Photo of Lawrence Wong from Parliament

Parliament wasted a good half an hour in its session on Tuesday (Sep 11) with Minister of National Development Lawrence Wong admitting that he knows nothing about the Voluntary Early Redevelopment Scheme (VERS) that Lee Hsien Loong came out with at his National Day speech.

The millionaire minister answered none of the questions fielded on VERS, saying he does not know which precinct would be selected, how much VERS would compensate or when will the details be worked out. Stating that he needed more time, the PAP Minister reiterated that government will buy the HDB lease at a cheap rate and not pay market rate seen under the en bloc scheme SERS:

“The authorities need more time to work out the details, including the extent of coverage of Vers and how compensation will be computed. In particular, we will ensure that we implement Vers in a fiscally sustainable way, so that it does not become a burden for the next generation. More flats would be eligible for Vers, as compared to the Selective En bloc Redevelopment Scheme (Sers), which is limited to precincts where there is high development value to be unlocked. Sers applies to about 5 per cent of HDB flats. However, the compensation terms for Vers would be less generous because we will be redeveloping land that is more built up.”

Minister Lawrence also added that private developers will also get to participate in VERS program, letting them buy up HDB lease at a cheap prices below market rate. Previously, private developers must pay HDB lease owners the market rate under the SERS program if they wish to redevelop a government housing HDB flat.

The move however comes not a surprise as the government will be heavily stretched on resources when it start confiscating HDB apartments. The first batch of HDB units, estimated at 147,000, were mass-produced in the 1960s, and redevelopment work would at one go would be straining on resources.

Earlier on Monday (Sep 10), Minister Lawrence Wong also posted on his blog saying that he will be bending mortgage loan regulations to shore up the value of HDB lease with less than 30 years left. Under the existing bank regulation, Singaporeans are not allowed to borrow from their CPF to purchase a property lease with less than 30 years – which drastically diminished the pool of eligible buyers.