Sign-ups for enhanced Lease Buyback scheme unlikely to jump substantially: Analysts
- POSTED: 03 Sep 2014 23:31
- UPDATED: 03 Sep 2014 23:32
This is because owners of four-room flats have other attractive options should they wish to monetise their property, say property analysts.
SINGAPORE: Property observers Channel NewsAsia spoke to said the opportunity to get more cash upfront may entice more people to sign up for the Lease Buyback Scheme following the changes to the scheme announced on Wednesday (Sep 3). But they said the numbers are unlikely to jump substantially.
The scheme has been extended to owners of four-room flats. But these owners, said REMAX Singapore Director Thomas Tan, are "are earning already, on a household level, maybe up to S$10,000. So they have some level of living expenses. They may not necessarily need this amount to help them in their retirement years".
Mr Lim Yong Hock, Key Executive Officer of PropNex Realty, believes that owners of four-room flats have more attractive options. "The four-room flat owner can actually sell his four-room flat and buy a three-room flat - fully paid-out. They don't have to take out a loan and at the same time they can also take back a large sum of cash," he said.
Only about 800 households have signed up for the Lease Buyback Scheme since it was introduced in 2009. National Development Minister Khaw Boon Wan said he does not expecting "tens of thousands" to sign up, even with the changes.
Many people he talked to said that while the scheme is a good idea, they do not need it, said Mr Khaw. "Sometimes I probe a little bit more and ask why they don't need it. They reply: 'My kids are good. They give me pocket money', or 'I have already rented out one room'. And one room is about a few hundred dollars a month. They do not need it. So, as I said, it is an option - should you need it, the option is there."
Mr Khaw added that there are currently no plans to extend the scheme to owners of five-room flats. The HDB also clarified that for owners who die before the end of their lease, a refund of the remaining lease will be given to their beneficiaries.