Living in landed property - and poor

[Musicwhiz]

A rather extreme case - will this happen to the current generation who bought expensive property and will use their entire CPF to pay for it? So you can tell people - I live in a swanky condo but I grope my way around it using candles!

The Straits Times
www.straitstimes.com
Published on Dec 21, 2012
Living in landed property - and poor
Occupants of 10 Geylang Serai homes seek financial or job-related help

By Goh Shi Ting

ABOUT 10 private estate households in Geylang Serai have sought financial or job-related assistance this year - something that was once almost unheard of.

They have approached grassroots organisations in the area, in a development that flies in the face of the common assumption that people in HDB flats are the ones who need government help.

"Five years ago, there were zero such cases," said Mr Eric Wong, who chairs Geylang Serai's citizens' consultative committee.

One factor fuelling the increase may be the small but growing group of elderly people who are unwilling to sell their private homes but require assistance and handouts from the Government.

Mr Wong gave the example of a couple in their 70s whose electricity supply was almost cut off because they owed more than $1,000 to Singapore Power. The situation was especially dire as the wife had suffered a stroke and required expensive care.

Now they have successfully applied to pay the outstanding utility bills in monthly instalments.

Over the years, the childless couple had used up their Central Provident Fund savings to pay for their private property, which is worth more than $1 million.

"A permanent solution is to downgrade to a smaller place but the husband is currently not in the right mindset to sell the property," said Mr Wong. "We will let him work through his sums and over time he will understand the situation."

Forty per cent of Geylang Serai's 58,000 residents live in private estates. Many elderly people in landed homes bought them years ago when properties were cheaper, said Minister of State for Social and Family Development Halimah Yacob.

Now retired, they either have no steady income or do not have enough coming in to keep up with the cost of living.

"One solution is for them to downgrade to a flat so that they can use the proceeds from the sale for their daily needs," added the MP for Jurong GRC.

"But this is not an easy option because some of them have lived there almost their entire life, and in their twilight years, it is not easy for them to adjust to HDB living."

Madam Halimah has successfully requested financial assistance for a sick elderly widow with a schizophrenic daughter, who live in a private home in Bukit Batok East.

"I have visited them a couple of times and I could see that although they live in a landed property, the house is quite run-down and it is very simple," she said.

A spokesman for the Ministry of Social and Family Development told The Straits Times that most hard-up families living in landed properties needed help for an interim period while they worked to stabilise their situations.

Although assistance schemes cater mainly to those whose incomes are in the bottom 20 per cent, there are still some ComCare programmes available for private estate residents. These include short- or medium-term monthly cash grants.

A longer-term solution is the Ageing-in-Place Priority Scheme introduced by the HDB in March. It allows property owners to downsize to a studio apartment.

Property consultant Christopher Koh said: "It is difficult for the Government to extend even more help to these private property owners if they continue to hold on to their private properties.

"These elderly folk need to realise that through their wisdom of buying private property in Singapore in the early years, they now have a comfortable income if they dispose of their existing private property and are willing to downgrade."

stgoh@sph.com.sg

[LionFlyer]

A rather extreme case - will this happen to the current generation who bought expensive property and will use their entire CPF to pay for it? So you can tell people - I live in a swanky condo but I grope my way around it using candles!

No, I think this is a different issue where the elderly refuse life elsewhere regardless of cost and it is not something that cannot be explain in a logical fashion.

I know because my cousins are facing this situation. Not landed property, but just a normal HDB. Their father is staying alone and has difficulty taking care of himself after the wife became bedridden due to medical problems.

He refuses to move out and stay within any of the children because he is too used to the area, not to mention selling the house.

[cfa]

Cannot downgrade ?

[safetyfirst]

This is a little unfair. The govt should claw back the financial assistance given with interest when the old people (who refused to move out) pass on the inheritance.

Not fair to tax payers who dont even have a chance to ever step into a landed property

[sgd]

Everybody will go thru both good times and bad times, a lot of people who buy condo today are mostly dual income and they buy a condo when they young and work to pay it off using installments over 20-30 years hope nothing goes wrong and their income will never drop or business will never go bad or go bust and there will never be bad times ... get it right boom town but if hit a few recession one after the other wah jialat many will start praying they don't lose their jobs.

Talk about the 90's there were already 2-3 recessions and under Alan Greenspan they raised interest rates so many times that happened all the local banks in the region all follow raise interest rates so most people installment payments went up and will start to look for cheaper refinancing unless they were conservative enough and went for fixed interest loans all the way from the beginning which not many people will be so conservative.

Personally buying condo short term for quick buck ok but for long term is not worth it because if the next cycle comes round the government will release new land for development there will be new projects people will only interest in new projects who want to stay in an old condo project?

[specuvestor]

Housing is still the best generic indicator of a household's wealth. There were reverse mortgages before but were not well received and actually had a top-up provision when asset prices declined, which doesn't make sense when the owners are depending on the income for livelihood.

The excuses in the article also don't make sense, from "not in the right mindset" to "not easy for them to adjust"... I wonder why these reasons are not valid for heartlanders when the foreigners were taking away our jobs? I am empathetic towards elderly trying to make a living, but I think there are more woeful cases for the government to be involved in. I agree with the conclusion that "it is difficult for the Government to extend even more help to these private property owners if they continue to hold on to their private properties. These elderly folk need to realise that through their wisdom of buying private property in Singapore in the early years, they now have a comfortable income if they dispose of their existing private property and are willing to downgrade"

You can't have your cake and eat it.

[cfa]

Even an FH old inter-terrace house with land area of 2,000 SF in that area worth more than 2 millions.

[Muck]

I cringe to think taxpayer money is being extended to them. I like the idea that the assistance should be temporary, while they look for options to downgrade, and when the ppty is disposed (when downgraded or deceased), then the govt should be paid back. They are depriving others who really need assistance. And I don't like to know that my taxpayer money is used to help someone who lives in private ppty while i live frugally.

[brattzz]

HAR!!! like tat also can! :O

stay in million $ houses and still ask for HANDOUTS??!!!

wasting tax payer money indeed!!

"Mr Eric Wong, who chairs Geylang Serai's citizens' consultative committee." he needs their votes??!!!

[yeokiwi]

I cringe to think taxpayer money is being extended to them.

They were taxpayers when they were young.
It is quite understandable that they have a strong feeling for the area and house after living in it for so many years.
Actually, this kind of problem will pop up more and more in the future.

There are only two choices:
1) Sell away and move to HDB flat to release the value in the current property.

2) Reverse mortgage. It is probably time for the gov to think hard on this issue. They can actually offer a reverse mortgage at substantial discount to its current valuation(50% ??) and allow them to withdraw adequate savings till the end of their life.
Assuming that the current valuation of the unit is $1 million, 50% of it is $500,000. $500k withdrawing at $1500 per month will last for at least 27 years.
If the couple retires at 65 and activates the reverse mortgage at 65, the money can allow them to last till 92 years old. If they can live beyond, I suppose it is ok that tax payers top up a few years for them.
Once both of them pass away, the unit can be sold and $$$ will go back to gov's coffer.