The concept underlying a 2-room flexi design plan is straightforward. Retirees who currently own a larger-than-necessary flat (for example, their children have moved out of a 4-room flat they own) can unlock the value of their larger-sized flat by selling it on the open market and purchasing a new, less expensive 2-room flat directly from HDB.
The scheme’s secondary objective is to provide retirees with the option of 15- to 45-year leases in 5-year increments. This reduces the overall accommodation expenditure and enables retirees to retain more funds for their golden years rather than being asset-rich but cash-poor.
Singaporeans can buy up to two new apartments (including DBSS and EC units) directly from HDB. However, using any quantity of housing grant when purchasing resale HDB apartments on the open market is also considered a gamble.
Singaporeans may register for the 2-room Flexi scheme even if they have previously used both of their opportunities. However, they can only choose the scheme’s short-lease option and must pay a resale levy ranging from $30,000 based on the duration of the lease.
The standard 99-year lease option for these 2-bedroom apartments is only available to those with two opportunities remaining.
How Large Are 2-Room Flexi Homes?
Two-room HDB apartments are available in 36 sqm (387 sq ft) and 45 sqm (484 sq ft).
Comparatively, 45 square metres is roughly half the size of a typical four-room condominium. Along with the typical HDB interior design, it includes a kitchen, a bathroom, a living/dining area, a bedroom and a shelter for the family.
In terms of size, it is presumably suitable for a senior couple residing alone. The good news is that sanitising the entire property shouldn’t take more than 30 minutes. Nevertheless, the Saturday afternoon mahjong game may have to be relocated.
How much are the 2-Room Flexi Short Lease Homes?
The selling prices of short-lease 2-room Flexi flats will be given a discount based on the price at which HDB sells conventional 99-year lease 2-room flats. As such, the property will be affordable the shorter the lease. Note, however, that the price reduction is not directly proportional to the lease reduction.
For instance, if a 2-bedroom property with a 99-year lease is selling for $110,000, a 40-year lease for the same flat purchased from HDB would cost approximately $62,800.
What is the Method of Payment and Selling Options?
Before making a decision, it is essential to understand this last section.
Unlike conventional residences, these 2-room short-lease Flexi apartments will NOT be eligible for any type of housing loan. The full amount must be paid in Cash, CPF, or a combination of both. In other words, you must ensure that you have sufficient funds to cover the total cost of the property.
The same CPF laws govern the use of CPF funds to purchase 2-room Flexi apartments.
Those purchasing 2-room Flexi apartments on shorter leases must also have a cumulative monthly household income of no more than $14,000. In contrast, buyers of 2-room Flexi apartments with a new 99-year lease must have a median monthly household income of no more than $7,000.