More than 80% of Singaporeans live in HDB flats. And a constant concern of many owners is the time ticking down on their lease and how that is affecting the value of their property. If you own an older flat, you are most likely worried about its resale value. If you’re like most Singaporeans, you are very good at researching everything related to property. So, you’ve probably read about HDB's SERS, which refers to Selective En Bloc Redevelopment Scheme.

Table of Contents

HDB’s Selective En Bloc Redevelopment Scheme

What Factors Does HDB Consider for SERS?

How Much Money Will We be Paid in SERS Compensation?

Which Are the Most Recently Chosen Flats for the SERS?

Why do some buyers deliberately look for SERS flats?

Would it make sense to buy an old HDB resale flat, thinking that HDB might select it for SERS?

HDB’s Selective En Bloc Redevelopment Scheme

SERS is one of the government’s urban redevelopment strategies. HDB introduced it in 1995 to redevelop residential properties that are getting old and rundown. SERS is basically how HDB implements the en bloc process. 

If you live in an HDB block that hit the jackpot by being chosen for redevelopment under SERS, HDB will relocate you to a new flat. And, you won’t have to worry about the lease running out because this flat will have a fresh 99-year lease.

The main differences between selling your unit under SERS or in a private en bloc sale are as follows:

• When owners sell their property in a private en bloc sale, they have a vote. But if they own an HDB flat, they don’t get a vote. They must allow HDB to move forward with the redevelopment and accept their fair compensation package.
• Owners who sell their property in a private en bloc sale are often persuaded by the premium price they’re being offered. Developers will offer to pay 30% to 60% more than what the owners could get selling their flat individually on the open market.

When HDB is planning a redevelopment under SERS, they will inform owners at least five years in advance. Their goal is to take possession of the property and redevelop it to allow the nation to occupy more people. Owners will be moved to a flat nearby and enjoy the newly built 99-year lease flat.

What Factors Does HDB Consider for SERS?

The following three factors have apparently been common denominators over the years when HDB decides on properties to be redeveloped under SERS:

1. Age of the Flats

Older properties have historically been the ones selected for SERS, with many of them being 50 years old or older.

2. Location of Property

The location of the property is also a big factor. HDB needs to be confident that the land has appreciated enough in value for HDB to acquire it. This must be a financially sound decision.

A good example would be when HDB chose to acquire the flats at Queenstown in the early 2000s for SERS. Queenstown was once considered a “heartland” estate, but this was way back in the ‘60s. Over the following decades Queensland evolved and by the time it was selected for SERS it had become a prime city-fringe district.

3. Flats That Don’t Make the Most of Their Land

Before the ‘90s, HDB flats did not maximise their land use because they didn’t have to. At that time, they measured density, building 200 dwelling units per hectare of land. Today, housing developers follow the plot ratio system, whereby gross floor area is divided by land area. 

There’s a good chance that these types of under-utilized areas of land will be at the top of the list for redevelopment under the SERS.

Lucky Me! HDB Chose My Flat for SERS. What Happens Next?

If HDB selected your flat for the SERS, it will be several years before the process is completed.

Here is a list of SERS milestones that you’ll experience as the process unfolds:

How Much Money Will We be Paid in SERS Compensation?

The amount of compensation that you’ll receive will depend on the market value of your HDB SERS flat. These are the factors that HDB will consider when determining the valuation of your flat:

• On which floor your flat is situated
• Renovations and/or improvements
• Type of flat and size
• Length of time remaining on lease
• Transaction rates in your neighbourhood

Also, there are other types of allowances provided to owners under SERS. You will get a $30,000 SERS grant to help pay for your HDB replacement flat and other costs. These include conveyancing fees and stamp duties that must be paid when you buy a new flat.

You will also receive $10,000 as a “removal allowance” to help pay for moving costs and furnishings that could not be moved from your previous home like cabinetry, etc.

Which Are the Most Recently Chosen Flats for the SERS?

It used to be that three HDB properties underwent SERS every year on average. But since 2012 that average has gone down to one HDB property every two years. The most recent SERS properties are West Coast Road, which was chosen in 2016, and MacPherson Lane, chosen in 2018.

Here is a list of the SERS properties over the past decade:

You can see a list of all in-progress as well as completed SERS projects here.

Why do some buyers deliberately look for SERS flats?

The main reason for buyers seeking out SERS flats is for the rehousing benefits. When you sell your SERS home, the new owner would be eligible to receive the rehousing benefits, not you. They would get the entire compensation package.

Sometimes, it’s the location of the replacement flats that appeals to them. The new site might be in a highly desirable estate near schools, shopping malls, restaurants, and transport hubs. Once they buy the SERS flat, they would be entitled to a flat in the replacement site.

Would it make sense to buy an old HDB resale flat, thinking that HDB might select it for SERS?

Being blunt, no. When you buy an aging HDB resale flat, the odds that HDB would choose it for SERS are very low. Only 4% of all HDB flats have ever been chosen for the SERS since 1995 when the scheme was first launched.

Furthermore, aging HDB flats, which are supposedly more likely to be chosen for SERS, also have leases that are decaying faster than the leases on newer flats. Read more on How Can HDB Flat "Owners" Deal with Lease Decay?

Unlike with private en-bloc sales, owners of HDB flats are not paid hefty premium prices under SERS.

Disclaimer: The information provided in this article does not constitute legal advice. We recommend that you get the specific legal advice you need from an experienced attorney prior to taking any legal action. While we try our best to make sure that the information provided on our website is accurate, you take a risk by relying on it.

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