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Prices of studio and other flat types not comparable: Khaw

This story was first published in The Straits Times on Oct 22, 2013

COMPARING studio apartments to other flat types is akin to equating apples to lemons, said National Development Minister Khaw Boon Wan in Parliament yesterday.

This is because studios are tailored specifically for the elderly, and are kept affordable so buyers can monetise after right-sizing, he added.

He was responding to queries from Workers' Party chief Low Thia Khiang, who asked if studios were becoming too expensive as an option for the elderly.

The price range in July's Build-To-Order exercise for Bukit Merah studio units was between $113,000 and $163,000 each.

In 2003, studios sold for between $47,800 and $71,700.

The latest prices are higher than those for the Sengkang two- room units sold in the same July exercise; they went for between $76,000 and $124,000 each.

Mr Khaw said he read comments on social media comparing the studios and two-room units, but argued that studios were still reasonably priced. "They are comparing apples with lemons. Some studios were in very popular locations, versus two-room flats in non-mature estates. And of course there must be a price difference to reflect this," he said.

The studios come in two sizes - 35 sq m and 45 sq m. They are sold on 30-year leases, have elderly friendly features such as non- slip tiles, and most are located in mature towns.

Mr Khaw also assured the House that the authorities will inject greater flexibility in selling the studios.

Dr Intan Azura Mokhtar (Ang Mo Kio GRC) had called for more leeway to be given to those under 55 years of age - the minimum age requirement for studios, while Mr Hri Kumar Nair (Bishan-Toa Payoh GRC) asked for leniency for those who can qualify for one, but have their equity tied up in their current flat.

Mr Khaw noted that the Housing Board would generally look at each case based on its merits, and exercise flexibility under extenuating circumstances.

He also replied to Mr Gan Thiam Poh (Pasir Ris-Punggol GRC), saying about 300 couples - comprising a citizen with a foreign spouse - had bought two-room BTO units since such couples were first allowed to in July.

Meanwhile, Acting Minister for Manpower Tan Chuan-Jin revealed that the Central Provident Fund Board is working with the National Development Ministry to study more options to help buyers with pre-existing health conditions who are not covered by the Home Protection Scheme.

This mortgage-reducing insurance helps with repayments should disaster strike. Since 2011, about 1.3 per cent of all applications were rejected due to serious pre-existing medical conditions.

darylc@sph.com.sg

This story was first published in The Straits Times on Oct 22, 2013

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