SINGAPORE - National Development Minister Lawrence Wong has cautioned home buyers not to assume that all old Housing Board flats will be automatically eligible for the Selective En bloc Redevelopment Scheme (Sers).
He said in a blog post on Friday (March 24) that the Government will continue to maintain the strict selection criteria for blocks eligible for Sers, noting that only 4 per cent of HDB flats have been identified for Sers since it was launched in 1995.
Mr Wong was responding to a Lianhe Zaobao report on March 15 which highlighted the high prices of several short-lease HDB flats in the resale market.
"While resale flats are transacted on a willing buyer-willing seller basis, I was concerned by the suggestion that some buyers are forking out high prices for older flats, in anticipation of the benefits of Sers," he wrote.
He said that Sers is offered only 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."
Noting that the Government will retain this strict selection criteria, Mr Wong said that for most HDB flats, their leases will eventually run out and the flats returned to HDB, which in turn surrenders the land the flats are on to the State.
"As the leases run down, especially towards the tail-end, the flat prices will come down correspondingly," he said. "So buyers need to do their due diligence and be realistic when buying flats with short leases. This is especially important for young couples, who have to plan for a much longer future."
He had also advised first-time home-buyers to choose a resale flat with a sufficiently long lease to cover their needs. Since the average life expectancy of Singaporeans is 85 years, people could buy flats with leases that cover them until the age of 95, Mr Wong suggested.