HOUSING FINANCE FOR AN AGEING SOCIETY

Abstract

Singapore, like most developed countries, has a rapidly 'greying' population. However, unlike the West where the development of a 'housing continuum' to meet the wide spectrum of ageing needs has resulted in a plethora of housing finance schemes to cater for the diversified financial circumstances of the elderly, Singapore has not grappled yet with the problem of housing for the elderly (especially finance) warranted by its changing demographic and socio-economic trends. Thus, this study set out to evaluate the applicability of some of these housing finance schemes in Singapore. Literature reviews and interviews with key personnel of leading financial institutions, as well as quantitative analysis of available data, led to two main conclusions. Firstly, Home Equity Conversion Scheme (HECs) is much needed to release 'locked-in' equity for elderly homeowners who prefer to stay put. Among these, Reverse Annuity Mortgage Schemes (RAMs) and Sales-Leaseback (SLs) were found to be the most versatile mechanisms. Secondly, shared-ownership schemes like the Sundowner offer a feasible alternative to full equity financing for elderly who seek new homes which may otherwise be unaffordable. Unfortunately, these schemes cannot be implemented in Singapore unless certain government policies, especially, assignability of HDB flats, are modified. Therefore, in view of these findings and of the Vision 1999 which promises quality lifestyle for all Singaporeans, the study has recommended that these innovative ideas, ie., HECs and shared-ownership schemes, be given opportunities to function through modifications of relevant government policies to provide a brighter future for one and all.