthly payouts were too paltry. Only 446 people have signed up for it since its launch in 2009.
Another problem, said the MP, was that payments are based on the present day value of the flat as determined by the HDB. This means the owner does not benefit if property prices rise. 'He in fact suffers inflation,' added Mr Nair.
He urged the Government to come up with ways to be more flexible. For example, elderly homeowners could be allowed higher cash payouts to deal with immediate needs, such as the cost of an operation or daily expenses.
Mr Zaqy Mohamad (Chua Chu Kang GRC) called for older owners of larger HDB flats to be included in the scheme.