Earlier last month in March, many mouths were left agape when a 30-years old Bishan flat was transacted more than $1 million. In February, another Potong Pasir Flat which had a remaining lease of 66 years also fetched a cool $925k.
Following the recent trend whereby old public residential flats have been sold at exorbitant amounts of money, the Minister for National Development, Mr Lawrence Wong, has fired a warning shot to those who are buying old homes, by warning them that it would be foolhardy for them to take it for granted that their flats will automatically be among those which will be eligible for Selective En bloc Redevelopment Scheme (Sers).
According to Mr Wong, it would suffice to know that only about four percent of the resale HDB in the open market will be selected as appropriate for Sers. The program allows the state to purchase any HDB flats from its existing owner, at the prevailing market prices. The state then goes ahead to provide all the residents of the old flats with brand new discounted public housing units in other different locations.
Mr. Wong, went ahead to lay bare the requisite conditions for any house that will be deemed as eligible for the much hyped Sers Scheme. Only old HDB blocks which are located on sites that are considered as high potential in terms of redevelopment can qualify for the program. However, the replacement land that will be used for the residents who need to be relocated must first be available.
According to Mr. Wong, the government’s financial resources should also be put into consideration in the bigger scheme of things. The minister issued a stern warning that people should stop thinking that all old HDB flats will qualify for the Ser scheme.
In addition, the minister also pointed out that when the lease for the HDFB is expired, HDB will eventually acquire back the land. Mr Wong was deeply concerned many homebuyers are paying sky high prices for some older HDB in the mature estate. Some of these homebuyers are parting with colossal amounts of money for older flats, while speculating that they might end up reaping big from the Sers benefits in future.
A quick spot check by statistics from SRX also confirmed that most old flats, particularly in mature towns, are becoming very much sought after. Coming to half of the 2015 resale transactions that came from HDB units that were more than 30 years old. And they accounted for a lucrative average reselling price of about $400,000.