There’s been a lot of talk lately about whether Housing Development Board (HDB) flat owners really own their flats, or whether they’re just tenants on a 99-year lease.
We can argue about this until the cows come home, but deep down, what Singaporeans really care about is whether there is money to be made out of that HDB flat.
For older flats, (right now, that generally means those with 50 years or less left), be prepared to see a huge drop in value once they start creeping towards the tail end of their leases. For instance, there will be no point to get a resale HDB flat if there are only 35 years left on the lease.
Once the resale value of a flat begins to fall, it’s time to start praying that it will be selected for the SERS, or that you and your neighbours can band together to get it redeveloped under the newly-announced VERS.
- What is SERS HDB scheme?
- What about VERS? How is VERS different from SERS?
- What’s the difference between SERS, VERS and regular HDB resale?
- How can you tell if your HDB has SERS potential?
- What happens during the SERS process?
- List of SERS HDB estates and blocks so far
What is SERS HDB scheme?
You’ve probably heard people talking about Singapore’s en bloc sales in the same reverent tones they talk about Toto or 4D prizes. And we all have that uncle who became an overnight millionaire when his place was sold in an en bloc sale.
SERS (Selective En Bloc Redevelopment Scheme) is similar to a “HDB en bloc sale,” although there are some important differences between the two.
Basically, when SERS takes place, the government notifies the homeowners that they’re going to acquire their flats.
The owners will be offered a compensation package that is usually quite generous. They will also be assisted in purchasing a flat with a fresh 99-year lease at subsidised rates. These new flats are usually located near their original homes.
In a nutshell: The government takes your flat, gives you money for it, and then gives you the option of moving to a new flat with a fresh 99 year lease.
So, how does SERS differ from a private en bloc sale?
|SERS aka “HDB en bloc sale”||Private en bloc sale|
|Participation is compulsory once you receive notice from the government||Residents get to vote for or against the collective sale by a private developer|
|Compensation is generous, but usually at market value||Owners tend to get prices way above market value|
|HDB will help SERS participants find a new home.||Private en bloc owners must source for their own accommodation|
|Replacement HDB flats are usually nearby and everyone will move in together||The neighbourhood community will split up as everyone will move to a different location|
|Process can take up to 4 years from receiving notice to finally moving out||Usually owners have to move out in less than a year|
What about VERS? How is VERS different from SERS?
As the name suggests, Voluntary Early Redevelopment Scheme (VERS) will be a voluntary scheme that allows homeowners to decide to give up their flats for redevelopment. They will need to take a vote to decide whether or not to sell their flats to the government as the lease starts to run out.
At the same time, the VERS scheme will help the government redevelop estates gradually over 20 to 30 years, instead of taking all the flats back at the same time and trying to redevelop all that land within a much shorter timeframe.
The details of VERS haven’t been fleshed out yet, since it will not be needed for another 20 years, when the oldest HDB flats hit 70 years of age.
As SERS is not a given, whether your flat is selected for SERS depends on the luck of the draw. Currently, there are no HDB flats that are old enough to test if the government will heartlessly take flats back without compensating owners when their leases expire.
VERS is another HDB scheme to alleviate the problem of people becoming homeless in 50 years’ time.
Here are some of the details we know:
- Flats with better redevelopment potential have a higher chance of being earmarked for VERS. This could mean flats in central locations or near MRT stations.
- Only after a precinct is selected, will owners living there get to vote.
- VERS will allow HDB flat owners to vote on whether they want to sell their flats back to the government when they are at least 70 years into their 99-year lease.
- The compensation flat owners will enjoy through VERS will be less attractive than what SERS offers. Which means that there is no guarantee that proceeds will be sufficient to purchase an entire new flat. Homeowners should also not expect the scheme to make them rich overnight.
- The government has not ruled out the possibility of giving private developers a role in VERS, but they have also mentioned that even if private developers do get involved, they will be tasked to develop public housing estates. This is bad news for HDB flat owners and means they should not expect to earn private en bloc-type profits.
What’s the difference between SERS, VERS and regular HDB resale?
Despite the fact that their acronyms differ by only one letter, SERS and VERS have some distinct differences. And of course, both schemes are very different from just selling your flat on the resale market.
The following table summarises the differences.
|Type of sale||SERS||VERS||Resale flat|
|Is it compulsory?||Compulsory||Voluntary||Voluntary|
|Who is eligible?||Around 5% of HDB flats||Flats aged 70 & up where residents have voted yes to VERS||Any HDB flat after Minimum Occupation Period (usually 5 years)|
|What’s the compensation like?||Usually above market value of flat + rehousing grant (up to $30,000)||Less generous than for SERS||Depends on negotiations between buyer and seller|
|What about your new home?||New replacement flats offered at subsidised prices||No info yet||You settle yourself|
How can you tell if your HDB flat has SERS potential?
There is no way to predict the future when it comes to SERS, especially as we’re only about halfway through the very first batch of 99-year leases.
But if your HDB estate has the following attributes, it has a better chance at being selected for SERS than one that does not:
- Your estate is located in a central area in a mature estate.
- Your estate is located near an MRT station.
- The property in your estate does not use land space efficiently. (Basically, that means that everything is not packed like sardines and stacked to the sky.) This includes low rise blocks, big and spacious older flats and large open spaces.
- There is alternative housing available in your neighbourhood where the HDB can shift you and your neighbours.
- The property market is doing well. Don’t expect too many SERS acquisitions in a recession.
What happens during the SERS process?
Here’s what you can expect a SERS process to entail:
The government notifies you that your home is going to be acquired for redevelopment.
- You attend an exhibition / info session to find out more about the SERS process and ask questions.
- A valuer shows up at your flat to assess its market value.
- You go for an appointment at HDB Hub, where you’ll be briefed about your finances and surveyed to help the government decide which replacement flat (with a fresh 99 year lease) to allocate you.
- You complete a precinct survey so the government knows what facilities you want.
- HDB informs you about the amount of compensation you will receive for the SERS acquisition.
- You choose between several rehousing options and submit your application for a new flat. You can also participate in the Joint Selection Scheme, which lets your household and up to five others select your flats on the same day so you can continue to live close to each other.
- You show up in person book your new flat according according to your balloted queue number.
- You show up to collect your keys. You also pay for the flat. You can use the money you received from the SERS acquisition—take note, however, that some of this money might first have to be used to pay off existing loans or to return to CPF the money you used to buy your original flat.
List of SERS HDB estates/blocks so far
Want to know who the lucky ones who’ve benefitted from SERS are? Here’s a list of past SERS HDB blocks and estates.
|SERS date||HDB blocks / estate|
|22 Aug 1995||1 – 16 Boon Tiong Road / Tiong Bahru Road|
|1 Sep 1995||145, 147, 151, 152 Lorong 2 Toa Payoh|
|8 Nov 1995||103, 105, 107, 110 – 112 Depot Road|
|8 Feb 1996||67, 71, 72, 77 Redhill Road|
|30 Apr 1996||
6A, 6B Margaret Drive
39 Forfar House
|28 May 1996||6, 7 Chai Chee Road|
|30 Jun 1996||307 to 309, 315, 316 Ang Mo Kio Avenue 1|
|9 Sep 1996||139 to 145 Corporation Drive / Hu Ching Road|
|5 Dec 1996||18, 19 Holland Drive|
|17 Feb 1997||
79 Toa Payoh Central
89 Toa Payoh Lorong 2
454, 455 Ang Mo Kio Ave 2
126, 127 Kim Tian Road
51, 53, 54 Nile Road
|25 Apr 1997||
580 – 582 Ang Mo Kio Avenue 3
24, 28 Dover Crescent
3 to 5 Syed Alwi Road
|17 Oct 1997||
135 to 138 Tah Ching Road
439 to 440 Clementi Avenue 3
|13 Feb 1998||
78, 80, 81 Telok Blangah Drive
12 – 14, 17, 19, 21 to 23 Teban Gardens Road
|21 Jul 1998||
1 – 7 Short Street / Prinsep Street
11 – 13 Short Street
21 – 23, 27 – 29 Outram Park
|7 Oct 1998||
1 Upper Aljunied Lane
24, 31, 32 Jalan Membina Barat / Lower Delta Road
102, 103 Lower Delta Road
3 – 5 Lim Chu Kang Road
|18 Mar 1999||7, 8 Tronoh Road|
|21 Mar 1999||1 – 8, 10, 12 to 14 Hillview Avenue|
|29 Oct 1999||
136, 137, 140 Toa Payoh Lorong 1A
164 – 167 Toa Payoh Lorong 1
68, 70, 72 Dakota Crescent
|20 Feb 2000||
1, 2, 5, 206, 207 Punggol Road / Buangkok South Farmway 1
83 Bedok North Road
1 – 5 Sembawang Road
|30 Jul 2000||70, 71 Telok Blangah Heights, 14 – 16 Outram Hill|
|12 Aug 2000||311 – 314 Clementi Ave 4|
|17 Feb 2001||96 Margaret Drive|
|3 Mar 2001||1 – 4 Seletar Road, 1, 2, 5 – 7 Seletar West Farmway 6|
|11 Mar 2001||6, 8, 9, 10 Upper Boon Keng Road|
|13 Jan 2003||
50 – 54 Tanglin Halt
57, 61, 67 – 73 Commonwealth Drive
|15 Jan 2003||28, 30, 32, 33 Lorong 5 / 6 Toa Payoh|
|20 Feb 2003||1 – 3 Jalan Pasar Baru / Geylang Serai|
|24 Feb 2003||29, 31, 33 Havelock Road / Taman Ho Swee|
|16 Jul 2004||46 – 50 Bedok South Avenue 3|
|19 Jul 2004||30 – 32, 34 – 39 Dover Road|
|28 Jul 2004||103, 105 Tao Ching Road|
|28 Mar 2005||436 – 438, 445 Clementi Ave 3|
|21 Apr 2005||14 – 17, 22, 23 Holland Avenue / Drive|
|25 Nov 2005||
20 Upper Boon Keng Road
24, 56, 57, 59, 60, 62 Sims Drive
|29 Dec 2005||
6C Margaret Drive
27A, 39A Commonwealth Avenue
|22 Mar 2006||
5 – 10 Yung Ping Road / Yung Kuang Road
180-182, 184 Boon Lay Drive
216, 217, 219, 220 Boon Lay Avenue
|21 Apr 2006||88 – 92 Zion Road|
|22 Jun 2006||246 – 252 Ang Mo Kio Avenue 2 / 3 / 4|
|8 Dec 2006||9 – 12, 9A, 12A Ghim Moh Road|
|23 Feb 2007||
94, 96 Henderson Road
17 – 19, 22 – 31 Silat Walk / Kampong Bahru Hill / Silat Road
|28 Jun 2007||401 – 404, 407 – 409 Clementi Avenue 1|
|12 Jul 2007||2-11 Teban Gardens Road|
|8 Aug 2008||74 – 80 Commonwealth Drive|
|8 Nov 2009||110, 111, 113, 114 Bukit Merah View|
|13 Feb 2011||321 – 323 Clementi Avenue 5|
|9 Nov 2011||1 – 3 East Coast Road|
|15 Nov 2011||1 – 4 Rochor Road (as pictured in the main image)|
|3 Dec 2011||1 – 3, 5 – 22 Redhill Close|
|20 Dec 2011||167 – 172 Boon Lay Drive|
|25 Jun 2012||1A, 2A Woodlands Centre Road|
|27 Jun 2014||24 – 38, 40-45, 55, 56, 58 – 60, 60 – 66 Tanglin Halt Road / Commonwealth Drive|
|3 Aug 2016||513 – 520 West Coast Road|
|31 May 2018||81 – 83 MacPherson Lane|
Do you have any questions about SERS or VERS? Leave them in the comments!
Image credit: Phillipe Put via Flickr