HDB flats with 70-year lease unlikely to have strong demand

It is not necessary for the Housing and Development Board (HDB) to sell new flats with a 70-year lease alongside 99-year flats, as there is unlikely to be "strong demand" for the proposed option, said National Development Minister Khaw Boon Wan on Monday (Nov 3).

Mr Khaw said there are two reasons for this assessment: Firstly, the upfront cost HDB has to incur to offer a 70-year lease option is the same as that of a 99-year lease; and secondly, while a 70-year lease flat should be cheaper than a 99-year lease, the "cost reduction is not directly proportionate to the reduction in lease".

"Buyers who prefer flats on 70-year leases can buy them from the resale market, and still be eligible for housing grants if they are first-time buyers," the minister said, in response to the proposal mentioned by MP Seah Kian Peng in Parliament.

He added that HDB prices new flats on a 99-year lease to be "highly affordable for first-time buyers".

"With significant housing grants, first-timer families who today earn S$1,000 per month can afford a 2-room Build-To-Order (BTO) flat in a non-mature estate. Those who earn S$2,000 per month can afford a 3-room BTO flat, and those who earn S$4,000 per month, a 4-room BTO flat. They can do so with little or no out-of-pocket cash," Mr Khaw stated.

He did note there are exceptions, such as Studio Apartments which are sold on a 30-year lease to senior citizens as their retirement homes.