The voluntary enbloc redevelopment scheme (VERS) that the HDB will introduce in 20 years time is a good scheme. It allows HDB owners to sell their 70 year old flats back to HDB and get cash.
But the owners should have a realistic expectation. They cannot expect a windfall gain.
Why?
You are selling back to HDB. HDB will give you a fair price, but it will not be a windfall.
Remember, the government has plenty of land, so HDB does not need to offer you a windfall price for your old HDB flat to tear it down. It is easier for HDB to buy empty land from the government.
After you get the cash from the VERS, you should expect to pay three times of that amount to get a similar flat in the same location.
Why 3 times? You are getting a fresh 99 year lease instead of a 30 year lease. You are also getting a new flat to replace an old flat.
If your old flat has a lower density, maybe, you can get a better price, so you do not need to pay 3 times to get a new flat.
You can buy a smaller flat or move to a remote location. That is a sensible move.
Still, the VERS gives HDB owners an option, but it will not be a windfall.
Tan Kin Lian
But the owners should have a realistic expectation. They cannot expect a windfall gain.
Why?
You are selling back to HDB. HDB will give you a fair price, but it will not be a windfall.
Remember, the government has plenty of land, so HDB does not need to offer you a windfall price for your old HDB flat to tear it down. It is easier for HDB to buy empty land from the government.
After you get the cash from the VERS, you should expect to pay three times of that amount to get a similar flat in the same location.
Why 3 times? You are getting a fresh 99 year lease instead of a 30 year lease. You are also getting a new flat to replace an old flat.
If your old flat has a lower density, maybe, you can get a better price, so you do not need to pay 3 times to get a new flat.
You can buy a smaller flat or move to a remote location. That is a sensible move.
Still, the VERS gives HDB owners an option, but it will not be a windfall.
Tan Kin Lian
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ReplyDeleteCondo also 99 years .Are they tenants also??Will their value go to zero??
ReplyDelete