RESIDENTIAL PROPERTY | Staff Reporter, Singapore

New housing policies could make housing affordable to younger generations

It will give a boost to the ageing flats in the HDB resale market.

The housing policies which Prime Minister Lee Hsien Loong eye to progressively roll out will ensure land sufficiency and more affordable prices for the next generation, OrangeTee and Tie head of research and consultancy Christine Sun said.

These policies include the Home Improvement Programme (HIP) which will start soon, the HIP II which is eyed to start after 10 years, and the Voluntary Early Redevelopment Scheme (VERS) which will roll out after 20 years.

“As most flats will be upgraded twice before the lease expires, Singaporeans may not need to worry too much about the depreciating value of an aging flat now,” Sun explained. “In fact, these schemes that ensure older flats are rejuvenated when the time comes, can help existing flat owners maintain a high standard of living and continue to retain the value of flats.”

ERA Realty key executive officer Eugene Lim also thinks that VERS could provide ‘a much needed boost’ to the HDB resale market in terms of prices and transactions, specifically for ageing flats.

However, Huttons thinks that the solutions presented by the government may not reduce the uncertainty that clouds HDB flat lessees.

“By promising that the government will help you get another flat to stay in should you outlive the lease is scant relief to the lessees as it means the value of the flat is equivalent to zero,” Huttons explained.

According to Lee, the VERS, which is targeted to roll out in 20 years, will allow residents to vote on whether they will allow to have their flats redeveloped before the lease ends with a certain compensation which is lesser than the Selective En bloc Redevelopment Scheme (SERS). They can also choose to vote no and stay in their flats until the leases expire.

“There is no certainty that people will vote in favour for the scheme 20 years down the road,” Huttons commented.

For Lim, several concerns should be looked into in terms of the VERS. These include the minimum level of consent required from tenants of each estate to undergo VERS, the compensation, those who will be forced out of their homes, and if the said activity could fuel yet another speculative activity.

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