View of HDB flats in Toa Payoh.
UPDATED: In his National Day Rally speech on Sunday (19 Aug), Prime Minister Lee Hsien Loong said the Housing and Development Board’s Home Improvement Programme (HIP) will be expanded soon to cover HDB flats built between 1987 and 1997.
Started in 2007, HIP currently covers HDB flats built up to 1986.
More: Home buyers looking for HDB flats may like to visit our Listings
Some 230,000 flats in various estates including Pasir Ris, Tampines and Jurong will benefit from the enhanced HIP.
PM Lee also announced plans for HIP 2, which aims to upgrade older flats that require a second round of upgrading. HIP 2 is expected to be launched in 10 years when the first flats here reach 60 to 70 years old.
Moreover, he stated that the Housing Board will roll-out a new programme called the Voluntary Early Redevelopment Scheme (VERS). Expected to start in about 20 years, this programme will allow homeowners to vote on whether to sell their HDB flats to the government once the age of their block hits 70 years.
VERS is part of the authorities’ long-term plan to continuously redevelop precincts and will enable homeowners to monetise their HDB flats before the lease expires.
Commenting, PropertyGuru’s chief business officer Lewis Ng said: “In our recent Consumer Sentiment Survey, 36 percent of Singaporean respondents expressed concerns about the depreciating value of older flats, while 35 percent are afraid of being unable to pay for adequate housing in their old age.
“Given this, PropertyGuru supports schemes to help Singaporeans maintain the value and liveability of their homes. As the government considers new initiatives such as VERS, we think it is important to bear in mind the affordability of replacement housing. This will be especially critical for a generation of Singaporeans who would be worried about the financial commitments for replacement homes – especially if they had retired by then.”
In agreement, OrangeTee & Tie’s head of research & consultancy Christine Sun said the three schemes appear to be well-rounded and innovative policies that can help HDB homeowners.
“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. 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.
“Most importantly, the new schemes ensure that there is sufficient land to be recycled for the next generation and housing will continue to be affordable to the younger people,” she noted.
However, Huttons Asia’s research head Lee Sze Teck pointed out that VERS does not reduce the uncertainty faced by HDB flat lessees.
“There is no certainty that people will vote in favour for the scheme 20 years down the road. 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.”
Furthermore, chairman of the Government Parliamentary Committee for National Development, Alex Yam, told Channel NewsAsia that VERS might generate enmity among HDB flat owners who want to sell and those who don’t want to.
“What sort of percentile (of consent) are you looking at? Are you looking at the same as the private sector?” He also raised the issue on how the Housing Board will determine the value of the flat and how CPF monies will be refunded.
More: Can you afford an HDB flat? Check your affordability now.