I think its not accurate what you say about all HDB flats getting SERS. Within the HDB tenancy agreement that it signs with the flat dweller, there is a mechanism for the HDB to take back your flat by dissolving the 99 lease. They have triggered this many times before in the past for older estates like Queenstown. Those flat dwellers also signed a 99 years lease, and well, they are not there anymore. Their blocks have been torn down and new higher density blocks have been put up in their place. These people did not get any monetary gains from SERS at all when they were kicked out, in fact SERS was not even in existence at that time. SERS was a program that was proof of concept and that concept is not working out for the HDB. Instead, these people were relocated to newer estates and compensated with a new flat at below what HDB was charging other people. The downside is that they have to top up their mortgage amount and buy it at the discounted price and start all over again with a mortgage, but they get a new 99 year lease in exchange and more amenities in the new estate then was in Queenstown. So, you did not hear too many complains, not that Shit Times would have reported them anyway.
The PAP will use the above described method to move people out when they need too, and not pay them any SERS money, while at the same time, holding them to a new mortgage and 99 year lease. In theory, a HDB flat will never drop below around $200,000. The reason is a combination of opportunity cost and rental income. Lets say you have only 10 years left on a 99 year HDB lease. Many people will argue that it will be worth close to zero due to the short lease period, But they will be wrong. HDB leases have always been about opportunity costs. You give up your money to buy a flat now and forego investment gains you could have received for this, in exchange for rental stability. So, even with 10 years left on the lease (120 months), you could live in it and not pay $1500 a month in rent to a landlord or conversely, move in with a relative and rent it out for $1500 a month and receive this stream as income for the remaining 10 years. This is worth more then the $50K, or $100k you mentioned. Its calculated at $180K. It could be $200K value with compounding, and this number is I believe a hard floor for HDB flats valuation with 10 years or more left on their lease life.
Now the important thing that no one talks about is that this whole exercise might be moot anyway. The reason is that the flats will not last 99 years. The HDB never had the intention to honour the 99 years lease because these flats will be structurally unsafe way before that. Cheap labour + cheap materials + cheap construction does not equal a 99 year life span for these flats. If the HDB does not already have one, (I would suggest they do one right away), they should have a data base of every single block and the remaining economic and structural left in them. At some point, the older flats will cost more and more in maintenance, and then it will be unsafe for occupation. The HDB will have a plan to replace them as these issues start to crop up. Hence, people will be moved out of their flats into newer ones when it has been identified that their block is not going to hold up much longer. So, when Lawrence Wong says the govt will take back the flats when the lease ends at 99 years is actually not telling the truth. No flats will last that long.
P.S. nice chatting with you again.
