More ways to avoid eating dog-food in retirement

Recognizing that the bulk of Singaporeans' supposed retirement savings have gone into their flat, the Singapore Government is now allowing more ways to allow Singaporeans to monetize their biggest assets.

From the Straits Times:

Rules on subletting HDB flats have been relaxed further to allow even those who have lived in them for just five years to rent them out.

And it does not matter whether they have paid up their home loan or not.

The previous rules specified that those with outstanding HDB loans would have to wait 10 years to do so, and five if they have paid up.

A new rule is in place for those who have bought their HDB homes without any subsidy or grant from the Government: They can do the same if they have lived there for just three years.

The changes, effective immediately, mean that about 650,000 of the more than 800,000 HDB homes dotting the island can be put on the rental market.

HDB rules on subletting have been gradually relaxed over the years to let people monetise what is, for most, their single most valuable asset.

It appears that it is targeted mainly towards the elderly, but wouldn't most elderly folks have already spent more than 10 years in their HDB flats? And what would you do if you had to be homeless in order to monetize your flat?

Mah Bow Tan suggests that you move in with your kids......

National Development Minister Mah Bow Tan, who announced the changes in Parliament yesterday, noted that the elderly stood to benefit.

They could move in with their children while earning rental income from their flat, said Mr Mah.

He also listed other ways for the elderly to monetise their flats.

They could downgrade to a studio apartment, rent out a room in their existing flat, or pledge their property for a regular stream of income in what is known as a reverse mortgage.

He lists other options as well, but they all have high transaction costs.

1. Downgrade to studio apartment - involves all the closing costs and real estate commissions involved in buying and selling a flat
2. Rent out a room in their existing flat - invite a stranger into your house
3. Reverse mortgage - high fees and costs, payable to the bank....

The more cynical amongst us could argue that it would also provide some cheap housing for the coming additions to Singapore's population....