In an effort to allow the elderly monetize their HBD flats and also extend the Lease Buyback scheme to larger flat types for commonwealth towers, the government will review reverse buyback commonwealth towers. This was brought up during the discussion of the Lease Buyback scheme as indicated by Mr. Khaw.
When an individual takes a loan by using his property as security, which is paid with interest after it has been terminated or after death, from the sales proceeds is termed as a reverse mortgage commonwealth towers.
It is a form of equity release just like with a Lease Buyback and it enables the property owner to age-in-place while it unlocks some equity. As a result, MND begun a study on this option as said by Mr. Khaw.
Commonwealth Towers buyback
NTUC first offered the reverse mortgage option between the years 2006 and 2008 but rather to a disappointment, only 24 households took up the scheme. This low turn out could be associated to the unfamiliarity of the scheme by the elderly. They also were in fear of outliving the fixed tenure of the loan which would result to selling of the property to pay the loan for commonwealth towers.
The lease buyback scheme was later launched in the year 2009 and allowed home owners sell part of their lease back their unit in commonwealth towers condo to the government. Last year, 240 seniors signed up for the lease buyback scheme after the relaxation of the rules. For flat owners with the age of more than 63 also qualified. This number has increased from a total of 471 households that adopted the scheme in the preceding four years
Commonwealth Condo buyback
The major challenge faced in an effort to educate the elderly over this scheme was the concern of outliving the remaining lease of their unit in commonwealth towers.
Member of parliament, Foo Mee Har inquired if the pent up demand at the private project The Hillford, which is considered Singapore’s first retirement resort – indicated an unfulfilled need for retirement village in Singapore. Also, she raised a concern inquiring if the government would set aside more land for this purpose.
Real Estate Commonwealth Towers
In response, Mr. Khaw said that it was still too early to analyse that aspect as the project was still incomplete. The success of commonwealth towers could not be measured yet. In turn, the Urban Redevelopment Authority cannot issue out more sites at least not until the outcome is well defined. The market will then cater for the high end target market.
MND is trying to come up with ways to better support public rental tenants so that they could progress to home ownership. It also has to provide for better housing needs of vulnerable groups such as divorcees with children.