Mr Pritam Singh (Aljunied): HDB resale flat buyers are offered more grants than buyers of BTO flats, as BTOs are already subsidised by the HDB, whereas resale flats are priced at the market rate. As Singaporeans know, resale flat prices can be very high. Even flats with 60 years left on their lease can cost well in excess of half a million dollars.
A significant number of resale flats are purchased by first-time married couples who must devote a significant chunk of their Central Provident Fund (CPF) retirement funds on servicing mortgage payments. By the time retirement comes along, they may have to downgrade to unlock the equity in their HDB flat, equity which is likely to have depleted significantly because of the reality of the 99-year lease decay countdown.
With the days of iron rice bowls, lifetime job security and pensions no longer the norm for Singaporeans, retirement adequacy for the current and later generations is a more significant issue today. Another reality is that current generations of Singaporeans will not ride the same property escalator as their parents did, from which many ascended from public housing to private homes and, in some cases, to buying a landed property within a single lifetime.
More pertinently, when compared to their peers who purchase a new BTO flat to live in, those who buy an older resale flat, say, with 60 years left on the lease, all other things being equal, will have less money to buy a smaller flat when they retire and, by extension, will have less for their CPF life payouts as well.
The policy of increasing CPF grants for resale flat buyers was last revisited in August last year and it seeks to make HDB resale flats more affordable for resale flat buyers. But this policy can have the perverse effect of sellers raising prices even more and new buyers chasing ever-increasing resale prices. We need to see how we can strengthen the retirement adequacy of resale flat buyers who buy flats with a significant chunk of their leases already expended.
A renewed focus on building the retirement incomes of first-time resale flat buyers would ensure that resale flat buyers consider their resale flat purchases carefully, with an eye on the 99-year lease countdown clock and their retirement planning considerations in mind. For resale flat buyers who qualify for resale flat grants, would the Government consider giving resale flat buyers the option of putting aside a portion of the CPF resale grant, to top up their CPF Special Accounts, instead of allowing the entire grant to be deployed for the resale flat purchase?
To illustrate, a first-time couple aged 35 years of age, deploys $25,000 of the grant directly into their CPF accounts and assuming each party tops up just $200 a month to their accounts from the ages of 35 to 55, at a 4% interest in the Special Account, each of them would see this grant compound to slightly more than $125,000 by the time they reach 55 years of age.
The HDB Home Ownership Scheme, which allowed the use of CPF money in 1968 and the sale of HDB flats on the resale market in 1971, have become an increasingly significant factor when it comes to retirement adequacy. The objective of home ownership in and of itself is not the problem. However, with the 99-year lease decay looming over Singaporeans and far more foreseeable than it was from the vantage point of 1968 and 1971, the fundamental objective of CPF for retirement needs must come back into focus.
For the immediate term and given how complex HDB housing policy has become, any changes and alternatives with respect to HDB policy will have to be explored at the margins. To this end, I would suggest there could be some policy space to better protect first-time buyers of older resale HDB properties from the reality of the 99-year lease decay countdown clock.
The Minister for National Development (Mr Desmond Lee): EASE(Private) is targeted to commence early next year and will be a three-year pilot programme for a start and then, we will have a review. Aside from improvements to the estate and home, we understand that Singaporeans are also concerned about retirement adequacy. Mr Pritam Singh has asked about this. We hear the concerns that those who buy older resale flats might not have saved enough for retirement. But do not worry, we have a system in place today to help home buyers balance between meeting their housing and retirement needs. And a home is also a store of value for retirement.
For those who buy older resale flats, there are limits placed on the use of the CPF Ordinary Account, as well as the amount of HDB housing loan taken. The money set aside can then be used to help home buyers meet their retirement needs. The generous housing grants received by eligible first-timer home buyers are also refunded into their own CPF account when they sell their flat.
Today, seniors can unlock the value of their flats to supplement their retirement income through a number of ways. First, seniors can consider renting out their flat or spare bedroom. They can opt to sell part of their lease back to HDB through the Lease Buyback Scheme. Seniors can also choose to right-size to a smaller home. We will do more for seniors who wish to right-size for their retirement.
Today, the Government provides a Silver Housing Bonus (SHB), of up to $30,000 in cash when seniors right-size to a 3-room or smaller flat. We will make three changes to the SHB, which will take effect from 1 December 2025. First, we will provide an additional $10,000 cash bonus to seniors who right-size to two-room flats or Community Care Apartments. This will bring the maximum bonus quantum from $30,000 currently to $40,000.
Second, we will extend the scheme to more seniors living in private residential properties, with annual values between $21,000 and $31,000. They will receive a bonus of up to $10,000 if they right-size to a 3-room HDB flat and up to $20,000 if they purchase a 2-room HDB flat or Community Care Apartment. With this enhancement, more than 15,000 more seniors can qualify for the SHB. Altogether, the Silver Housing Bonus scheme will cover more than three in four residential properties.
Third, we will adjust the cash top-up requirement so that seniors will qualify for the SHB as long as they commit to a net increase of up to $60,000 in their CPF Retirement Account after right-sizing, for their retirement payouts. This amount can come from their CPF housing refunds, which means that seniors may no longer need to make a cash top-up to qualify for the SHB. This will make it easier for seniors to benefit from the Silver Housing Bonus.
The Chairman: Mr Pritam Singh.
Mr Pritam Singh (Aljunied): Thank you, Chair. And thank you to the MND office holders for responding to the cuts. Just a few clarifications from me. First on Minister Lee’s speech, the Minister spoke about a number of new initiatives, new scanning technology for flats which have a persistent facade-related leakages. Minister identified 70 flats. Just some clarity on that pilot, whether it covers a specific cluster or Town Council, or is it more general to some of the more problematic flats, and whether other Town Councils can request for the extension of this technology to persistent facade-related problems for flats in their Town Councils.
I thank the Minister for responding to the cut on retirement adequacy. The Minister referred to the Silver Housing slew of policies that MND has and how those are going to be improved. I would just seek clarification on the Community Care Apartments. There was an announcement, I believe sometime in late 2023, about the total number of Community Care Apartments that were being earmarked for construction until the end of the decade. Is there a change to that number? I think the number was 30. Is there is any change to that?
My final clarification for the Minister pertains to a point I made in my Budget debate speech with regard to the number of ultimate dwelling units that were reflected in the HDB Annual Report in the year 2019-2020 and how that number increased in the latest HDB Annual Report. What was the basis of that increase? If the Minister does not have the reply, I can always file a Parliamentary Question for that clarification. He can just let me know whether I need to do that.
Mr Desmond Lee: I thank the Leader of the Opposition for his questions. First is on scanning technology. This is a pilot. We have enterprises that are experimenting with ways to better scan the walls and ceilings. Because visual inspection can go so far, but if you are able to look beneath the surface, you might be able to better pinpoint the source of leaks. I am sure the Member would be familiar with it, when you have external wall seepage, you think the water is leaking from this place, but actually there could be micro cracks in other parts of the external surface that caused this water to accumulate and then enter the home.
And so, this scanning technology is a pilot and we are going to start with 70 flats. They are all over. We are going to select the flats that will allow us to test out the efficacy of this technology. And having pinpointed it, we hope that the repair method will so called nip the problem in the bud at the source, and hopefully the solution becomes a lot more durable, because then you try to target where the problem is. And so, no specific towns per se, but HDB will identify 70 flats for a start to see whether this technology, coupled with the follow-up repair, achieves results. And if it is successful, then we will try to expand it.
As I said earlier, Mr Chairman, we will look to strengthen capabilities across our Town Councils, as well as our BE sector, our contractors and all who will need to be able to know how to use this technology and to be able to make more durable repairs.
1.30 pm
The second question is on Community Care Apartments, no change to the earlier target to build 30 Community Care Apartments by 2030.
The third question, I must apologise to the Leader of Opposition. I might have missed that in the Budget. Maybe I will just invite him to file a Written Question and I will then have a look at the issue.
Ministry of National Development
4 March 2025
https://sprs.parl.gov.sg/search/#/sprs3topic?reportid=budget-2597
5 March 2025
https://sprs.parl.gov.sg/search/#/sprs3topic?reportid=budget-2603
Office of the Leader of the Opposition 