Costs of public community care apartments reduced, basic services cut following lacklustre demand

AI generated

SINGAPORE – With prices of services offered at assisted living flats escalating, the demand for newer projects has dampened, leading to changes in how these homes are sold to seniors.

To date, the Housing Board has launched five projects in Bukit Batok, Queenstown, Bedok, Geylang and Sengkang, for these community care apartments which incorporate senior-friendly design features.

Information collated by property firm Realion (OrangeTee & ETC) Group showed that the first project in Bukit Batok – the only completed project with residents moving in since November 2024 – was oversubscribed with 706 applicants vying for 169 units, for a rate of 4.2.

The second project at Queenstown was also oversubscribed but the rate dropped to 1.6. All three subsequent projects were undersubscribed, with the latest Sengkang project having the lowest rate of 0.7.

Community care apartments, a joint offering by the Ministry of Health (MOH), Ministry of National Development and HDB, give seniors another housing option, one which integrates senior-friendly housing with care and social services that can be scaled according to their needs.

Residents of these apartments have to subscribe to a basic service package (BSP) which provides them with a range of care and support services offered by the community care apartment staff.

The total payment for such apartments comprises the flat price, and separately the cost of the BSP, if no optional services are selected.

The services included round-the-clock emergency response, assistance with simple home fixes and interpreting bills, as well as assistance in arranging for day care and housekeeping services.

Checks by The Straits Times showed that BSP prices have increased significantly in less than five years.

For the Harmony Village @ Bukit Batok project, a resident who had chosen a 15-year lease when it was launched in 2021 was expected to pay either a full upfront payment of $22,000 for the BSP services, or a partial upfront payment of $13,000, followed by a monthly fee of $50. The fee has since been increased to $159 and will continue to be reviewed periodically.

The BSP fees payable for a 35-year lease was either $42,000 (partial payment excluding the monthly fee) or $59,000 (full payment).

According to operator Vanguard Healthcare’s website, the option of full upfront payment has since been removed.

The total BSP fees for a 15-year lease there has now increased to $40,000, while those for a 35-year lease also surged to $136,000.

The BSP fees for the other four projects were even higher, reaching $49,000 for the BSP over a 15-year lease, and $168,000 for a 35-year lease for the two latest projects.

This means that a senior opting for a 35-year lease in Fernvale Plains, which was launched in October 2025, could fork out about $290,000 – including $122,000 for the flat.

Price hikes caused by inflation, operational cost pressures: Vanguard Healthcare

Vanguard, an MOH Holdings subsidiary which operates all community care apartments, told ST that the price hikes were "to account for inflationary increase and operational costs adjustments, including manpower and service delivery".

It did not say whether manpower costs were the main driver and if it faced issues with staff recruitment or retention, beyond reiterating that these costs have "gone up significantly, in line with trends seen across sectors nationally".

In addition, BSP fees differed across projects partly due to when each would become operational. This is because newer projects would see a greater cumulative impact of manpower cost growth and inflation, though construction costs were not factored into the fees.

The Queenstown and Bedok projects will be ready in 2028, and the remaining two in 2029.

Vanguard also explained that removing the full upfront payment option allowed for flexibility in adjusting its operating model of the projects, without having to consider whether it needed to go through the complex exercise of refunding residents or to consider using the monies collected for other purposes in the projects.

Following a recent review, the authorities announced on July 13 that the monthly BSP fee will be lowered, with a streamlining of the service model, so as to improve affordability for residents. The eligibility age for such apartments will also be lowered from 65 to 55.

MOH, Ministry of National Development and HDB said in a joint announcement that, taking into account seniors’ feedback, the scope of BSP services for projects operational from 2026 will be streamlined, such as making the emergency alert device feature optional.

There would also be cost savings from running social activities in active ageing centres nearby or at the blocks of the apartments, rather than at stand-alone communal spaces within the blocks, which would also incur maintenance costs.

The deal is set to be sweetened with MOH providing a 35 per cent to 95 per cent subsidy for eligible residents for specific BSP components, such as support provided by the apartment staff and the round-the-clock emergency response.

At Harmony Village @ Bukit Batok, the activity centre and communal spaces will continue to run as normal, a MOH spokesman said.

Monthly fees for basic services to drop by at least 18%

In turn, from the second quarter of 2027, the monthly BSP fee will become more affordable after being lowered by between 18 per cent and 75 per cent.

Information on Vanguard’s website showed that the BSP fees for a 15-year lease in the Bukit Batok project would drop 22.5 per cent from $40,000 to $31,000.

The BSP fees for the 35-year lease would drop 22 per cent from $136,000 to $106,000.

The largest decrease of 44 per cent was for the BSP fees of the 35-year lease of both the Geylang and Sengkang projects, which would be slashed from $168,000 to $94,000.

Two residents at Harmony Village @ Bukit Batok whom ST spoke to welcomed the reduction in BSP fees. Both currently pay about $180 each month for services.

Rosemary Retnam Nicholas Gerard, 76, said the price drop made it more affordable for her son to support her.

A 70-year-old resident, who wanted to be known only as Tay, said he can save the difference on other items such as food or doctor’s appointments.

Vanguard said BSP fees will continue to be reviewed and adjusted periodically.

There could be various reasons for the low demand for such flats, which include the high BSP prices, said Thang Leng Leng, a socio-cultural anthropologist at the Department of Japanese Studies of National University of Singapore.

She noted that there were other options for seniors to receive care while ageing in the community, such as getting a domestic helper, paying for home-care services or sharing stay-in caregiving services.

Thang, whose research interests include ageing, added that those who would be most interested in the assisted living flats could be those who already live in a studio apartment or a two-room flexi flat on a short lease.

However, the current rules do not allow those who have purchased such residences to buy a community care apartment, even if they have certain care needs and worry about care provision, and this could have impacted the demand, said Thang.

Demand expected to pick up again with changes

Demand is nonetheless expected to pick up again with the more affordable pricing, observers said. In addition, the pool of potential buyers will be widened with the eligibility age being lowered from 65 to 55 years for the upcoming Build-To-Order sales exercise in October.

About 260 community care apartments will be on offer in Toa Payoh next to Caldecott MRT station in the October exercise.

This allows those who reach age 55 and want to right-size their homes to have an additional option, beyond the two-room flexi flat on a short lease.

Realion Group’s chief researcher and strategist Christine Sun also said the lower age eligibility would draw more prospective buyers.

Based on the current eligibility of 65 years, and considering an average construction period of three to five years, “some buyers may find moving to a new flat at 70 years old too tiring and arduous... they will need time to adjust to a new environment, which could be easier if they do so at a younger age”, she said.

Sun also expects that with a wider pool of prospective buyers, the economies of scale can be increased, leading to greater affordability for the healthcare and medical services.