Don't assume old flats are eligible for Sers, Minister warns
Early this month, a 30-year-old flat in Bishan sold for $1.09 million. Last month, a 33-year-old flat in Potong Pasir went for $925,000.
With some old Housing Board flats fetching such high prices, National Development Minister Lawrence Wong has issued a word of caution to home buyers: do not assume your flat will be selected for the Selective En bloc Redevelopment Scheme (Sers) when its lease runs out.
In fact, just four per cent of HDB flats have been identified to undergo Sers since it was launched in 1995, he said in a blog post yesterday.
Under the scheme, the state buys back the flats at the market rate and offer residents discounted new units at another address.
Mr Wong spelt out the conditions that have to be met for that to take place.
Sers is granted only to HDB blocks on sites with the potential to be redeveloped.
Typically, the land has not been well utilised.
Suitable replacement sites for residents must be available.
STRICT SELECTION CRITERIA
The Government's financial resources also have to be considered.
Mr Wong said: "We will continue to maintain this strict selection criteria.
"So please do not assume that all old HDB flats will be automatically eligible for Sers."
In fact, he added, for the vast majority of flats, the leases will expire and the flats will be returned to HDB, which will in turn have to surrender the land to the State.
Mr Wong was responding to a recent report in Lianhe Zaobao highlighting the high prices of several short-lease HDB flats in the resale market.
Checks by The Straits Times showed that old flats, generally in mature towns, are highly popular.
According to data from property portal SRX, 46 per cent of all resale transactions made in 2015 involved flats older than 30 years, with an average resale price of nearly $400,000.
Mr Wong wrote: "I was concerned by the suggestion that some buyers are forking out high prices for older flats, in anticipation of the benefits of Sers."