The Private Market Retirement Homes
The Hillford, a 60LH project, is marketed as Singapore’s first retirement village. It was hugely popular and all the 281 units were sold, but not all by retirees. This prompted senior watchers and URA to follow such developments closely. If the village is occupied by non-retirees and retirees are outnumbered, then it no longer becomes a retirement home but a “cheaper” private property in reality, something for developers to re-push their products in light of the rising prices for private homes. Furthermore if the management committee of such retirement villages is dominated by the interests of non-retirees, then retirees lose their say in a condo that is supposed to be catered to them e.g. health and transport services perhaps. All eyes are on this segment of the private property market.
SINGAPORE: The Urban Redevelopment Authority (URA) said it will monitor and review the outcome of Singapore’s first retirement village before deciding if it will release more land for similar projects in the future, or tweak any parameters.
It added that as retirement housing is a relatively new concept in Singapore, it saw merit in giving the market and the developer the flexibility to determine the concept for this new housing development.
The Hillford at Jalan Jurong Kechil was a sellout, with all 281 units snapped up in a day.
With units priced at around S$400,000 to S$700,000 and its location in the Bukit Timah area, the project attracted buyers, including retirees, young families and some investors.
Its developer, World Class Developments, said that a substantial proportion of buyers were over 50 years of age.
Sold on a 60-year lease, The Hillford comes with elderly-friendly features and is aimed at providing affordable housing for retirees.
“The land sales were loosely defined and… not restricted to people of a certain age, certain cohort nor… restrict them from leasing out the units,” said Alan Cheong, research head at Savills Singapore.
“I would believe quite a number of them would have bought it for rental income yield, because (in a) worst case scenario, you still get a five per cent gross yield and that return is even better than the average shoebox (apartments) that you are getting.”
Property analysts are mixed as to whether there is scope for the development of more retirement housing projects in the private residential market in Singapore.
But they said should the government plan to release more of such sites, stricter conditions must be attached to the tender as the notion of retirement homes may be lost without rules specifying who could buy these units.
They added that sites for retirement homes should also be located near healthcare facilities such as a hospital.
“The first aspect that the government could consider would be to look at the minimum age for home buyers,” said Alice Tan, associate director and head of consultancy and research at Knight Frank.
“The minimum age could be tied in with the mandatory retirement age set by the government. Now the retirement age is 62, (so) I guess the age of 60 and above would be quite palatable.
“Secondly, in order to preserve the unique concept of retirement homes, URA could consider releasing sites based on a two-envelope tender that would mean that tenderers who submit their bids for the land sites would also need to submit concepts.”
“Incentives or rebates could come to existing projects”, said Desmond Sim, associate director at CBRE Research
“Maybe the state could give incentives or rebates for developers to turn some of the units to be more elderly friendly. In that way, there is a guarantee of integration of the elderly.”
In addition, analysts said buyers should also consider if such units will be well-received in the resale market.
Mr Sim said: “Let’s say you have a lease of six years and (if) you put it out on the market, 54 years will be left. It is untested on the buyer’s side whether the buyer could obtain a loan from the bank to finance the purchase.
“Banks are generally quite restrictive in giving loans to properties that have a reduced tenure.”