Hitting the SERS jackpot: How this Singaporean timed his HDB flat purchase just right

To many Singaporeans, the Selective En-bloc Redevelopment Scheme (SERS) is one of the best possible outcomes for their HDB flat. The compensation is generous, your lease is topped up to 99-years again, and you have a whole list of replacement units to choose from.

But only a tiny minority of HDB estates are likely to see a SERS exercise, and the odds aren’t high. This week, we talked to J, a Singaporean who timed his HDB purchase just right and reaped the best benefits of SERS.

The Tanglin Halt SERS, and its early signs

J is a longtime Queenstown resident, who – as we write this – is soon to move to his replacement flat in Dawson. His previous home was in Tanglin Halt, the site of Singapore’s 79th SERS exercise (some of you may remember these flats, as the same ones that used to appear on our $1 bills).

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In 2014, residents of the Tanglin Halt flats – of which there were only 31 blocks – were given a valuation, and informed of the upcoming en-bloc. Even before then though, J was quick to identify the potential for SERS; and he had no qualms about buying a flat there despite its age.

“I’ve been staying in Queenstown all my life, so I know the place growing up. It’s like having home or backyard advantage,” J says. He had kept up to date with developments in this HDB town, ever since he started thinking of buying a resale flat.

Even in his mid-20’s, J was already looking to purchase a resale flat, under the Single Singapore Citizen Scheme (although he was ultimately 35 when he bought his flat in Tanglin Halt).

Despite the age of the neighbourhood, J knew it had strong prospects for redevelopment.

“I remember a year – I can’t remember when – where late Minister Mentor Lee Kuan Yew was speaking in parliament. He talked about the challenges in rejuvenating older mature HDB estates. Queenstown was mentioned in passing and I took note.”

(We think J may be referring to a speech on 19th March 2011, at the opening of ABC Waters at Alexandra Canal, when Queenstown was also mentioned).

“Also. It was no secret there had been redevelopment intentions for Queenstown.

The four-storey SIT walkup flats in Queens Crescent (a name no longer in existence) was demolished and left vacant till today.

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The iconic 14-storey Forfar House was gone.

Most of the “landed” HDB terrace flats along Stirling Road and Margaret Drive were making way for newer generations of towering HDB flats.

Those dark and dingy rental HDB flats around Mei Ling Street, were being redeveloped into the HDB estate that gave rise to the first million-dollar flats.”

J also took a cue from nearby schools. He noticed that Mei Chin Primary and Secondary schools were closed down and merged with others; and this left a huge plot of land available for future use. As such, he feels the coming redevelopment wasn’t a secret per se; but it was something that would have been obvious, to those who were actively looking.

While buying on the hopes of SERS is often risky, Tanglin Halt was a win-win proposition for J

“It was a case of heads I win, tails I win. Although I was deliberately looking for older, mature HDB estates with en bloc potential, I was first and foremost looking for a flat where I’m comfortable, which I am happy living in for decades.

How to say no to Queenstown’s ‘good, better, best location’? Unlike newer HDB estates, all the infrastructure is already in place. Plus, the area has hawkers and shopkeepers with 20 to 30 years of craftsmanship and skills. Now that’s hard to beat!”

J was already certain, when he got the Tanglin Halt flat, that redevelopment would happen “once we take back the land along the old Malaysian railway track”. However, he was under the impression that this might happen in his sixties or later; and he wasn’t in a rush.

“It was a pleasant surprise,” he says “When SERS happened 10 years ahead of schedule.” J hadn’t made a short-term bet on SERS happening, but it happened anyway.

The financial compensation for SERS

J says he’s happy with the compensation coming from SERS:

“Once I got my keys to my new replacement last December, HDB took my SERS compensation to repay my outstanding bank loan, and returned to CPF the amount I’ve withdrawn from CPF plus accrued interest.

Just like that, I’ve become debt free! I’ve repaid my bank loan 12 years early too. Not bad, it’s a case of exchanging an old lamp for new lamp. Plus my HDB lease resets back to 99 years. Quick! Somebody pinch me!”

J also won’t have to use any cash from his own pockets, to buy his replacement home:

“The compensation for my three-room flat is enough for me to buy the most expensive, top floor replacement flat, also a three-room. I don’t have to cough out any extra cash.”

 

He could also have opted for a replacement unit of lower value than his old Tanglin Halt flat, if he wanted a cash surplus.

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J noted that lower floor flats could be priced as much as $100,000 lower than top floor units; so anyone willing to move from a high floor unit such as his, to a lower floor unit, could pocket the significant difference as compensation:

“Those who chose replacement flats at lower floors will get a SERS ‘windfall’, as these flats are priced lower than our SERS compensation.”

There’s also the option of moving somewhere with properties cheaper than Queenstown:

“Some neighbours have decided to turn down the replacement BTO flats in Queenstown,” J says, “They decided to move to more outlying HDB estates like Choa Chu Kang. They probably prefer more cash in their pockets to fund their retirement.”

Picking a replacement home

J had no issues with the replacement sites, as all five of them were in Queenstown. He was already intimately familiar with each of them (although he wouldn’t have been as happy had they been located elsewhere, which is sometimes the case with other SERS exercises).

He explains how he narrowed his choice down to Dawson:

“Four sites consisted of HDB premium flats; one had plain vanilla HDB flats. I decided to choose the HDB premium flats, so one site down; four to go.

Next, two of the most ‘popular’ sites consist of one with eight HDB blocks, while the other has six HDB blocks. I don’t like crowds. So these two were out, with two more to go.

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The smallest site had just one HDB block, but I didn’t like it as it’s located next to a crossroads and traffic junction. Fengshui or no fengshui, living next to the main road is not my cup of tea.

So we are left with what I’ve chosen: Dawson with its three HDB blocks. It’s near enough to the main facilities like supermarkets and MRT stations, but far away enough to be quiet.”

So far, the upcoming move has been going smoothly. J says that:

“I must compliment HDB and the building contractor at my replacement Dawson site. There’s a building centre at the site to handle any defect rectifications, once we have collected our keys; and they’re very efficient and helpful.

They have already replaced my three kitchen wall tiles that have hairline cracks. No questions asked. And they fixed my main door’s alignment when I found the door’s opening and closing a bit tight.”

Witnessing the last days of Tanglin Halt

“I’ve not moved into my new Dawson flat yet, should be moving soon in a month or two,” J says.

“The neighbours that don’t want the SERS replacement flats in Queenstown have already moved one or two years ago, to their new flats in Choa Chu Kang and elsewhere. These flats have a white notice on their doors indicating they have been returned to HDB.

As for businesses such as shopkeepers, clinics, and hawker stalls, I think about 30 per cent have already moved out. Taking over are the opportunistic home renovation firms, springing up everywhere.

Residents should all move out by end of this year; but businesses and hawkers have another two years to go.”

Tanglin Halt still has the old ‘70s vibe. That’s why I would be okay to stay here, even if there were no SERS. What I miss is not unique to me. I think Singaporeans that grew up in the ‘70s have the same nostalgic feeling, whenever we lose another old school provision shop, bakery, or hairdresser.”

Trying to pick up on SERS prospects? J has some advice:

J says the trick is to “know your facts and odds”. Only roughly four per cent of HDB flats have been selected for SERS since the scheme first began. He also warns that it’s not a get-rich-quick scheme.

“In July 2015, I got the announcement that my flat was selected for SERS. In December 2020 I collected my keys. That’s five and a half years to see the windfall. And don’t forget I bought my Tanglin Halt flat in 2003; so that’s an additional 12 years of waiting.”

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J says it’s better if, first and foremost, you buy what you like. Then even if SERS never strikes in your lifetime, you’ll still be happy; SERS will be a cherry on top if you get lucky.

As for checking out SERS prospects, he says:

“For your readers who don’t have the patience to spend years walking around their estates to spot patterns, I can suggest two  websites that may prove useful: Urban Redevelopment Authority (URA) Master Plan , and Remaking Our Heartland ”.

Special thanks to J for taking the time to recount his SERS story to us. For more daily musings, and interesting stories please visit his blog at Singapore Man of Leisure!

This article was first published in Stackedhomes.