The commentary ("Emotional barriers to retirement adequacy"; last Thursday) cited psychological barriers as a reason for the poor take-up of the Lease Buyback Scheme, and that there are other more "attractive" options for asset-rich, cash-poor Singaporeans to monetise their properties.
Another reason cited was the scheme's inflexibility.
But the Government has said it will increase flexibility, for example, by allowing flat owners to retain more or fewer years on their flats' lease ("Govt looking at flexible options for lease buyback; yesterday).
While it may be true that Singaporeans cannot bear to lose the homes they worked so hard for, many may feel the scheme is not a good deal.
Take, for instance, a flat with 70 years left on its lease and a market value of $323,000.
The HDB will buy 40 years of the lease at $138,000, less than the $184,570 if one were to divide the market value by 70 and multiply it by 40. It is said that the lower figure is derived after accounting for depreciation over time, but the fact is properties have almost consistently appreciated in value over time.
I propose that the Government take a more generous approach in trying to help the people. Even if we do not take appreciation into account, can the HDB offer the pro-rated amount?
This article was first published on September 02, 2014.
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