VERS - game changer for HDB market

By
/ EdgeProp Singapore
|
September 15, 2018 12:00 PM SGT

With more HDB flats reaching the halfway mark of their lease and with the possibility of private developers getting a piece of the housing redevelopment pie, Tan Tiong Cheng, president of Knight Frank Asia Pacific, feels it is timely to discuss and debate the issues surrounding the new Voluntary Early Redevelopment Scheme

Like many HDB flat owners living in mature HDB estates, retiree Ms Lew has been worrying about the remaining lease on her 700 sq ft, three-room HDB flat in Marine Parade, and wondering how much it would fetch in the resale market. Like the other 7,862 HDB flats in Marine Parade, Lew’s flat was built between 1972 and 1975.
HDB estates built in the 1970s, such as Marine Parade, Bedok and Ang Mo Kio, would be among the first to undergo VERS (Credit: Samuel Isaac Chua/EdgeProp Singapore)
Lew bought her resale flat some 10 years ago because she likes the convenience of the location and the amenities there. She is also looking forward to the completion of the new Marine Terrace MRT station on the Thomson-East Coast Line that is currently under construction just across from her block. “I knew the flat was leasehold, but I wasn’t thinking of the implications when I bought it,” she says. She reckons that her lease has another 50-plus years left.
The reality of the depleting lease sank in when Minister for National Development Lawrence Wong, in his blog post on March 24, 2017, cautioned HDB flat owners not to assume that their flats would automatically be eligible for the Selective En- bloc Redevelopment Scheme. Wong wrote, “SERS, as the name implies, is on a selective basis. It is only offered to HDB blocks located in sites with high redevelopment potential.”
To allay the fears of HDB home- owners like Lew, Prime Minister Lee Hsien Loong addressed the issue of depleting leases of older HDB flats during his National Day Rally speech on Aug 19. He announced a new Voluntary Early Redevelopment Scheme, to be rolled out in about 20 years. He said HDB estates built in the 1970s, such as Marine Parade, Bedok and Ang Mo Kio, would be among the first to undergo VERS. Unlike SERS, which is decided by the HDB and residents do not get to...