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Redesigning Home Reversion Products to Empower Retirement for Singapore’s Public Flat Owners

Author

Listed:
  • Koon Shing Kwong

    (School of Economics, Singapore Management University, Singapore 178903, Singapore)

  • Jing Rong Goh

    (School of Economics, Singapore Management University, Singapore 178903, Singapore)

  • Jordan Jie Xin Lee

    (School of Economics, Singapore Management University, Singapore 178903, Singapore)

  • Ting Lin Collin Chua

    (School of Economics, Singapore Management University, Singapore 178903, Singapore)

Abstract

This paper introduces an innovative sell-type home reversion product aimed at monetizing Singapore’s public flats, serving as a new alternative to the existing Singapore Lease Buyback Scheme (LBS). This new product not only retains the LBS’s guaranteed period of residence in the property along with life annuity incomes but also enhances the product features to meet specific homeowner needs, including the ability to age in place, flexibility in retaining part of the property, options for bequests, and guaranteed principal return. By incorporating these additional features, the new product seeks to stimulate greater demand for monetizing public flats among asset-rich but cash-poor homeowners. An actuarial pricing model is developed to establish a transparent and fair framework for justifying the cost of each product feature. Additionally, we present a cost–benefit analysis from both the provider and consumer perspectives to highlight the major contributions of the new product when compared to the LBS.

Suggested Citation

  • Koon Shing Kwong & Jing Rong Goh & Jordan Jie Xin Lee & Ting Lin Collin Chua, 2025. "Redesigning Home Reversion Products to Empower Retirement for Singapore’s Public Flat Owners," Risks, MDPI, vol. 13(2), pages 1-19, January.
    • Handle: RePEc:gam:jrisks:v:13:y:2025:i:2:p:23-:d:1580223
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    References listed on IDEAS

    as
    1. Daniel Alai & Hua Chen & Daniel Cho & Katja Hanewald & Michael Sherris, 2014. "Developing Equity Release Markets: Risk Analysis for Reverse Mortgages and Home Reversions," North American Actuarial Journal, Taylor & Francis Journals, vol. 18(1), pages 217-241.
    2. repec:hal:journl:hal-04413252 is not listed on IDEAS
    3. Makoto Nakajima & Irina A. Telyukova, 2017. "Reverse Mortgage Loans: A Quantitative Analysis," Journal of Finance, American Finance Association, vol. 72(2), pages 911-950, April.
    4. David A. Wise, 2004. "Introduction to "Perspectives on the Economics of Aging"," NBER Chapters, in: Perspectives on the Economics of Aging, pages 1-16, National Bureau of Economic Research, Inc.
    5. Arnaud Simon & Jean-Baptiste Coulomb & Fabrice Larceneux, 2023. "Choosing annuities in home reversion - The case of viager Market," Post-Print hal-04603380, HAL.
    6. David A. Wise, 2004. "Perspectives on the Economics of Aging," NBER Books, National Bureau of Economic Research, Inc, number wise04-1, October.
    Full references (including those not matched with items on IDEAS)

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