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Ang Mo Kio Sers: Some owners upset with topping up money for similar-sized replacement flats, HDB exploring 'options'

SINGAPORE — When Madam Yong learnt that her 43-year-old public housing estate in Ang Mo Kio was chosen for the Selective En bloc Redevelopment (Sers) scheme in April, she soon found out that if she wished to move to a similar-sized flat at the allocated replacement blocks, she would have to fork out an estimated S$102,000. 

Ang Mo Kio Sers: Some owners upset with topping up money for similar-sized replacement flats, HDB exploring 'options'

Blocks 562, 563, 564 and 565 along Ang Mo Kio Avenue 3 (pictured) have been chosen for the Housing and Development Board's Selective En bloc Redevelopment scheme.

  • Four public housing blocks in Ang Mo Kio have been picked to undergo Selective En Bloc Redevelopment
  • Some residents living in those blocks may need to top up money to get a similar-sized replacement flat
  • HDB said that the compensation sums are only estimates and are based on recent transactions
  • It added that it is exploring "options" to assist these families

SINGAPORE — When Madam Yong learnt that her 43-year-old public housing estate in Ang Mo Kio was chosen for the Selective En bloc Redevelopment (Sers) scheme in April, she attended a meeting with the Housing and Development Board (HDB) to discuss rehousing options. 

There, an HDB officer told the 75-year-old retired teacher that if she wished to move to a similar-sized flat at the allocated replacement blocks, she would have to fork out an estimated S$102,000. 

Mdm Yong, who declined to give her full name, told TODAY: “Where will the money come from? I won’t have any money left if I pay this. I’m no longer working.”

Like Mdm Yong, six other residents of blocks 562 to 565 Ang Mo Kio Avenue 3 who spoke to TODAY said it was “unfair” that they might need to cough up extra money to buy a replacement flat of a same size at the nearby Ang Mo Kio Drive.

In particular, they are worried that the many seniors among the 600-odd households living in the estate would be unable to afford a replacement flat without downsizing to a smaller unit. At their age, these seniors would most likely be unable to get a housing loan to pay the shortfall.

In response to TODAY’s queries, HDB stressed that it understands the concerns of these residents and will explore ways to help them.

It added that the compensation amounts, which are only estimates, were based on recent transactions of comparable flats in the vicinity. 

Flat owners will only be told the actual compensation amounts they will receive after assessments by an appointed professional private valuer are completed later this year.

HDB also said that the replacement flats come with 99-year leases, which would be twice as long as that of the old flats.

This was a point echoed by property analysts, who gave this reason for why it was not uncommon in past Sers exercises for prices of the replacement flats to cost more than the compensation that residents got for their old flats.

HDB has said that homeowners would generally be able to buy a replacement flat of a similar flat type with the compensation based on estimates. Yet, the affected Ang Mo Kio residents noted that the same flat type does not equate to a unit of the same size. 

Four-room flat owners can expect to receive an estimated S$396,300 to S$468,500 for their 92-sqm to 93-sqm units, including reasonable expenses such as a S$10,000 removal allowance, as stated in a booklet provided by HDB to residents.

That amount is comparable to a smaller 80-sqm four-room flat at the replacement blocks, which is estimated to cost S$396,000 to S$487,000 before a Sers grant of up to S$30,000.

For a 90-sqm four-room flat, it is estimated to cost S$438,000 to S$563,000 — likely more than they would have received in compensation.

Mr Sam L, 59, a semi-retired resident who works part-time in the semiconductor industry, called it an apples-to-oranges comparison. 

He added that he would have to dip into his retirement funds to buy a similar-sized flat at the replacement blocks.

It’s really stressful talking about it. All I can do is wait for the (actual) valuation and see what the compensation is going to be like.
Ms Chen, a 43-year-old resident in Ang Mo Kio

Among the residents who spoke to TODAY were three parents of young children who had bought their flats with the intention to live there for the rest of their lives.

A 43-year-old resident, Ms Chen, had moved to Block 562 only about six months ago and after spending almost S$80,000 to renovate and furnish her four-room flat. 

She said HDB estimated that she will need to top up about S$150,000 for a similar-sized four-room replacement flat.

“Of course, (the HDB officer) told me about the S$30,000 Sers grant and other subsidies, but these are not enough at all. With the inflation now, renovation costs five years down the road is going to cost a bomb for sure.”

She added: “It’s really stressful talking about it. All I can do is wait for the (actual) valuation and see what the compensation is going to be like.”

Besides buying a replacement flat, residents have the option to apply for a flat elsewhere with the Sers rehousing benefits under the Built-To-Order (BTO) exercise or sale of balance flats exercise with a 10 per cent priority allocation.

Ms Rachel Chua (pictured) bought a four-room flat in Ang Mo Kio seven years ago to be close to her parents.

Credit analyst Rachel Chua, 40, who bought a four-room flat in the estate seven years ago to be close to her parents, questioned what she saw as an overly stringent criteria that allows residents to apply for a BTO flat that has a delivery possession date no later than March 31, 2029. 

She added that she felt “cheated” when she learnt that a new BTO project is set to launch in August located near Ang Mo Kio Central 2 and 3, slightly closer to the Ang Mo Kio MRT Station compared to the replacement site on Ang Mo Kio Drive.

Questioning why those BTO blocks could not have been chosen for the Sers replacement, Ms Chua said: “Ang Mo Kio Central has more amenities including a polyclinic next to it that old folk can have easy access to, markets, childcare and tuition centres for families.”

Project manager Leonard Goh, 37, who lives in a three-room flat, said that the upcoming Tavistock MRT Station along the Cross Island Line will be built across the road from his existing flat and that the first phase of the MRT rail line is set to begin service in 2030.

This would not be considered in the valuation of the Sers flats based on the announcement date in April, he noted. 

“If the Sers arrangement is fair, I believe there won’t be so many unhappy residents. Something must be very, very wrong,” Mr Goh said. His 88-year-old grandmother, 65-year-old aunt and uncle living in three other separate flats in the estate will also be affected by the rehousing scheme. 

Ms Nadia Ahmad Samdin, the Member of the Parliament for the area, told TODAY that she has been hearing the concerns from the affected residents, as well as their children living in other areas, since the Sers announcement in April.

These included worries about needing to top up cash for replacement flats of similar sizes, outstanding loans, having to pay a resale levy, as well as other emotional concerns since many of them thought that they would be retiring in these homes.

Ms Nadia said that she has shared these concerns with HDB and has been assured that it is looking into these matters “seriously”.

“HDB is currently continuing the one-on-one Sers connect sessions with residents to talk them through the next steps including financial considerations and rehousing options,” she added.

“Upon completion, I trust that HDB will have a better overview of the scale of the challenges faced by our Cheng San-Seletar residents.” 

NEW FLATS HAVE NEARLY DOUBLE THE LEASE: HDB

In response to TODAY, the Housing and Development Board (HDB) highlighted the old age of blocks 562 to 565 on Ang Mo Kio Avenue 3 that have come under its Selective En bloc Redevelopment (Sers) scheme.

By the time owners move out of their flats, estimated to be around end-2027 for those moving to the replacement flats, these flats in the four blocks will be nearly 49 years old.

“Generally speaking, for flats with similar size, location and other attributes, older flats with shorter remaining lease would have a lower valuation than flats with a longer remaining lease,” HDB said.

The estimated compensation for the Ang Mo Kio Avenue 3 flats, before any expenses provided by HDB to defray moving costs, are: 

  • Three-room (68 sqm): S$290,000 to S$340,000
  • Three-room (82 sqm): S$340,000 to S$390,000
  • Four-room (92/93 sqm): S$380,000 to S$450,000

HDB will also pay flat owners a S$10,000 removal allowance as well as pay for the stamp and legal fees for the purchase of a comparable replacement flat. 

The removal allowance and the fees provided ranges from an average of S$14,800 for a 68-sqm three-room flat to S$17,400 for a four-room flat.

Flat owners were offered replacement flats on Ang Mo Kio Drive so that they may continue to live in a familiar environment. 

These replacement flats are located close to the Ang Mo Kio and Yio Chu Kang MRT stations, as well as to shops and eateries such as the Cheng San Market and Cooked Food Centre.

HDB stressed that the replacement flats’ 99-year lease will be almost double the lease of the existing flats by the time residents move out in end-2027.

“The new flats are priced with a generous subsidy, making their prices considerably lower than comparable resale flats in the vicinity,” HDB said, adding that eligible flat owners will also receive a Sers grant of up to S$30,000 to buy a replacement flat.

The estimated selling prices of replacement flats are:

  • Two-room flexi (36 sqm to 46 sqm): S$169,000 to $247,000
  • Three-room (65 sqm): S$292,000 to S$384,000
  • Four-room (80 sqm): S$396,000 to S$487,000
  • Four-room (90 sqm): S$438,000 to S$563,000

While there are no prices of comparable resale flats nearby for two-room and three-room units, four-room flats ranging between 85 sqm and 90 sqm with about 80 years remaining on their leases have sold for S$507,999 to S$670,000, HDB said.

Based on the estimate, flat owners will generally be able to buy a replacement flat of a similar flat type with the compensation provided, though those looking for larger flat sizes such as 90-sqm four-room flats may have to top up the amount, HDB added.

For flat owners who do not wish to buy a new flat and do not sell their units on the open market, they may also choose to take up an ex-gratia payment of S$30,000 plus the Sers grant, if eligible, on top of their compensation. 

Collapse to view
A view of housing blocks for Ang Mo Kio Avenue 3. One analyst said that the situation playing out for residents there undergoing a rehousing scheme may be a reflection of the ageing population in Singapore.

SERS NOT A '1-FOR-1 EXCHANGE'

Property experts said it is logical that a replacement flat, with a fresh 99-year lease, would be valued more than a homeowner's existing flat since it will likely fetch a much better price compared to if the owner had sold the old flat in the open market.

Ms Wong Siew Ying, head of research and content at property firm PropNex, said it is not surprising that owners have to top up money to get a similar-sized replacement flat, especially with the high cost of BTO launches in mature estates.

She added that for Sers exercises, there is no automatic “one-for-one exchange” for a replacement flat.

Another analyst, Dr Lee Nai Jia, said there may be an impression that a flat being selected for Sers is akin to receiving a windfall, but many people do not realise that the supposed “windfall” only happens upon selling the replacement flats after meeting the five-year minimum occupancy period.

Dr Lee, deputy director of the Institute of Real Estate and Urban Studies at the National University of Singapore, noted that there have always been “hardship” cases involving older residents who cannot take up new housing loans in Sers exercises. 

No public data on the compensation amounts and prices of replacement flats are available. 

Initially, people thought that Sers was a gift, but they do not realise that it comes with strings attached
Property expert Lee Nai Jia

Dr Lee added that the situation playing out for the Ang Mo Kio Avenue 3 residents may be a reflection of the ageing population in Singapore, which he said could make Sers a more complex issue that may have political consequences in the future as the country continues to age.

He noted, though, that in the 2014 Sers exercise in Tanglin Halt, there did not seem to be many residents who raised issues about compensations. 

This could be because the housing market was on a downtrend at the time. Most of the Tanglin Halt residents also lived in three-room or smaller flats, which has had relatively stable prices over the years compared to larger flats.

“Initially, people thought that Sers was a gift, but they do not realise that it comes with strings attached,” Dr Lee said.

We are looking at the residents’ feedback and will continue to explore options to assist these families.
Housing and Development Board

HDB said that it is aware of residents needing to fork out extra money to buy a flat closer to the size of their existing unit.

“We understand these concerns, especially from seniors who have informed us that they do not need the fresh 99-year lease that comes with the new replacement flats,” it added.

“We are looking at the residents’ feedback and will continue to explore options to assist these families.

"We will also continue to guide and support the other residents of blocks 562 to 565 on Ang Mo Kio Avenue 3 in their journey through the entire Sers process.”

HDB gave no details on what these “options” may be.

Mr Sam L, the semi-retired resident, suggested that the public housing authority make the replacement flats more affordable for older residents by allowing them to buy flats with the same number of years left on the lease as their existing units.

SOME RESIDENTS START PETITION 

Over the past month, Mdm Yong has helped to start a petition appealing to Prime Minister Lee Hsien Loong, for him to get HDB to make a “more reasonable adjustment” to the compensation amounts and the pricing for the new flats.

The petition letter was signed by more than 40 residents of Block 563, while another petition addressing similar concerns also had more than 40 signatures from residents of other blocks, Mdm Yong said.

The two letters were submitted together to one of Mr Lee’s staff members. Less than a week later, she received a reply from HDB saying that the statutory board is looking into their concerns.

Instead of returning their flats to HDB, Sers residents also have the option of selling their Sers flats with the rehousing benefits on the open market before March 31 next year.

Already, some residents have listed their properties for sale online, with one four-room flat at Block 563 being listed as high as S$850,000 on real estate portal PropertyGuru, twice as much as the last highest transaction for a four-room flat in the block that was sold in February last year.

Property agent Jay Tan, who is representing one of the sellers in the estate, said that although he has some potential buyers hoping to get the rehousing benefits after failing to get a BTO flat, not many will pay the steep price tag for a Sers flat there.

The sellers, however, are caught in a bind, the 29-year-old agent added. 

“If they sell lower, say, around S$650,000 and they want to buy a similar flat in the area, they get no benefit out of the move. But if they get the (replacement) flat, then that would cost them more money.”

Related topics

hdb Sers relocation HDB flat Ang Mo Kio property

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