'Generosity' of VERS scheme will give flat owners remaining value of lease: Sim Ann

Chew Hui Min

07 Feb 2023 

SINGAPORE: Members of Parliament debated how expiring leases on Housing Board (HDB) flats will be dealt with on Tuesday (Feb 7), with Senior Minister of State for National Development Sim Ann rebutting the proposals and concerns raised by opposition members in the House.

During the debate on public housing policies, Assoc Prof Jamus Lim (WP - Sengkang) asked: “But notice that once we actually reach the 60 years or so, the only way to end up extracting the value is to sell (the flat) on to someone else so that we can actually retire comfortably by extracting that value.

“Now the question is: We are selling on a rapidly depreciating asset … What is the Government’s plan, at least at the macro level, to prevent creating a generation of home purchasers who have bought at the tail end just before the music stops?”

New SERS rehousing options for Ang Mo Kio flat owners will apply to similar projects in future: Desmond Lee

Blocks 562 to 565 in Ang Mo Kio Avenue 3 have been picked for the Selective En bloc Redevelopment Scheme (SERS).
(Photo: CNA/Cheryl Lin)

Tang See Kit
04 Jul 2022 

SINGAPORE: The new rehousing options made available to some flat owners in Ang Mo Kio as part of the Selective En bloc Redevelopment Scheme (SERS) will apply to a similar exercise in Marsiling and future acquisitions under the scheme, said National Development Minister Desmond Lee on Monday (Jul 4).

The Housing and Development Board (HDB) over the weekend announced that eligible home owners under SERS will be able to purchase a new replacement unit on a shorter 50-year lease, instead of a fresh 99-year one. A second option allows residents who are seniors to take up the lease buyback scheme for their existing flat and buy a new replacement flat of the same flat type on a short lease.

Some Ang Mo Kio residents dismayed by top-up for similar-sized Sers replacement units

The HDB announced in April that four Ang Mo Kio HDB blocks had been selected under Sers.
PHOTO: LIANHE ZAOBAO

Michelle Ng and Nellie Toh

15 JUN 2022


SINGAPORE - When part-time hairdresser Janice Ong learnt in April that her Ang Mo Kio Housing Board block was among the four picked for the Selective En bloc Redevelopment Scheme (Sers), she thought she would be getting a brand-new flat with little to no extra money out of her pocket.

So it came as a shock to the 54-year-old when she realised that she might have to fork out more than $100,000, if she were to pick a similar-sized four-room flat at the Sers replacement site.

"I thought I could live here for the rest of my life, but now that I've just finished paying for the flat, they want me to pay another $100,000," said Madam Ong, who moved into the flat at Block 562 Ang Mo Kio Avenue 3 around six years ago with her husband. Their two daughters and a son-in-law live with them.

Young homeowners who bought ageing flats: What’s the deal?

By Janice Lim

21 July, 2019

SINGAPORE — During the National Day Rallylast year, Mr Leroy Yew, 31, watched Prime Minister Lee Hsien Loong announce several new schemes to address the issue of the depleting leases of Housing and Development Board (HDB) flats.

Mr Yew, who recently joined the real estate industry, admitted that it was only then that he began to worry about the resale value of his own flat, which has less than 60 years of lease left.

Why my first home purchase is a HDB flat I may just outlive

By WONG PEI TING

18 MARCH, 2019


I am 29 years old, know full well that a Housing and Development Board (HDB) flat will be worth nothing when its 99-year lease expires, and even explored a Big Read surrounding the lease decay issue.

Private developers may be involved in Vers scheme: Lawrence Wong

By Janice Lim

10 September, 2018

TODAY



SINGAPORE – Private developers may be involved in the new Government scheme to redevelop public housing precincts that are around 70 years old, said National Development Minister Lawrence Wong on Monday (Sep 10) in Parliament.

There were questions aplenty from Members of Parliament (MPs) on the new Voluntary Early Redevelopment Scheme (Vers) to redevelop public housing precincts in about 20 years’ time, but fewer answers from Mr Wong on Monday as details of the scheme have to be worked out.

Vers was first announced by Prime Minister Lee Hsien Loong at the National Day Rally last month.

“For Vers going forward, I will not rule out the possibility of having private developers involved and we will study (Fengshan MP Cheryl Chan’s) suggestion carefully,” said Mr Wong. “But let’s be very clear. Our aim is to redevelop public housing estates, so we will ensure that any redevelopment is done in a way that preserves the character of our Housing and Development Board (HDB) towns and supports HDB’s mission to provide affordable and quality homes for Singaporeans.”

Gearing up for Vers: Some flat owners want earlier rollout of new HDB scheme

TODAY

By Janice Lim, Alfred Chua

21 August, 2018


SINGAPORE — A day after the new Voluntary Early Redevelopment Scheme (Vers) was announced, some residents in public housing estates that could be among the first in line are already wishing for the scheme to be introduced earlier.

Residents of Chai Chee and Marine Parade, especially the elderly, told TODAY they may not be able to benefit if the scheme is only rolled out about 20 years later, as Prime Minister Lee Hsien Loong said in his National Day Rally speech on Sunday (Aug 19).

The minority approached in both estates — five out of 14 — felt happy to stay put as their leases ran down.

Under Vers, residents of precincts that are about 70 years into their 99-year leases will vote on whether they want the Government to buy back all flats for redevelopment. They will receive compensation and help in getting another flat to live in.

All HDB flats to get upgrading twice during 99-year leases

By Alfred Chua

20 August, 2018


TODAY

Home Improvement Programme to be rolled out to younger flats

SINGAPORE — Every Housing and Development Board (HDB) flat can expect to undergo major upgrading twice during its 99-year lease period, with the new Home Improvement Programme 2 (HIP 2) rolled out for ageing units at the 60- to 70-year mark.

At the same time, the HIP scheme — which currently covers flats built up to 1986 — will be extended to blocks constructed up to 1997. This works out to another 230,000 benefitting from the programme, allowing estates like Pasir Ris, Yishun, Tampines and Jurong to qualify for upgrading.

News Commentary: HDB flat prices and the lease decay issue

The problem of Lease Decay was created by the government. And a lot of the problems built on initial misstep (or outright mistakes) and the magnitude of the problem escalated beyond their expectations and control.

There were three problems or three stages to this ballooning problem.

1) They should not have allowed CPF savings to be used for resale HDB flat purchases. 

Using CPF to buy flats DIRECT from HDB was safe. The prices were controlled by HDB, and HDB were not profiteering. So there is no vicious circle or spiralling costs. Allowing flats to be sold was also not an issue. It allowed for population mobility, flexibility and geographic and other adjustments. 

However, allowing CPF savings to be used to purchase resale HDB flats created a distorted market, and with it, distorted price.

HDB flats "lease decay" issue

The Big Read: No easy answers to HDB lease decay issue, but public mindset has to change first

By Wong Pei Ting


02 June, 2018

SINGAPORE — When the lease of his three-room flat in Lorong 4 Toa Payoh runs out in 2066, first aid and swimming coach Low Mong Seng, 34, expects the Government to give him “something in compensation”.

“Either another shelter over our heads, or a lower lump sum amount (compared to the value of the property) for us to get another flat to stay in,” said Mr Low, who inherited the unit from his mother who died in 1995.

But another homeowner, who gave her name only as Ms Kwok, has a different view.

There is “a misunderstanding (among the public) of what homeownership is”, she said.

“People think ‘ownership’ means a freehold ownership but if you buy a leasehold then obviously the limited lease is reflected,” added the 30-year-old lawyer. Three years ago, she bought a three-room flat in Tiong Bahru — completed in 1973 — with her husband.

What happens when HDB flats with short leases left are no longer assets?

By Sing Tien Foo

17 May, 2018

Resale prices of Housing and Development Board flats have experienced negative or zero growth for the last 19 consecutive quarters since the third quarter of 2013, in contrast to prices of private property, which started showing signs of recovery in late 2017 after 15 consecutive quarters of declines.

The growth momentum in private property market has continued into 2018 with a robust first quarter growth of 3.9 per cent.

There are myriad factors behind the recovery of private property market and the sluggishness in the HDB resale market.

But one issue that has come more into public attention is the leasehold status of HDB flats and correspondingly, the question of whether those with short remaining leases can still be regarded as assets.

MP suggests changing valuation method for ageing flats to raise demand

By Chen Lin

15 May, 2018


SINGAPORE — With owners of older HDB flats worried about the value of their homes as their leases shorten, Ms Cheryl Chan, Member of Parliament for Fengshan constituency, proposed taking a “multi-prong” approach to help sellers and buyers by changing the valuation method for ageing units and extending the lease for flats in mature towns of selected precincts.

To further help Singaporeans put a roof over their heads, she also proposed reassessing the property loan structure and allowing selected older flats to be leased directly from the Housing and Development Board (HDB).

Commentary: 99-year HDB flats a chance to review homeownership and retirement policies

With the impending lease expiry of private residences along Lorong 3 Geylang, Ng Kok Hoe explores the challenges of framing homeownership as an appreciating asset that provides a source of retirement income.

By Ng Kok Hoe

01 Oct 2017


SINGAPORE: In March, National Development Minister Lawrence Wong reminded the public that Housing and Development Board (HDB) flats must be returned to the state when their 99-year leases expire.

Therefore, flat buyers should not fork out large sums for old resale flats on the chance that they may profit from the Selective En-bloc Redevelopment Scheme, he emphasised.

There has been no test case for this policy position so far, as major construction of HDB flats began only in the 1960s, which means that the earliest leases will only expire after 2060.

But in June, the owners of private residences along Lorong 3 Geylang were given notice that when their land leases expire in 2020, their properties must be surrendered to the Singapore Land Authority with no compensation.

Although these were private residences on 60-year leases, and most have been rented out to foreign workers and temple operators instead of being owner-occupied, the episode served as a reality check for many HDB flat owners.

Perils of owning ageing leasehold properties

By Cecilia Chow
The Edge Property
April 21, 2017

A week ago, Singapore permanent resident Ms Lew was just calculating the remaining lease on her 700 sq ft, three-room HDB flat in Marine Parade and wondering how much it could fetch in the resale market. “I’m just a couple of years from retirement,” she says. Lew’s flat, like the more than 7,000 in Marine Parade, was completed in 1975. According to HDB’s website, Marine Parade was the first housing estate to be built on reclaimed land. This means that the flats in Marine Parade have 57 years remaining on their 99-year leases.

Singaporean Ms Aw, who bought her 1,128 sq ft, five-room HDB flat in Marine Parade 17 years ago, says she now feels “a little unsettled”. Even though her flat is already fully paid for, the 56-year-old says, “My retirement is locked in this flat. If I want to make money from it, I will have to sell it and downgrade to a smaller BTO [built-to-order] flat so I won’t be saddled with a big home loan”.

The two HDB owners are representative of many others staying in ageing leasehold properties who became worried, following National Development Minister Lawrence Wong’s blog post on March 24. It was intended to caution buyers against paying high prices for older HDB flats on the assumption that their flats would automatically be eligible for the Selective En-bloc Redevelopment Scheme (SERS).

Wong wrote, “In fact, for the vast majority of HDB flats, the leases will eventually run out, and the flats will be returned to HDB, which will in turn have to surrender the land to the State.” He added, “As the leases run down, especially towards the tail-end, the flat prices will come down correspondingly.”

SLA to take over land at Lorong 3 Geylang when lease expires in 2020

By Jalelah Abu Baker 

By and Melissa Zhu 

 

20 Jun 2017

 

Every owner of the affected 191 terrace houses will be assigned a SLA officer, who will guide them through the lease expiry process.

SINGAPORE: The land currently occupied by 191 private terrace houses at Lorong 3 Geylang will return to the state when its current lease expires on Dec 31, 2020, the Singapore Land Authority (SLA) confirmed for the first time on Tuesday (Jun 20).

The land is slated for future public housing, the authority said in a news release.

How to figure out if an old HDB flat is worth its asking price

Chua Mui Hoong

Opinion Editor

APR 8, 2017

Those looking to buy old resale Housing Board (HDB) flats would have cause for hesitation following comments by National Development Minister Lawrence Wong last month.

Perturbed by reports that Singaporeans were forking out big sums to buy old HDB flats, he said buyers should not assume that all old HDB flats will be eligible for the Selective En bloc Redevelopment Scheme (Sers).

Under this hugely popular programme, the Government compensates HDB flat owners for their old flats and acquires the blocks for redevelopment. Home owners can buy flats in the new developments.

Some savvy owner-investors are known to peruse maps of HDB towns to identify potential Sers hot spots and buy into them in anticipation of Sers. Precincts near MRT stations, built to low-density (think low-rise blocks with large surface carparks) that are 40 years and above, are possible candidates.

HDB and the 99-year lease - How much?

[A series of articles arising out of a comment by a Minister on people buying older flats, and expecting the govt to bail them out when the lease expires and the flats (and the land) reverts to the govt.]



Will you still love your HDB flat when it's over 64?

Wong Siew Ying


APR 12, 2017

Data shows that buyers don't mind old HDB flats, paying similar prices for flats whether they are 25 years old or 50. But beware a potential sharp fall when flats cross 64, with less than 35 years of lease remaining. That's when financing restrictions kick in.