Buy-out of HDB units nearing the end of their leases likely in next decade: Chee Hong Tat, Singapore News

AsiaOne

6 days ago

The Voluntary Early Redevelopment Scheme (Vers) — a proposed Government buyback programme for Housing Board flats nearing the end of their 99-year lease — will 'likely happen' in the late 2030s, said Minister for National Development (MND) Chee Hong Tat.
In a wide-ranging interview with the local media on Aug 5, Chee said that his ministry will use the current term of Parliament of up to five years to 'develop the policy framework and parameters' for Vers.
This includes identifying possible sites where the scheme will be first offered, ensuring that there are sufficient homes for those involved to relocate to, and working out a 'fair' compensation package for residents whose flats are taken back early.
'We do not need to scale up Vers until sometime in the late 2030s when the older flats reach their 70-year mark,' said Chee, who was appointed MND minister on May 23.
'When we are ready, MND and HDB will engage Singaporeans on the framework and policy parameters to take in further and feedback. Our plan is to progressively offer Vers to selected estates in different parts of Singapore."
Asked about the possible issues Vers would bring, Chee said that he is mindful of the need to stagger re-development to prevent disruptions to residents living in the same estate.
'We don't want to end up in a situation where flats that are all about the same age… you end up having to do Vers for all of them at the same time,' he said.
Chee's remarks echoed then-Prime Minister Lee Hsien Loong's when he first announced Vers during the 2018 National Day Rally as a scheme to address the issue of lease decay and the resulting decline in value of older flats.
He said then that several older estates, such as Marine Parade, Ang Mo Kio and Bedok, were built in a 'tremendous rush' in between 1970s and 1980s to meet the housing shortage at that time.
'Therefore, if we do not plan ahead, 99 years later, all the leases in such towns will expire around the same time… and will be returned to the state in a few years,' added Lee. 'We will have to find new homes for a lot of people at once.'
Chee said that the compensation terms for Vers will be less generous than those chosen under Selective En-Bloc Redevelopment Scheme (Sers) as the flats chosen will be older, and hence, less financial upside.
The most recent flats selected for Sers were 606 units in Blocks 562 to 565 at Ang Mo Kio Avenue 3 in April 2022. This decision sparked discontent among several residents, who were concerned about having to pay more for a similarly sized replacement flat.
Only around five per cent of all HDB flats are suitable for Sers, according to MND.
Chee said that MND will 'focus our efforts and resources on Vers', adding that there are no plans to identify HDB blocks for compulsory acquisition and re-development through Sers. Second round of HIP for older flats
Separately, Chee announced that flats which had undergone Home Improvement Programme (HIP) will receive another round of structural upgrades and improvements.
The minister said that these flats, which had been spruced up through the programme when they were about 30 years old, 'should be good for another 30 to 40 years before they start to show their age again'.
Launched in 2007, the Government has spent about $4 billion on the HIP, upgrading close to 381,000 ageing flats as of March 2024.
Chee said that the upgrades to flats through HIP II will be 'more extensive' to last till the end of their 99-year lease.
These include adopting 'enhanced solutions' for spalling concrete, employing corrosion resistant repairs to older flats, and using microwave scanning to identify spalling occurring underneath the concrete surface.
'This will enhance the durability of repairs and help to improve the liveability of our older flats,' said Chee.
Spalling concrete is a common issue for older buildings, especially in areas with damp conditions such as kitchens and toilets, according to HDB's website.
The issue is largely caused by carbonation, a natural deterioration process that causes steel reinforcement bars in the ceiling to corrode and the concrete to crack.
He added that more details about HIP II will be announced during his ministry's Budget debate in 2026.
When asked if residents will be offered either HIP II or Vers, Chee said that it will not be the case.
Since Vers will be offered to flat owners progressively from their 70-year mark, the minister added these flats will need to undergo another round of upgrades through HIP II from around the 60-year mark to ensure that they remain liveable.
It is also possible that residents who are offered to sell their flats to the Government through Vers may not choose to do so, and stay until their leases run out.
'The Government will support them in other ways to keep their flats and their estates liveable and vibrant, including through upgrading programmes like HIP II, Silver Upgrading Programme and Neighbourhood Renewal programme,' said Chee.
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