SERS Potential Locations & Compensation: How to win the HDB SERS lottery?

Wondering why many HDB homeowners are hoping that their flats could be selected for the SERS scheme? Here’s how much compensation you can look forward to if you do strike the “lottery”.

SERS Compensation

1. Compensation based on the valuation of the house at market value. This will depend on factors like the unit’s floor, renovations done to the home, size and type of the unit, length of lease remaining, and past transactions done in the area.
2. Up to $30,000 SERS grant.
   Eligible flat owners may receive up to $30,000 and take out a housing loan from HDB to purchase their replacement flat.
3. $10,000 for removal allowance.
   Most residents wouldn’t need to spend this much, so it will likely go towards your renovation costs.
4. Compensation for stamp duties and conveyancing fees.
   This, of course, depends on the cost of your new home and varies from home to home.
5. Up to $35,000 advance for renovation.
   After paying off what you owe on your SERS flat, owners may choose to use the rest of the compensation amount to help pay for your new home or ask for an advance of up to $35,000 to help with renovation costs.

SERS AMK Ang Mo Kio

The unassuming-looking blocks 562 to 565 at Ang Mo Kio Ave 3 hogged news headlines for weeks when their flats were chosen as the latest Selective En Bloc Redevelopment Scheme (SERS) site.

This is partly due to some residents raising a ruckus because they baulked at having to pay more than their expected compensation to buy a new flat of the same size. Many happily ignored the fact that they would get a brand new 99-year lease instead of their current, fast-ageing 57 years left on their lease.

The ‘protests’ even led to an unprecedented move. HDB is now offering a 50-year lease option for eligible residents aged 45 years and above. This will mean nearly all 540 eligible Ang Mo Kio residents will not have to top up any money to move into a similarly-sized replacement flat if they opt for the 50-year lease, announced National Development Minister Desmond Lee.

As soon as the furore about the Ang Mo Kio SERS project subsided, we immediately heard of a friend’s friend who snapped up a SERS unit at a premium, in order to have first dibs to move into the coveted new site at Ang Mo Kio.

This is not the first, nor the last, time that Singaporean property punters chase their SERS dream. With only 5 per cent of all HDB flats in Singapore identified as suitable for redevelopment under the SERS, it is no wonder there is much interest whenever a new “SERS lottery” is announced. If one is not lucky enough to live in a SERS-bound flat, then the only way is to offer top dollar to persuade a homeowner to give up their spot for you.

SERS Potential: Signs of Potential En Bloc

Of course, the cheaper way to score a SERS flat is to buy one before it gets selected. Some buyers shrewdly research speeches from the government and pore through URA’s plans before they zero in on a suitable area.

Spotting SERS from Government Speeches

One buyer called J told Stacked Homes that he remembered a speech that the late Minister Mentor Lee Kuan Yew gave about the challenges in rejuvenating older mature HDB estates and had mentioned Queenstown in passing.

SERS Potential: Old, Low-Rise

J thus took notes and bought his Tanglin Halt apartment. Many would have noted the same potential of the Tanglin Halt flats: old, low-rise, would cost too much to keep upgrading and would probably be better off torn down and rebuilt into taller flats, and so on. J, who said he already wanted a flat where he’d be comfortable living for decades, admitted that he liked its en bloc potential. Luckily for him, his bet paid dividends handsomely.

Quaint, older HDB estates

One of our friends, M, was in the same “heads I win, tails I win” situation. She liked the quiet and small neighbourhood of Ghim Moh (the old estate with the 40-something-year-old flats; not the spanking new Ghim Moh Link area).

“I bought my 3-room flat mainly because I wanted to downgrade and also, my daughters preferred that area instead of the East, where we previously lived, and was considered far away from most places. I also liked the less crowded small estate. Its SERS potential will be a bonus,” explained M, who purchased her unit a few years ago upon the advice of a friend who had successfully SERS-spotted his previous home.

SERS Potential: Stirling Road?

Jonathan Sung bought his 3-room flat at Stirling Road mainly because he spotted its SERS potential in 2016. The 646 sq ft flat built in 1970 is home to many seniors, in a central location within minutes’ walk to Ikea, Anchorpoint and Queensway Shopping Centre, surrounded by gentrified cafes and good hawker food.

Jonathan paid an affordable $305,000, partly attracted by the flat’s pleasant renovation. The previous owner even left behind his furniture, which were in good enough condition that Jonathan adopted everything. He only had to paint the flat, buy new mattresses and a few other simple things to spruce up his home before he moved in.

Read Also: Oldest HDB Blocks in Singapore - Stirling Road

Although there are no SERS announcements for the ageing Stirling Road flats to date, Jonathan is hopeful enough to hold onto his home even though he has met his Minimum Occupation Period (MOP) of five years and can cash in anytime. One reason why he is hesitant to do so is that he already missed out on a SERS opportunity.

SERS Potential: Boon Lay Drive

While house-hunting, he had his sights originally on the flats at Boon Lay Avenue. The thought of its SERS potential briefly crossed his mind, but he went on to purchase his Stirling Road flat. True enough, the blocks at Boon Lay that he was eyeing were eventually chosen for SERS.

Having missed that boat, it is no wonder that Jonathan is now more determined not to give up his current home’s SERS potential.

“I’m also very comfortable here, and it is so close to my workplace. I don’t think I can find another home that fits my needs, definitely not at the same price I pay for sure,” says Jonathan, referencing the current resale HDB flats’ crazy high prices. “I sell high. I’d have to buy high!”

Should I Buy A SERS Potential Old HDB Too?

It sounds tempting but do proceed with caution. Despite the crazy optimism of many SERS punters, the truth is the Singapore government has already said it will not be offering SERS to every HDB block in Singapore.

For now, the magic number is 5 per cent of all HDB blocks, of which most have already been identified. So, never shop for your home based on its future SERS potential because you will 95 per cent be bound to be disappointed.

Former Tanglin Halt resident Elaine Toh, who shared her SERS journey in our previous coverage on the topic, shared, “I know there were people who came looking to buy my neighbours’ flats for an attractive price as soon as the announcement happened.” However, if you are thinking of 'chope-ing' your SERS-potential flat, Elaine advises: “Buy what you’re comfortable with but definitely don’t try to buy an expensive old flat trying to score a SERS deal!”

After all, it is not what speculators say that counts, but what the government has planned that truly matters.