SERS: What is it, where has it happened, and what are your odds?

The Selective En-Bloc Redevelopment Scheme (SERS) is often considered the next big “HDB lottery winner”, next to a central region BTO flat.

In fact, one of the reasons many Singaporeans want a central region flat is because they believe there’s a higher chance of SERS. But coming back to reality, it’s only a handful of Singaporeans who will ever get so lucky – here’s what you need to know about it:

What is SERS?

SERS is a way for HDB to rejuvenate ageing housing estates. The first SERS exercises took place on 22nd August 1995, in Tiong Bahru.

At the time, it was erroneously believed that SERS was the government solution to expiring HDB leases. The property market largely believed that SERS, or a SERS equivalent, would kick in for every HDB estate, long before the 99-year lease could expire. It’s worth noting, however, that the government never made such claims.

This was partly because the pace of SERS in the early years was much faster. Between 1995 to 2000, for example, there had been roughly 40 SERS sites; almost eight per year.

But between 2000 to 2010, the pace began to slow significantly, and we saw only 33 SERS exercises. Between 2010 to the present, we saw only seven SERS events, with the last one being at Circuit Road (Geylang) in May 2018.

Today, it’s been made clear that SERS is not the government solution to 99-year leases. Only four per cent of HDB flats have been marked out for SERS, since it began in 1995.

What happens during SERS?

1. Once your block has been targeted for SERS, you’ll be notified by HDB. Shortly after, HDB will arrange an exhibition, where you can also ask your questions.

2. A private company will conduct a valuation of your flat, and let you know the market value.

3. You’ll attend a Collector’s Inquiry at HDB Hub in Toa Payoh. HDB will do a survey on your preferences for your replacement home, and help with the financial planning process.

4. You’ll then be informed on your financial compensation, which is usually close to market value. It’s up to you to decide your next move, based on this amount.

5. HDB will then consult you on rehousing options. One of these is the Joint Selection Scheme (JSS), which allows multiple households to select their new address on the same day; the idea being that you can move with friends and neighbours. It’s not mandatory, however.

You can either select a replacement flat from select sites (with a fresh 99-year lease of course), or get your own housing elsewhere. HDB officers will walk you through the options and requirements.

6. Key collection (if you’re getting a new flat) and moving out are the final step. You’ll usually have about four months to renovate and move into your new flat after key collection.

Where has SERS happened?

You can see the full table of SERS sites here. This is a quick summary of which HDB towns have seen the most SERS exercises:

What is the likelihood of SERS in any given neighbourhood?

There is no given formula for how SERS is decided. No one knows for sure which neighbourhoods or blocks will see SERS; not even based on age.

For example, Marine Parade has flats that are pushing 40 years of age, but has never seen a SERS site. On the other hand, Woodlands is one of the younger neighbourhoods with lots of room to build – but it has already seen one SERS site.

This isn’t to say age totally doesn’t matter; simply that there isn’t any fixed age at which HDB will decide to implement SERS.

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That said, there are three general theories that make a fair amount of sense:

First, the HDB estate in question should not have been recently upgraded. If the government has spent millions of dollars on the Home Improvement Programme (HIP) in the area, or on assisted living facilities or childcare centres at the block, then it’s a waste to tear it down soon after.

As such, it tends to be the sleepiest, most visibly dated areas that are more likely to become the target of SERS.

Second, flats are generally torn down to build more housing, not less or the same amount. This means an area or its surroundings should be zoned for high population density to justify SERS.  A Gross Plot Ratio (GPR) of 3.0 or higher might offer sufficient potential. This can be checked on the URA Master Plan (check out our previous article on how to interpret it).

On a related aside, inefficient use of land space is also a good indicator. For example, if your HDB estate has huge plots of empty land surrounding an MRT station, or spread throughout (good spaces between blocks), that might invite SERS.

Third, it’s often the most high-profile or visible HDB blocks that invite SERS (think Rochor Centre). For example, if the blocks are facing a main road and millions of people look at them every day, then the government can’t really let the area go to seed; that would turn our residential landscape into an eyesore.

The same would apply to famous or historic areas. Again, there’s no guarantee – but it’s a good bet that an ageing block in historic Chinatown would have better odds than, say, an obscure block tucked away in an unseen corner of Sembawang.

While SERS is a lottery-win, VERS is the reality that most Singaporeans will face

The Voluntary Early Redevelopment Scheme (VERS) will be the default for most housing estates. VERS will only be applied to flats that are at least 70 years old, and we haven’t seen an actual example yet.

However, VERS requires the majority’s consensus (much like a private en-bloc), and isn’t likely to be a windfall. Even if pegged to market value, a flat with 30-years on the lease won’t be worth too much.

As such, it’s best to assume SERS won’t happen, and be cautious about buying very old flats; even if they’re bigger, or the location is more mature.

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This article was first published in Stackedhomes.