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Last week, the Government took an incremental but important step to shift the rules to focus on whether a property can last a home owner for life, instead of being based on the length of the lease which remains. The move ensures that buyers have a roof over their heads in their old age – a reality that rings loud given that people are living longer. The average life expectancy of Singaporeans is forecast to be 85.4 years in 2040. With the change, home buyers can draw more from their Central Provident Fund (CPF) to buy ageing flats, provided the property’s remaining lease covers the youngest buyer till the age of 95. They would also be entitled to the maximum Housing Board loan of 90 per cent of the property price or valuation if they are buying resale HDB flats. With this move, which follows the announcement of a second round of improvements for ageing flats, the Government has upgraded public housing to a renewed role in nation-building. In an ageing society, that effectively makes the HDB flat a lifelong companion for older Singaporeans.

The issue surfaced two years ago, when the Government had to caution home buyers to not assume that all old Housing Board flats would be eligible automatically for the Selective En bloc Redevelopment Scheme (Sers). Noting the strict selection criteria for Sers, it made the point that leases would run out eventually for most public housing flats, which would be returned to the HDB. Hence, buyers should practise due diligence when buying flats with short leases. Young couples, who need to plan for a longer future than their older counterparts, should keep this reality in mind in particular as they look for a flat to buy.

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