Enhanced upgrading and the 'flat' effect

The HDB is speeding up one upgrading programme, extending another and introducing a third. Property agents say being picked for such programmes can make flats more attractive - but not immediately.
The HDB is speeding up one upgrading programme, extending another and introducing a third. Property agents say being picked for such programmes can make flats more attractive - but not immediately.ST PHOTO: NEO XIAOBIN

Schemes unlikely to add to resale value, consultants say

Flats that fall under the newly-enhanced upgrading programmes might be more attractive to buyers but, given today's muted market, experts do not expect much impact on their resale prices.

"When prices are overall heading south, resale flat values are unlikely to see significant premium over those which have yet to be upgraded," says R'ST Research director Ong Kah Seng.

SLP International Property Consultants head of research Nicholas Mak agrees, saying: "At best, it might slow down price declines."

On Wednesday, the Housing Board said it was speeding up one upgrading programme, extending another and introducing a third.

The Home Improvement Programme, which spruces up individual units, will benefit 50,000 flats a year, up from 35,000 before. The Neighbourhood Renewal Programme will cover flats built till 1995, thus including 100,000 more households, and the new Selective Lift Replacement Programme will replace 750 old lifts with modern ones.

Property agents say being selected for such programmes can make flats more attractive - but not immediately.

"It's a selling point," says ERA Realty agent Noel Lu. But that is only if the seller has already paid for the scheme, he adds. Flat owners are billed only after upgrading is completed.

The announcement of upgrading could improve a flat's "sale potential", but benefits are greater after the works are completed, says HSR International Realtors agent Karen Yeong.

And some buyers might shun flats where upgrading is not yet completed, as they fear dust and noise, says Dennis Wee Realty agent Mindy Soh.

In the 1990s, the Government pushed HDB upgrading as a way to improve or preserve the value of older flats. Studies by academics such as National University of Singapore professor Lum Sau Kim show that upgraded units did fetch higher prices.

But Suntec Real Estate Consultants director of research and consultancy Colin Tan points out that although resale prices have fallen, they are still at historic highs. "When prices are so high, (upgrading schemes) don't really make an impact."

Upgrading is more about benefiting residents who stay put, he adds.

Housewife Elyn Goh, 39, agrees. She does not plan to sell her three-room Yishun flat, which was upgraded under the Home Improvement Programme in April. And under the accompanying Enhancement for Active Seniors scheme, she and her husband, also 39, opted for senior-friendly features such as grab bars. "Just thinking ahead," she says.

janiceh@sph.com.sg

Additional reporting Yeo Sam Jo