Comment: a story about one HDB flat over two generations

SINGAPORE: The redevelopment of aging properties is an important phase in the life cycle of urbanized cities with limited land stock.

For a small country like Singapore, when houses are built in the early years of the country, redevelopment becomes more and more relevant, both from an economic and urban renewal perspective.

Outdated houses, if they are not redeveloped, have important implications for the community and for individuals as a result of changing demographic, lifestyle and housing needs.


For a typical family of two parents with two children living in a typical 4-room flat, after both children are married, have set up their family and left the flat, their parents end up in two rooms in their flat.

Daily chores to maintain their flat can unnecessarily burden the old couple who are fifty or sixty. So adjusting the right size to a smaller flat is an attractive option to make money with their large flat and meet their financial needs, especially after retirement.

The option works perfectly, if the balance of their flat is still relatively long and a good price from a buyer can reach the required financing. This scenario applies in the event that they bought the flat directly from the HDB at the age of 25 and retire at the age of 65.

By then their house will be about 45 years old, taking into account the construction and waiting time of about five years, with a balance rent of about 54 years.

Family Singapore

A family that runs in Singapore. (Photo: Gaya Chandramohan)

However, if the parents choose to stay in their flat until their last days, they can sell it to the government via the leaseback scheme and have some money for their golden years.

If they do not, their children can inherit the old flat after their parents have transferred a balance of about 30 or less years, but choose to sell it

Eventually, the fixed value is likely to fall as it reaches the tail of the lease term and is eventually returned to the state together with the land when the lease term expires.


But do their children have to wait for the rental agreement to expire?

Some say why not, because they can be chosen for the selective and bloc-redevelopment scheme (SERS). But suppose they do not, then it is unlikely that most older flats with a short balance lease will deduct the premiums on the resale market.

Potential buyers will probably only pay the utility value of the flat, taking into account the remaining lease term.

The family also has to take into account that SERS concerns only about 4 percent of HDB flats with significant redevelopment potential, provided that there is sufficient space to build replacement flats in the neighborhood.

SERS MacPherson Lane

Three apartment buildings at MacPherson Lane have been selected for the Selective En bloc Redevelopment scheme. (Screengrab: Google Maps)

Many say that despite the low probability of SERS, a large number of buyers will still flock to the resale market to pay high prices for old flats in good locations – but this is a scenario that is less likely in the future.

Why? Since Minister of National Development last year, Mr. Lawrence Wong tackled this problem of irrational housing choices of some buyers in a Facebook function and explicitly stated that land on which lease contracts have expired is returned to the government, the ground has shifted.

The issue of the expiration of HDB leases has since remained in the limelight and the relationship between social housing and social housing makes the issue even more complicated.

Heated debates between parties ensued, between cynics who place little hope for possible government intervention and others who stick to unrealistic expectations in the hope that the government will at least hand out "sweets" when HDB flat leases expire.

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Prime Minister Hsien Loong cleared the National Day Rally with the announcement of the extensive Home Improvement Program (HIP II) and the Voluntary Early Redevelopment Scheme (VERS) for tackling this hot-button problem.

PM Lee explained in detail why lease extension is not an economically sustainable solution, in line with the notion of "sustainable development" as defined in the United Nations report on the World Commission on Environment and Development (1987) – that is to say:

Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

Lease extension is not a desirable response to the paradox of outdated flats and a long-standing social compact of housing as a form of social security from the perspective of urban land use and preservation of economic value.

Land reclamation is not a panacea for scarcity problems in many countries, including Singapore. Long-term spatial planning is necessary to ensure that there is sufficient land for future land use and accommodation needs.

Lease expansion without intensifying use hampers the long-term growth of a city. It prevents land optimization, prevents new, innovative land use and leaves open questions about the quality of land use.

Distinctive HDBs (8)

HDB flats on Tampines Avenue 9. (File photo: Gaya Chandramohan)

If old, low-rise blocks are retained by extension of the lease, more land should be taken into account for new public housing flats to meet the growing demand from residents, including support infrastructure for new cities such as roads, sewers and facilities such as schools, markets and neighborhood stores.

There are also limits to the heritage argument of preserving huge parts of homogeneous HDB surfaces that can have few unique architectural features.

While some may argue for the need to keep some older HDB flats to preserve the unique charm and character of the HDB neighborhoods, these remain HDB blocks, which are likely to be built to last. as long as their lease contracts last, more expensive with time, and pressed residents and public treasury.

The last one someone wants is that beloved HDB flats become obligations. Old and derelict buildings can suffocate urban renewal, which is in conflict with the preservation of a modern city.

Functional and economic obsolescence can also occur earlier as a result of changing lifestyles and demographic data. Although smart home features can be attractive for younger, technically savvy families, it includes amenities such as anti-slip floor tiles, handles and ramps that are more useful as people age.


Back to our family of two parents whose children have moved. If the parents want to get older at home but do not want to subscribe to the leaseback scheme, precautionary measures have now been taken to soften that scenario.

Although details are pending, the newly proposed VERS can remove their concerns about lapsing leases, giving HDB residents an option to vote to return their balance leases to the government. But it depends on whether their neighbors say yes.

hdb 99 year lease file photo

HDB flats occupy the Singapore skyline (Photo: Jeremy Long)

HIP II, on the other hand, will help improve and repair ordinary wear and tear, and provide them with a living space that is safe, safe and pleasant even after 60 years.

Most importantly, the government's position that it does not seek lease renewal is firm and clear, and as a warning to those buying older flats that the government does not intend to permit an extension of the lease. So that should moderate the real estate market.

READ: A strong political commitment to housing is exactly what the younger Singaporeans need, a comment


Perhaps it is a question of a change in the opinions of people about public housing. One must be aware of the goals of public housing – that is, the promotion of home ownership while at the same time ensuring affordability and sustainability.

Public housing, in the form of BTO flats, is aimed at providing a life at home for one household – and the relocations at the National Rally of the day have strengthened this goal in the light of expiring lease contracts.

If public housing is exploited for private benefit, and homebuyers continue to speculate in old flats, future generations may have to bear the consequences of higher house prices, as land resources gradually run out over time.

Sing Tien Foo is director of the Institute of Real Estate Studies (IRES), National University of Singapore. Chia Liu Ee is a research analyst at the same institute.

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