SINGAPORE - We refer to the letters by Mr Henry Lim ("Why do studio units for seniors cost so much more than BTO flats for singles?"; Aug 11), Mr Patrick Soh ("Studio apartments for seniors too costly"; Forum Online, last Thursday) and Mr Yeow Hwee Ming ("Policies shouldn't distort market"; last Saturday).
Build-To-Order (BTO) flats cater mainly to first-time home buyers.
To meet the diverse housing needs of home buyers, new HDB flats are available in a range of sizes, located in various towns and come with different designs and attributes. In addition, very significant housing grants and price discounts are offered to help lower-income families afford their first flats.
Studio apartments are built specifically to offer a monetisation option for some senior citizens who find their existing homes bigger than they need.
Studio apartments allow them, including those who have bought subsidised flats before or are living in private properties, to sell and hence, convert some of the value of their existing properties into cash for retirement needs.
They can achieve the same by buying two- or three-room flats in the resale market. Many may, however, find the pricing of studio apartments more attractive and do not mind the restrictions imposed on such units.
While studio apartments have a lease of 30 years, the price is not directly proportional to the length of the lease, as professional valuation principles take into account the time-value of money and other factors.
It is thus not appropriate to directly compare the prices of studio apartments with those of two-room BTO flats, especially if they are located in different towns with very different attributes. For example, earlier this year, Mr Soh had chosen to book a 45 sq m studio apartment, which is in a mature estate and on a high floor.
Home buyers should consider their options carefully and select a flat that best suits their budget and requirements.
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