reporter2
22-06-18, 20:10
Small Change
Tendering out plots with 60-year lease may be the way to go
Loh Keng Fatt
News Editor
Jun 17, 2018
Shorter tenures could be more in keeping with the times and realities
Almost every day, it seems, another housing estate or condo throws its hat into the en bloc ring.
It seems like not many have much of an attachment to their home, not when there is a windfall to be made from any upturn in market sentiment.
And those who keep tabs on property cycles - to gauge when to buy their first home or invest in a second unit - will know that the en bloc fever reliably comes round every time the market rebounds from a prolonged lull.
Of course, residents may also want to cash out because the upkeep of an older project can be prohibitive.
Witness Golden Mile Tower in Beach Road, where all four lifts recently went kaput, requiring people to walk all the way up to the 22nd floor.
Condos also have to spend to keep other facilities like swimming pools in working order and refurbish facades so as not to be overshadowed by posher projects in the vicinity.
But even residents of newer condos have succumbed to cashing in.
Cairnhill Heights was built in the 1990s while 11 Balmoral Road came up in the mid-1990s.
Completed in the late 1980s, Makeway View in Newton is also not that long in the tooth.
Neither are Hollandia and Eunos Mansion, built in the mid-1980s, while Ivory Heights and Florence Regency are privatised HUDC developments from the 1980s.
Only Pearlbank - whose 99-year leasehold tenure started from June 1970 - bucked the trend.
Which begs the question: Should the Government perhaps not sell all plots in its land sales programme under 99-year leases?
Is a lease like 60 years more in keeping with the times and realities?
A shorter tenure, not uncommon in many other Asian countries, also means that the entry cost for a first-time buyer is lower, since the land cost should be lower than that of a 99-year plot.
With the recent Eunos Court Build-To-Order exercise pricing four-room 99-year leasehold HDB units up to $590,000 and even similar-leasehold two-room condos in suburban areas approaching a million dollars, the dream of acquiring a home, especially for younger Singaporeans, is not easy to attain.
Even if the norm is still to go for 99-year leases, there should be some plots that are tendered out at 60-year terms to allow for greater flexibility, innovation and experimentation in the market.
This would also recognise some socioeconomic realities like the greater number of singles, families with fewer children, even none, and a growing elderly population who may want to switch to a cheaper home with a shorter lease.
The ageing population - 65 years and above - is expected to reach 900,000 by 2030.
The Housing Board may want to offer shorter leases for a greater variety of new flats.
Singaporeans aged 55 and above can already choose a short lease of between 15 and 45 years, in five-year increments, for two-room Flexi units. The chosen lease has to cover them up to the age of at least 95.
But there are conditions in this scheme, which started in 2015, with no open sale on the market and rental of even a room.
Since its introduction in the November 2015 sales exercise, the HDB has offered about 10,000 two-room flexi flats, The Straits Times reported in March last year.
Why not expand the scheme to bigger flat sizes, too? For starters, a 60-year target sounds reasonable.
The proposal for shorter leases is not entirely new, given that it has been aired by some people every now and then, mainly as one way to make housing more affordable.
The millennials may be more open to shorter-leasehold properties, compared to their parents and grandparents.
In fact, in some cities around the world, they have also been in favour of renting rather than be sucked into the grind of paying for pricey homes.
Being well-read, many are aware that homes in some densely populated countries such as China have tenures of 50 years.
And if they still hanker for a windfall from selling en bloc, even owners of a 60-year leasehold condo could still take a crack at it 20 to 30 years down the road, similar to the age of many properties going for collective sales now.
Tendering out plots with 60-year lease may be the way to go
Loh Keng Fatt
News Editor
Jun 17, 2018
Shorter tenures could be more in keeping with the times and realities
Almost every day, it seems, another housing estate or condo throws its hat into the en bloc ring.
It seems like not many have much of an attachment to their home, not when there is a windfall to be made from any upturn in market sentiment.
And those who keep tabs on property cycles - to gauge when to buy their first home or invest in a second unit - will know that the en bloc fever reliably comes round every time the market rebounds from a prolonged lull.
Of course, residents may also want to cash out because the upkeep of an older project can be prohibitive.
Witness Golden Mile Tower in Beach Road, where all four lifts recently went kaput, requiring people to walk all the way up to the 22nd floor.
Condos also have to spend to keep other facilities like swimming pools in working order and refurbish facades so as not to be overshadowed by posher projects in the vicinity.
But even residents of newer condos have succumbed to cashing in.
Cairnhill Heights was built in the 1990s while 11 Balmoral Road came up in the mid-1990s.
Completed in the late 1980s, Makeway View in Newton is also not that long in the tooth.
Neither are Hollandia and Eunos Mansion, built in the mid-1980s, while Ivory Heights and Florence Regency are privatised HUDC developments from the 1980s.
Only Pearlbank - whose 99-year leasehold tenure started from June 1970 - bucked the trend.
Which begs the question: Should the Government perhaps not sell all plots in its land sales programme under 99-year leases?
Is a lease like 60 years more in keeping with the times and realities?
A shorter tenure, not uncommon in many other Asian countries, also means that the entry cost for a first-time buyer is lower, since the land cost should be lower than that of a 99-year plot.
With the recent Eunos Court Build-To-Order exercise pricing four-room 99-year leasehold HDB units up to $590,000 and even similar-leasehold two-room condos in suburban areas approaching a million dollars, the dream of acquiring a home, especially for younger Singaporeans, is not easy to attain.
Even if the norm is still to go for 99-year leases, there should be some plots that are tendered out at 60-year terms to allow for greater flexibility, innovation and experimentation in the market.
This would also recognise some socioeconomic realities like the greater number of singles, families with fewer children, even none, and a growing elderly population who may want to switch to a cheaper home with a shorter lease.
The ageing population - 65 years and above - is expected to reach 900,000 by 2030.
The Housing Board may want to offer shorter leases for a greater variety of new flats.
Singaporeans aged 55 and above can already choose a short lease of between 15 and 45 years, in five-year increments, for two-room Flexi units. The chosen lease has to cover them up to the age of at least 95.
But there are conditions in this scheme, which started in 2015, with no open sale on the market and rental of even a room.
Since its introduction in the November 2015 sales exercise, the HDB has offered about 10,000 two-room flexi flats, The Straits Times reported in March last year.
Why not expand the scheme to bigger flat sizes, too? For starters, a 60-year target sounds reasonable.
The proposal for shorter leases is not entirely new, given that it has been aired by some people every now and then, mainly as one way to make housing more affordable.
The millennials may be more open to shorter-leasehold properties, compared to their parents and grandparents.
In fact, in some cities around the world, they have also been in favour of renting rather than be sucked into the grind of paying for pricey homes.
Being well-read, many are aware that homes in some densely populated countries such as China have tenures of 50 years.
And if they still hanker for a windfall from selling en bloc, even owners of a 60-year leasehold condo could still take a crack at it 20 to 30 years down the road, similar to the age of many properties going for collective sales now.