More than 20 households who live in five-room and larger flats sold the tail end of their unit’s lease back to the Housing and Development Board (HDB) in the first quarter of this year under the Lease Buyback Scheme (LBS), said the Housing and Development Board (HDB).
In response to queries from CNA, the board said it received more than 200 LBS applications from owners of these bigger flats between Jan 1 and Mar 31 after the scheme was extended to them at the start of the year.
With the extension, about 34,000 households became eligible for the LBS, bringing the total number of households eligible to 130,000, said HDB.
The scheme allows elderly owners to monetise their flats while they continue to live in them by selling at least 20 years of their remaining lease back to HDB.
Ms Ow Binbing, 67, was among those who have taken up the LBS.
The former music teacher sold 53 years of the lease on her Executive Apartment (EA) in Punggol to the HDB in January. Even after doing so, she has enough years left on the lease to allow her to continue living in the flat until she is 97.
Ms Ow bought the nine-year-old unit in 2012 from the resale market for S$630,000 after selling her condominium unit in Farrer Park.
She said her LBS application was handled promptly after she indicated interest at an HDB branch office on Jan 10.
“It was very fast. On the same day at 5pm, the valuer came and took photos and video of everything. A week later, I received my valuation,” said Ms Ow.
Her 1,378 sq ft flat was valued at S$560,000, while the lease period (53 years) she intended to sell back to HDB was valued at S$269,500.
Ms Ow, the unit’s sole owner, received S$187,000 in cash including a S$5,000 bonus after first using the net proceeds to top up her CPF Retirement Account to the Full Retirement Sum, part of the scheme’s conditions.
This also meant that her retirement payouts received a boost – from S$720 to more than S$1,100 monthly.
“For me, it’s good but for others such as couples, they may not like it because the cash from the proceeds could be little depending on how much they have in their CPF retirement account. I only had to top up my CPF a bit,” she added.
Ms Ow said she had considered downsizing as she found the EA too big.
“I have to clean all of this myself. Every day I’m vacuuming, cleaning. It’s a lot,” she said.
But she struggled to find a buyer, even after having put her unit up for sale for more than a year.
“Nearly every day, I’ll have at least three families who are interested in buying my flat. I priced it between S$568,000 to S$588,000 and it couldn’t sell. There was a buyer but they couldn’t get rid of their own HDB flat,” she said.
She was reluctant to let it go for less.
“If I sold my Punggol flat for S$560,000 and spend around S$400,000 to buy a four-room flat, I think I will get back less than S$100,000 after some renovation,” she said.
She briefly considered renting out rooms in her flat but gave up the idea after hearing horror stories of tenants from her friends.
She said she is happy to age in her Punggol flat and has engaged part-time cleaners to help her with household chores.
“I’m used to this environment. All the neighbours here are very good and very friendly. Many residents here are also pet owners and our pets play together. I go for morning taiji exercise around here too,” she said.
She admitted that she has not thought about what she will do when the lease runs out when she is 97.
“(If I) can (live) until my 80s, it’s fine already,” she said
Source: Channel NewsAsia – 6 May 2019