If you’re currently staying in a HDB flat, you might already know that your flat technically isn’t yours forever – all HDBs in Singapore have a 99-year lease from the date of completion. At the end of your lease, what theoretically happens is that the flats are forfeited by the current occupants, and are returned to the government. Why ‘theoretically’? Well, it’s because it has never happened before. Well, not to HDBs yet at least.
Image credit: Sherwin Ng
What is SERS?
Short for Selective En bloc Redevelopment Scheme, SERS is basically a strategy that was first launched in 1995 by the government to renew and transform ageing housing properties in old estates.
As with all things, HDB flats experience wear and tear over time. As they get older, the cost of maintaining that estate increases, to the point where it’ll get increasingly bo hua to maintain the upkeep of that estate. Repairs will get more frequent and more costly, and the extension of its shelf life will decrease over time. To save on costs and a whole lot of headaches, the government may choose to launch SERS for that estate – basically, taking it back and either redeveloping it or completely demolishing it and building a new development in its place.
Take note that SERS is quite different from the usual En Bloc Sales that you may have heard of. The main difference is that SERS only applies to public housing estates (i.e. HDBs), whereas En Bloc would instead apply to private properties such as condos or commercial developments.
Does my HDB have en bloc potential?
Well that depends. If you’re living in a fairly mature estate like Toa Payoh, Tiong Bahru or Redhill then yes, there is definitely a potential for SERS. However, if you’re living in fledgling estates like Punggol, Canberra or Sengkang then no…probably not. As a rule of thumb, flats can only qualify for SERS if they are at least 50 years old.
Assuming your HDB passes the age check, other factors such as location and its current design utility comes into consideration. For example, HDB blocks back in the day were designed and built more spaced apart, as compared to the more closely packed blocks of today. Thus, it would be somewhat of an incentive for the government to redevelop the entire area, so as to be more efficient with the land space by increasing the population density by packing more blocks and flats within the same land space.
When it comes to property, location is a big determining factor. And so if your current place is near places like a MRT station, bus interchange or a shopping mall, then that will increase your chances as well!
How does HDB en bloc (SERS) work?
Assuming that your HDB is selected for SERS, here’s a quick glance on what the entire process and key milestones look like:
1. Announcement and Exhibition
First, you’ll receive notification from the HDB that your flat is selected for SERS. Congratulations! The HDB will then set up a SERS exhibition near your current home. There, you’ll be able to ask questions about the SERS process, as well as learn about the new estate that the HDB will be relocating you to.
2. Flat Valuation
A professional private valuer will then make an appointment with you to drop by your place, to assess the market value of your flat. Impressions do matter, so having your house spick and span might give you a shot at a higher valuation!
Image credit: HDB
3. SERS Connect and Precinct Survey
After that, you’ll be required to head down to the main HDB office at Toa Payoh, to process all the necessary paperwork. You can also express your interest on your preferred type of flat, which will help the HDB decide on which replacement flat is best for you.
You’ll also have the opportunity to participate in a survey to determine what kind of amenities your new estate might have (e.g. playground, murals), as well as its new name!
4. Compensation Notice and Rehousing Choice
Subsequently, HDB will notify you of how much compensation you’ll receive, based on your flat’s market valuation. You’ll also get to choose your new home, either from the designated replacement site or somewhere completely new altogether, based on the various rehousing options available.
Example of SERS Projects and their designated replacement sites
Image adapted from: HDB
If you choose to go for the replacement site, you’ll get a small subsidy for your new flat, which can be used to pay off the balance, or to use for renovation. However, if you choose to head somewhere else totally, bear in mind that you’ll have up to a year to find a home under the HDB’s public sales scheme (i.e. no private condos or landed properties) if you want to retain the subsidy and housing benefits.
5. Registration and Selection of your new home
If you decide to go ahead with the replacement site, all you have to do is to just submit a new application to register for your new flat. As part of the process, HDB will provide you with all the important deets, like the sales brochure and price lists.
That being said, some of us may have had really awesome neighbours that we’ve grown close to over the years, and thus wouldn’t want to be separated from them because of SERS. Fret not, because you and your neighbours can opt for the Joint Selection Scheme, where a single queue number will be given to you as a group, and you’ll be able to select your flats together.
6. Key Collection and Moving Out
When the big day arrives, you’ll then head down to collect your keys and make payment for your new flat. After this, you’ll have four months to renovate and move into your new home!
Image credit: My Nice Home
Past and Ongoing SERS Projects
There have been over 70 completed SERS projects since 1995 when the scheme first started. On a quick glance, most of the projects are in fairly old estates, such as Tiong Bahru, Toa Payoh, Dover and Clementi.
There are currently three SERS projects underway, with the latest one being at Macpherson Road. According to the HDB, the ‘oldest’ SERS project involving Tanglin Halt/Commonwealth Drive has more or less been completed, and the newer ones involving West Coast Road and Macpherson are currently underway, with the replacement site scheduled to be completed over the next two years.
Will I get a handsome profit from SERS?
Generally, getting selected for SERS is almost akin to striking TOTO. This is because you’ll more or less be guaranteed a pretty handsome payout from the government, based on the market value of your place. Of course, this will mean a higher profit margin, as compared to selling to, say, an individual, where they’ll try to negotiate for a lower price.
On top of the compensation paid out, you’ll also score various grants and waivers, which can go toward your new place – be it the replacement site or somewhere else. For example, you can get up to $30,000 to offset the cost of your replacement flat, and another $10,000 for removal or moving of bulky items like furniture.
Assuming you’re moving into a brand new estate, your flat will come with a renewed 99-year lease. You would have also got to purchase that at a subsidised cost, which means a better profit margin when you decide to sell eventually. Apart from the hassle involved in paperwork and moving to a new place, SERS is generally a good thing for everyone involved.
Is SERS a good property investment strategy?
You might wonder if it’ll be viable to invest in ageing properties, in the hopes of it being sold en bloc and thus scoring you a hefty bang for your buck.
Well, you technically can, but we would advise against it.
As shared by property agent Angela Cheong in our previous piece on property investing in Singapore, the en bloc strategy is highly speculative, and not all ageing properties are guaranteed to go en bloc. As Angela shares, there is no actual guarantee that the property you’re buying will be selected for SERS, and if it doesn’t, you’ll be stuck with it until you can eventually sell it off.
The government has also previously cautioned against betting on SERS speculation, and not to assume that all old HDBs are automatically eligible for SERS. After all, only 4% of all HDBs have been selected since 1995, which aren’t very good odds if you ask us.
With all that being said, if you’re certain you’ve done your due diligence and sure of your decision, then purchasing an ageing HDB early will be the way to go. If it eventually is selected for SERS, then congratulations!