Timely for Govt to review studio apartment scheme: Property watchers

SINGAPORE: Two-room Housing and Development Board (HDB) flats and studio apartments have different lease periods, but both are similar in terms of their sizes and layout, and given the similarities, property watchers say it is timely to review the studio apartment scheme, as the Government ramps up building of two-room units.

Studio apartments were first launched in 1998 to provide seniors, aged 55 years and above, with another option to get cash out of their bigger homes by downsizing to a smaller place. At that time, new 2-room flats were not available.

Said Mr Nicholas Mak, executive director of research & consultancy at SLP International Property Consultants: “One consideration is whether the Government should totally do away with studio apartments and move some of the desirable features of studio apartments into two-room flats for the elderly.

“Another suggestion is for the Government to extend the lease for studio apartments, but by doing this the Government is minimising the difference between studio apartments and two-room flats. So it again raises the question that if you are going to make these two products very similar to each other, is there even a need to differentiate between them in the future?”

The two-room flat has a 99-year lease, the studio apartment has a 30-year lease. Studio apartments also cannot be resold in the open market, and must be returned to the HDB, when the owners pass on.

Otherwise, studio apartments and 2-room units are similar in several ways. Both are of the same size: 45 square metres – although studio apartments do come in a smaller 36 square metres – and both have a similar layout. Except for elderly-friendly features, such as grab bars, a less discerning eye may take a studio apartment for a two-room flat.

Property firm PropNex says studio apartments may not be as popular among their target audience, the seniors, possibly due to the shorter lease.

Said Key Executive Officer of PropNex Realty Lim Yong Hock: “Many elderly, when they want to buy a HDB flat, they will consider, ‘what if I pass on, can I leave this property to my next generation?’ But if the lease is only 30 years, then many of them may not feel that comfortable. They will probably feel that ‘this property does not belong to me, I can’t pass on to my next generation’. That’s one of the biggest setbacks.”

In HDB’s last Build-to-Order exercise in Feb 2015, a studio apartment in the mature MacPherson area went for at least S$114,000, while a two-room unit in the non-mature town of Bukit Batok cost a minimum of S$80,000, excluding grants.

On its website, the HDB says the studio apartments and two-room flats are “not similar flat offerings”. It adds that it’s inappropriate to make direct comparison of the prices of studio apartments with two-room BTO flats.

This is because these two flat types may, for instance, be situated in different locations. The HDB added that studio apartments are generally located in mature estates, close to amenities and transport nodes.