Lease buy-back by HDB for seniors.

[tom]

Comparing lease-buy-back-scheme with CPF LIFE.

Today's 3 room HDB flats, depending on location, can easily fetched between $180,000 to probably more than $200,000. ( maybe housing agents may wish to elaborate ).

A better option, instead of lease-buy-back-scheme, sell off the 3 room flat, buy a studio Senior Citizen's HDB apartment for $60,000, balance put the money in CPF Life and draw monthly payouts.

Accordine to CPF LIFE PLAN : With $117,000 in CPF retirement account, choose Life Basic Plan catagory, the monthly draw-out is between $855 to $946. This sum should be enough for a couple / single to live life comfortable for as long as they live.

Comparatively, a retiree gets more monthly payouts from CPF LIFE than the lease-buy-back.

  better do your sums carefully.

[tom]

At a media briefing on its latest annual report recently, HDB gave an update on the Lease Buyback Scheme

Approx. 25,000 households are eligible. 400 applications had been received since the scheme was launched earlier this year.This works out to be less than 2 % who accepted HDB's proposal.

The elderly have other options to monetise their flats and hold on to their property.

HDB finally admitted: "Some of them will sublet their entire flat, and the rental for even a three-room flat is very good today. They can easily get $1,500 per month from the rental and they move in to stay with their children."

  The  proposed scheme is going to be unpopular.

[tom]

In 1970 a five room slab block in Bedok North cost only $30,000. A five room point block in Bedok South cost $35,000.

Today 2010 that is exactly 40 years later a four room flat cost almost close to $250,000 ( quarter million ) and a five room flat cost almost $350,000. So what does this figure show ?

For a span of 40 years HDB flats appreciated almost 12 times for a five room flat.

Today, year 2010 a five room flat cost $350,000

In year 2050 the similar flat will be appreciated and worth about $4.2 million.

Lets see what the experts had to say. The experts ( wealth management ) estimated in 30 year's time ( 2040 ) HDB flats will jump 4.3 times. So for a $350,000 flat, the value in year 2040 will be worth about $1.5 million.

So whatever it is, it is worth to keep whatever HDB properties we own, LEASE BUYBACK SCHEME IS GOING TO FAIL.