Mr Leong also pointed out that in the Marsiling SERS exercise, which was announced slightly later than the Ang Mo Kio SERS, residents did not need to top-up cash although the flats in the two estates were about the same age.
“In my opinion, the full explanation is that lease decay has affected prices of old HDB flats in mature estates more than the ones in non-mature estates,” he said.
“At the same time, the prices of new flats in mature estates have risen much faster because they enjoy the benefits of good amenities and location. Therefore, there is a larger price difference between the existing old flats and the new replacement flats in Ang Mo Kio than in Marsiling.”
VERS “NOT VIABLE”, SAYS LEONG
Extrapolating from this, Mr Leong said that VERS is “not a viable solution to the lease decay problem”.
VERS is a voluntary scheme to be offered to selected precincts when the flats there are 70 years or older. It was announced by Prime Minister Lee Hsien Loong in his 2018 National Day Rally but few details of the scheme have been made known.
However, Mr Lee has said that the terms will be less generous than that of SERS.
Mr Leong said: “Singaporeans are expecting VERS to be like ‘SERS for all’ but it is a different story if VERS is actually ‘Ang Mo Kio SERS for all’.
“The original SERS means residents get paid, Ang Mo Kio SERS means residents must pay.”
Mr Leong said that the likelihood of any VERS proposal being approved will “also be nil” because Singaporeans have come to associate “en bloc” with windfalls and new homes, so VERS will be “doomed if the Government uses the same compensation formula as Ang Mo Kio SERS”.
He adds that because of this, the redevelopment of mature estates “will not materialise”.
“Singaporeans, especially those who live in older flats with decaying leases, should be aware that Ang Mo Kio SERS possibly foreshadows what could happen to them in future if the Government uses the compensation formula applied to Ang Mo Kio SERS for VERS,” he said.
Ms Sim said both SERS and VERS are “not meant to extend a diminishing lease for free to 99 years”. She added: “The details of VERS have yet to be announced, but the Government has already made clear that the terms for VERS will not be as generous as for SERS and that there are no replacement flats.”
She then said of the NCMP: “if you examine what Mr Leong has been doing, I think he has been reshaping people’s expectations of the scheme, and I cannot help but wonder why he is doing so. Be that as it may, it doesn’t seem very inconsistent with what Mr Leong has been doing.”
Mr Leong disagreed with this characterisation and insisted that he is not shaping expectations of society on these schemes.
“The Government has given the expectation first of all, that HDB flat is an appreciating asset and now there’s lease decay … okay, the Government has suggested VERS – so the Government has shaped the expectation,” he argued.
Ms Sim replied: “I believe that the information that we have been putting out is transparent and we also have been consistent in doing so.
“With regard to diminishing leases, again, the Government has also been upfront in letting residents know about this, in being clear to home owners … I think what Mr Leong is trying to do here is something that is increasingly evident to everyone.”
Discussion about this post