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Wong: Not all old HDB flats are eligible for SERS
Most of the HDB flats will see their leases run out, with the flats returned to the government.
Do not assume that all old HDB flats are automatically eligible for the Selective En bloc Redevelopment Scheme (SERS), cautioned National Development Minister Lawrence Wong in a blog post last Friday (24 March).
His warning comes following a Lianhe Zaobao article about some buyers forking out high prices for older flats in anticipation of reaping the benefits of SERS.
“But SERS, as the name implies, is on a selective basis,” noted Wong.
“It is only offered to HDB blocks located in sites with high redevelopment potential. These are typically sites where the land has not been well utilised. It is also subject to the availability of suitable replacement sites for residents and the government’s financial resources.”
In fact, only four percent of HDB flats have been identified for SERS since the scheme’s launch in 1995.
The vast majority of HDB flats will see their leases eventually run out, with the flats returned to the HDB, who will in turn surrender the land to the state.
With this, he advises buyers, especially young couples, to be realistic when purchasing flats with short leases since flat prices will drop towards the tail-end of the lease.
“One possible guide is to buy a flat that covers you and your spouse to age 95. This would cover most of us for life and give us peace of mind in our golden years,” he said.
“With a longer lease, you can benefit from the appreciation in property value in the medium-term, especially after factoring in the Government’s housing grants and subsidies.”
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
