What Vers really means: Trade-offs, not jackpots

Owners must prepare for smaller payouts and tougher choices as the new scheme takes shape.

- Sing Tien Foo

Nearly half of Singapore’s HDB flats are already more than 45 years old. In towns such as Marine Parade, Toa Payoh and Bukit Merah, whole clusters are in the second half of their 99-year leases.

Flat owners, many of whom rely on housing as their main nest egg, face a sobering question: What happens when leases run down and home values start sliding?

To address these concerns, the Government first floated the Voluntary En Bloc Redevelopment Scheme (Vers) in 2018.

More recently, Minister for National Development Chee Hong Tat has pledged to unveil the framework before the end of this Parliament’s term. As details take shape, it is worth asking what Singaporeans can realistically expect.

WISHFUL THINKING THAT VERS WILL BE LIKE SERS

As a researcher who has studied real estate in Singapore for decades, my advice to HDB flat owners is this: Recognise that Vers is not Sers.

The Selective En Bloc Redevelopment Scheme (Sers), launched in 1995, also involved tearing down ageing flats and redeveloping the land. But that is where the similarity ends.

There is a fundamental difference between the two. Sers was driven by national land intensification goals. It allowed the state to reclaim valuable sites with high redevelopment potential, mostly in city-fringe estates where resale flats now command million-dollar prices.

Vers, by contrast, was conceived as a large-scale programme to give owners of ageing flats in lower-priority neighbourhoods in the redevelopment queue a way to sell their homes back en bloc to HDB in the last decades of their leases. It’s supposed to act as a big backstop against lease decay, subject to certain conditions.

That key distinction affects everything from how the schemes are designed to how owners are compensated.