Singapore

HDB offers Ang Mo Kio Sers flat owners option of new units with shorter 50-year lease


SINGAPORE – Owners of flats undergoing the Selective En bloc Redevelopment Scheme (Sers) in Ang Mo Kio will be given two more rehousing options that address their concerns about having to fork out cash for similarly-sized replacement units.

The Housing Board on Saturday (July 2) said it will offer affected residents at the four Sers blocks in Ang Mo Kio three-room or larger flats at the replacement sites on a 50-year lease, if the new flat is able to last the owners until they are 95.

This is the first time that HDB is offering four-room flats on a shorter lease.

Alternatively, HDB will also offer the lease buyback scheme to those aged 65 and over at the Sers site. They can then buy a short-lease replacement flat after that, HDB said.

Under the lease buyback scheme, flat owners can keep a lease that will cover them and their spouse till they are at least 95 years old, and sell the tail end of the lease to HDB.

These two additional rehousing options will first be offered to eligible Sers flat owners at Blocks 562 to 565 Ang Mo Kio Avenue 3, and later extended to flat owners of Blocks 212 to 218 Marsiling Crescent/Lane whose flats were announced for acquisition for the redevelopment and extension of Woodlands Checkpoint, HDB said.

It added: “HDB understands their concerns and has therefore provided the additional options to help them purchase their new replacement flats.”

[[nid:583702]]

The HDB had announced in April that four HDB blocks – Blocks 562 to 565 in Ang Mo Kio Avenue 3 – had been selected under Sers, a scheme aimed at rejuvenating older estates.

See also  PMD battery catches fire while charging in Marsiling flat, elderly man taken to hospital

Completed in 1979, flats in the four affected blocks in Ang Mo Kio comprise mainly three- and four-room units.

The 606 households affected by the government acquisition were previously only offered replacement flats with a fresh 99-year lease in Ang Mo Kio Drive, next to ITE College Central. Owners also could not apply for the lease buyback scheme after their flats had been announced for Sers.

Residents had previously expressed dismay at having to pay up to $100,000 for a replacement flat.

The latest announcement means that residents in the affected blocks in Ang Mo Kio and Marsiling will have a range of options, including buying the replacement flats that come with a fresh 99-year lease, almost double the lease of the existing flats, by the time they move out in end-2027.

alt

Owners who do not wish to take up a new replacement flat can choose to sell their Sers flats with the rehousing benefits on the open market.

HDB said the registration for new replacement flats in Ang Mo Kio Drive will start in early 2023 and residents will have until their flat selection appointments, estimated to be at the end of 2023 or early in 2024, to pick an option.

HDB added: “For the flat owners in Ang Mo Kio, this 50-year lease length would be close to the balance lease of their existing flats when they move to their replacement flats around end-2027.”

To be eligible, the flat owners and their spouse need to be at least 45 years old at the point of the Sers announcement, which was in April this year, to ensure that the lease of the replacement flat can cover them until the age of at least 95, HDB said.

See also  Driver arrested after lorry crashes into trees, HDB block

Flat owners who choose this option will be able to sell their flat on the resale market after meeting the minimum occupation period of five years, it added.

HDB said: “Further details on the actual selling prices of the replacement flats at the designated Sers replacement site in Ang Mo Kio Drive will be made known to residents during flat selection.”

Experts The Straits Times spoke to said while the new options are attractive and solve the short-term problems residents have raised, the solution raises longer-term questions about these flats and the wider housing system.

ERA Realty head of research and consultancy Nicholas Mak said: “Taking up the shorter leases for the replacement flats may provide affected households with some immediate financial gains.

“However, the owners of flats with shorter leases could face issues in the years ahead, such as the values of their flats depreciating faster than their neighbours’ flats which have longer leases.”

The selling of these short-lease flats will also create a unique situation, said Mr Mak, where for the first time, HDB resale flats in a five-year-old building will be sold with a short 45-year lease.

He said: “This means that they will go through a price discovery process where some resale flats could potentially be mispriced in the short term, leading to either the buyer or the seller losing out.”

Associate Professor Walter Theseira of the Singapore University of Social Sciences said problems like this are likely to start to arise when these flats approach the mid-point of their lease in the next 10 to 20 years.

See also  Two new nursing home infections bring total to five homes with Covid-19 cases

He added that one option would be to apply to the Government to top up leases, which has a precedent in the private market in connection with collective sales.

He said: “Another option is for HDB to buy the flats back and reissue them as sale of balance flats.

“These will have to be explored down the line as a substantial number of people may take up the shorter 50-year lease.”

But offering a shorter lease also asks a deeper question about the nature of HDB flat ownership in Singapore, added Prof Theseira.

He said: “This is a good effort from the Government but it clearly shows that a lot of thought will have to go into dealing with the problem of ageing HDB flats down the road.”

“As leases get shorter and more flexible – they are becoming in some ways indistinguishable from long-term rental contracts – so it raises the more philosophical question – what are you really buying when you buy a HDB flat and can we build communities with a more flexible notion of ownership?”

Residents who have queries can also contact their Sers journey manager, call HDB’s Sers inquiry line on 1800-866-3070 from Mondays to Fridays, 8am to 5pm, or contact HDB via MyRequest@HDB.

This article was first published in The Straits Times. Permission required for reproduction.



READ SOURCE