March 20, 2007


Return of two-room flats is a boon to many

By Tan Hui Yee

HOME SWEET HOME: Madam Ouw Ah Chew and her husband Kam Yew Seng are thrilled with their new two-room flat in Jurong West. They were among the first to get the keys to their flats after the Government said last year it would build two-room units again. -- JOYCE FANG

MADAM Ouw Ah Chew beamed as she entered her new Housing Board flat with her husband Kam Yew Seng.

Within the 550 sq ft Jurong West flat, there is one bedroom, a toilet and a small kitchen behind a cosy living room.

She admired the wooden flooring and marvelled at the view from the bedroom, which has windows on opposite ends.

'I never thought that I would be able buy a new flat at the age of 50,' the housewife told The Straits Times.

In its earlier incarnation, her new home was part of a five-room flat, one of thousands in the HDB's unsold stock. It was divided up last year to create smaller units for low-income households.

Madam Ouw and her husband, a 56-year-old fishmonger, were among the first to get the keys to their flats after the Government announced last year that it would build two-room units again.

The HDB stopped building two- and three-room flats from the 1980s as people flocked to bigger homes. Three-room flats were reintroduced in 2004.

Smaller flats have attracted rising prices on the resale market and, against the backdrop of the growing income gap, the Government introduced measures like additional grants to give low-income families help with housing.

New two-room flats are for households earning not more than $2,000 a month.

The first three batches were located in newer estates - 100 converted units in Jurong West, while another 84 converted units are coming up in Sengkang.

In addition, 86 new two-room units will be built from scratch in Sengkang, as part of an upcoming housing estate with different types of homes.

The flats in Sengkang and Jurong West cost between $59,000 and $96,000.

These will add to about 29,000 existing two-room flats, most of which are rented out by the HDB to low-income households.

Housing agents say the new flats have not dented demand for resale units. It takes only a week or two for a resale unit to find a buyer.

'Demand is always higher than supply,' said senior division director Eric Cheng of property agency PropNex. The flats are also snapped up by people who can afford bigger homes but prefer to keep their financial commitments down.

Data from the HDB also indicates that the new two-room units are being bought by people who may not have been able to afford new homes previously.

About 45 per cent of those applying for two-room flats in Jurong West had household incomes of less than $1,000 a month. For the flats built from scratch in Sengkang, the figure was higher - about two-thirds.

Older people also made up a significant portion of applicants. About one-third in Jurong West and half of those in Sengkang were 55 years and older.

They include people like cleaning supervisor Richard Lee, 56, who tried applying for a 30-year-leasehold studio apartment for the elderly about two years ago, but was rejected because he was a few days short of his 55th birthday.

He said: 'I wanted to apply for studios elsewhere. But a friend told me: 'You'd better not. What will you do if you don't die after 30 years?''

So he and his wife, 47-year-old Irene Boo, opted for a 99-year-leasehold two-room flat instead, a step down from the three-room unit they live in now.

'The three-room flat is a waste of one room, as we just put clothes in there now,' he said. The couple have no children.

Their new Sengkang flat will be ready by 2011.

A two-room flat will also be the retirement home for Madam Ouw and her husband. They have been sharing a four-room flat with one of their two daughters and her growing family.

Happy to get their new place just a stone's throw from their current home, she said: 'This will be our little nest.'

Sociologist Paulin Straughan observed that it is more common now for older couples to live alone after their married children move out.

But this need not leave the elderly isolated, as the new two-room flats are in blocks with bigger flats and younger households.

Dr Straughan said: 'Many elderly couples living alone do count on neighbours for instrumental help and social support. In turn, the more able elderly may also be a source of child care support for families with young children.'

According to the HDB, a fair number of households with three or more people were applying for two-room flats, which come with just one bedrooom. About 15 per cent or more of the applicants for the converted Jurong flats and brand-new Sengkang flats did so.

Given that it may be a squeeze for more than two people to live in such flats, the president of the Society of Financial Service Professionals, Mr Leong Sze Hian, said the figure indicated these households found three-room units beyond reach.

He suggested that their housing grants - which range from $5,000 to $20,000, depending on the household's income - be adjusted to take into account other details like household size, so that bigger households receive more help.

People like Mr Mohamed Yunos Fakir Mohamed, 38, and his wife Salah Wati Saleeh, 37, are not complaining.

The new two-room flats were a godsend for the couple, who were left homeless last year when they realised they could not get a home loan after selling their three-room flat in Hougang.

The banks refused to entertain them because of previous debts, and the HDB also said no as Mr Mohamed had received two previous loans from it.

They moved to a friend's spare bedroom in Toa Payoh, together with their freezer, washing machine and other items.

The couple, who get by on Mr Mohamed's monthly income of $1,000 as a sales assistant, juggle rent of $300 a month and debt repayment of $500 a month, on top of living expenses.

They will be able to pay for a new two-room flat entirely with their Central Provident Fund savings of about $100,000 and still have money left over.

They expect to move into their two-room flat in Sengkang sometime in 2011, when it is ready.

They cannot wait. They have already gone to the area more than five times to check out their future estate.

[email protected]