Subsidised optional improvements will cheer sandwich class
The Housing and Development Board (HDB) has released details of two new upgrading programmes which are seen as benefiting a broad spectrum of Singaporeans, including the middle class.
New look: Under the two new programmes, HIP and NRP, the government will pay for essential improvements like spalling concrete and repairing ceiling leaks The two new programmes, which Prime Minister Lee Hsien Loong mentioned during his National Day Rally speech, are the Home Improvement Programme (HIP) and the Neighbourhood Renewal Programme (NRP).
The government will pay for essential improvements like spalling concrete and repairing ceiling leaks under HIP.
Compared to the existing Main Upgrading Programme (MUP), it will be a targeted programme that will also offer optional improvements like the upgrading of toilets and the replacement of entrance doors, for which the government will subsidise between 87.5-95 per cent of the cost.
Speaking on the sidelines of an event yesterday, Minister of State for National Development (MND) Grace Fu added that the new programmes are expected to, ‘benefit a large number of residents’.
National University of Singapore sociology professor Paulin Straughan told BT: ‘Generally, what was announced focuses on the lower income and the lower-income elderly.’
But she noted that general housing estate upgrades that can be expected through HIP and NRP ‘will benefit everyone’.
Although some of the improvements under these programmes may not cost a lot - renovating a toilet is expected to cost around $2,000 - Prof Straughan believes that there is a growing middle class, or, ’sandwich class’ that finds itself over-stretched.
Typically in their 40s and 50s, with children and ageing parents, some of these people do not even have the option of downgrading. ‘Selling their flats and downgrading is not feasible because they would have bought their homes at a high,’ she added.
That’s why the help will be handy.
HIP will apply to flats built in 1986 or before. MUP applied only to flats built in 1980 or before. Up to 300,000 flats are now eligible compared to just 100,000 flats under MUP.
Co-payments under HIP are also significantly less at an estimated $550-$1,375 compared to $2,490-$6,225 under MUP. ‘One must see co-payment as part of stake-holding,’ said Prof Straughan.
NRP - a general upgrading programme which could be more comprehensive and consultative than in the past - will be completely funded by the government.
While more people are expected to benefit from upgrading works, PropNex CEO Mohamed Ismail pointed out that under MUP, upgrades were more extensive and even included the addition of extra rooms or toilets. ‘In terms of adding value, HIP cannot compare with MUP,’ he said.
Mr Mohamed did add however, that with HIP, homeowners, ‘will enjoy the benefits earlier with fewer disturbances and the value of their property will be enhanced in general’.
With their values, ‘enhanced’, it could be more feasible for cash-strapped home owners to monetise their assets and downgrade.
However, resale figures from ERA Singapore suggests that the downgrading trend has plateaued as the economy has improved.
ERA’s vice-president Eugene Lim notes that the percentage of resale three-room flats has dropped from 36 per cent two years ago to about 30 per cent today. Four-room flats also make up less of the resale market at 38 per cent, down 2 per cent from two years ago, while the the number of resale five-room and executive flats have gone up.
Mr Lim believes that upgrading flats through HIP and NRP is more about improving living conditions. ‘There is a world of difference between a new flat today and a flat built 20 years ago,’ he added.
MND’s Ms Fu also said that HIP and NRP applies to opposition wards as long as they meet the criteria.
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