In his National Day Rally speech this year, Prime Minister Lee mentioned that the government will do all they can to maintain the value of HDB flats even as they age.
VERs a good way to ensure HDB flat retain their value as they age?
One of the ways they propose to keep HDB flats a worthwhile asset for their owners is through the Voluntary Early Redevelopment Scheme (VERs). While the earliest the scheme will be implemented is in 20 years’ time, there are quite a number of considerations to take while planning for the eventual.
Many have recently taken to voice their concerns about the diminishing leases on HDB flats.
The public housing scheme started in the 60s. Though no HDB flat has yet completed its 99-year lease, it is only natural to revisit the scheme with regards to whether it has retained its original intent and explore what changes can be made to the current schemes to do just that.
Akin to the en bloc process in the private property sector, VERs aims to allow owners of older HDB flats to collectively decide if they would like to their flats back to the government.
Those who may be most affected by flats with short periods of lease left include the elderly who may feel they are stuck with their flat and are unable to finance their retirement efficiently; and also the young who may outlive the lease on their resale flats.
The VER scheme was announced early so as to allay fears that the resale HDB market will languish as they age.
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VERs versus SERs
Before the announcement of VERs, there was SERs (Selective En Bloc Redevelopment scheme). The latter has taken flats from 76 sites back and redeveloped them since 1995. Owners of flats which have been taken back by the government via SERs receive a compensation and a new flat in another location.
The VERs scheme will, however, offer fewer benefits that SERs as the flats which qualify for VERs may already have undergone 2 upgrading process HIP (Home Improvement Programme) I and HIP II.
The latter was also announced recently to allow older HDB flats to go through 2 upgrading works 2 times to ensure their liveability.