The response of HDB homeowners to the newly announced Voluntary Early Redevelopment Scheme (VERS) will hinge on its particulars, property experts told TODAYonline.
“It boils down to how (it) will be implemented, and how much flat owners will be compensated” noted ZACD Group executive director Nicholas Mak.
“What is the threshold needed to secure approval for the scheme? Will compensation be enough to buy another flat to give the flat owner the same standard of living?”
Singapore University of Social Sciences economics professor Walter Theseira agrees that the offered price will be the most vital consideration. Nevertheless, the scheme could fund itself if prices paid to HDB homeowners are “not unreasonably high”.
Other key issues that need to be sorted out is the government’s criteria for choosing an HDB precinct to undergo VERS and the pacing of redevelopments, as well as the authorities’ terms and conditions.
On Sunday (19 Aug), Prime Minister Lee Hsien Loong announced several fresh initiatives for HDB flats. Among them is VERS, which will enable HDB homeowners to vote on whether to sell their HDB flats to the government once the age of their block hits 70 years. The offered price is expected to be less than what is offered for the mandatory Selective En bloc Redevelopment Scheme (SERS).
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While CIMB economist Song Seng Wun and MP Alex Yam believe that the prevailing rules on en bloc sales of private properties could serve as a guide for the scheme, the latter warned that HDB homeowners should not expect to profit from VERS just like in the case of collective sales.
“There are, I think, going to be a lot more conditions tied in with VERS… We didn’t go through so many cooling measures to try to dampen the private en bloc market so VERS can take over,” said Yam, who is also the chairman of the Government Parliamentary Committee for National Development.
He noted that there is sufficient time for the public to provide feedback and for the government to iron out its particulars, given that there are still about two decades before the scheme kicks,
However, International Property Advisor chief executive Ku Swee Yong fears that VERS could push up the cost of HDB resale flats, as this could spur homeowners to demand higher prices even for units whose leases are nearing its end.
More: Can you afford an HDB flat? Check your affordability now.