As Singapore prepares to roll out the Voluntary Early Redevelopment Scheme in the coming years, the debate around lease decay and the long-term value of flats under the Housing and Development Board is intensifying. Unlike the Selective En bloc Redevelopment Scheme (SERS), which applies only to selected precincts with high redevelopment potential, VERS is intended as a broader framework to address the reality that all ninety nine year leases will eventually run down to zero.

The End Of A Ninety Nine Year Lease

All flats are sold on ninety nine year leases. Once the lease expires, the flat and land revert to the state. This means that, unlike freehold property, public flats cannot retain value indefinitely.

Under VERS, precincts around seventy years old will be given the option to vote on whether they want the Government to acquire their flats for redevelopment before the lease ends. Compensation will be provided, but it will not match full market value as in SERS.

A Necessary Policy Shift

The Government has been transparent that VERS will be less generous than SERS. Terms are designed to balance fairness across generations. As explained by the National Development Minister, the intent is to manage expectations and emphasise that flats under the Housing and Development Board are primarily homes, not perpetual investment assets.

What It Means For Homeowners

• For ageing precincts: VERS provides a structured way to cash out earlier, with moderated compensation.
• For younger buyers: It reinforces that ownership is for housing security rather than perpetual wealth growth.
• For all owners: It highlights the importance of broader financial planning beyond housing, especially for retirement.

Looking Ahead

Singapore’s housing framework has always sought a balance between affordability and sustainability. With VERS, the Government is signalling a pragmatic approach: ensuring current flats remain liveable while paving the way for future redevelopment.

The discussion on lease decay is necessary. The introduction of VERS is a step towards clarity and fairness for all Singaporeans navigating the realities of leasehold housing.