The Ang Mo Kio SERS Alarm Bell

Mr Speaker Sir, the Selective En bloc Redevelopment Scheme at Ang Mo Kio Avenue 3 which I shall call Ang Mo Kio SERS, is an epochal event in the history of our public housing. This event has important implications for all Singaporeans beyond the residents that are affected, but the media and Government have downplayed these implications. Therefore, I will be using my Adjournment Motion speech today to explain to Singaporeans why they should be concerned about Ang Mo Kio SERS and how it will affect the future of their aging HDB flats.


Some Singaporeans may not fully understand how and why Ang Mo Kio SERS is different from other SERS exercises in the past. I will first explain briefly how Ang Mo Kio SERS is different from the past SERS.

The key difference is, this is the first time that residents selected for SERS must top-up cash to get an equivalent replacement flat with a new 99-year lease. An equivalent flat is defined as one that is the same flat-type, same size and located at a designated site near the current site.

I confirmed this during the deliberations of the Public Petitions Committee, where I persistently asked the Ministry for National Development (MND) for past examples of SERS where the residents had needed to top-up cash for an equivalent flat with a new 99-year lease. The MND finally provided a memo to the Public Petitions Committee on November 14 stating that in a previous SERS at West Coast Road, residents who bought equivalent flats at the “designated” West Coast Crescent site, near their existing flats, had received cash payment from the Government of $51,000 for a 3-room flat and $61,000 for a 4-room flat respectively. Only residents who opted for “a more centrally located replacement site” at Clementi Avenue 1 were required to top-up cash. Thus, the Government’s example of West Coast Road SERS cannot be taken as an example of past SERS residents having to top-up cash for an equivalent flat.

This confirms that the Ang Mo Kio residents are the unlucky first SERS residents to be financially burdened. For the first time, residents of a SERS must fork out cash for an equivalent flat with a new 99-year lease. 

The Government has repeatedly stated it has used the same model and approach as other SERS to compute the compensation for the Ang Mo Kio SERS but has not admitted that the outcome of the Ang Mo Kio SERS is different from other SERS.  It is disingenuous of the Government to have not admitted to the different outcome up till today, even though the outcome is undeniably different. If the outcome was not different, there would have been no need for the Government to introduce the 50-year lease and Lease Buyback Scheme as a new option for the Ang Mo Kio residents. 

Short of admitting the different outcome, Minister Desmond Lee had tried to give the reason for the different outcome in his response to Ang Mo Kio Member Ms Nadia Samdin’s Adjournment Motion speech in July 2022.  The reason given is the lease decay. The Minister explained that in past SERS, the flats were generally younger at the point of the SERS announcement, with around 70 years of lease remaining. However, the flats affected by Ang Mo Kio SERS are older, with a lease balance of about 57 years.

But the Minister’s explanation does not fully explain why the compensation given to Ang Mo Kio residents is insufficient for them to buy an equivalent flat with a new 99-year lease like in other SERS. He also did not explain why the residents affected by Marsiling SERS which was announced slightly later than the Ang Mo Kio SERS, did not need to top-up cash although the Marsiling flats have a lease balance of only 58 to 59 years which is not much longer than the 57 years remaining for the Ang Mo Kio flats.

In my opinion, the full explanation is that lease decay has affected prices of old HDB flats in mature estates more than the ones in non-mature estates.  At the same time, the prices of new flats in mature estates have risen much faster because they enjoy the benefits of good amenities and location. Therefore, there is a larger price difference between the existing old flats and the new replacement flats in Ang Mo Kio than in Marsiling.  This is the key reason why the Ang Mo Kio residents have suffered a worse outcome than that of the residents of the Marsiling SERS and previous SERS when the effect of lease decay had not set in.

The Government should have admitted to the different outcome and offered this full explanation to the Ang Mo Kio residents upfront but that is not to be.


So what is the reason for the Government to avoid admitting the different outcome and as a result of that unable to provide a full explanation to the Ang Mo Kio residents and Singaporeans? 

I think the reason is, by admitting to the different outcome of the Ang Mo Kio SERS, it means the Voluntary Early Redevelopment Scheme or VERS is not a viable solution to the lease decay problem. Since 2018, the Government has touted VERS as a solution to the lease decay problem.

Singaporeans are expecting VERS to be like “SERS for all” but it is a different story if VERS is actually “Ang Mo Kio SERS for all”. The original SERS means residents get paid, Ang Mo Kio SERS means residents must pay. 

Since the market-based compensation formula that the Government had used for SERS all this while has failed to enable Ang Mo Kio residents to exchange their 42-year-old flats for new ones without having to top-up cash, VERS cannot be a solution to the lease decay problem, as the flats under VERS will be even older at more than 70 years old. This will be especially true if the price disparity between new and older flats in mature estates which we see today continues to persist.

If the Government uses the same formula as SERS to compensate VERS residents, it is certain that the VERS residents will have to pay a lot more cash or move to a cheaper area with the proceeds from VERS. The likelihood of any VERS proposal being approved will also be nil because Singaporeans have come to associate “en bloc” with windfalls and new homes, and the redevelopment of mature estates envisioned by VERS will not materialise. VERS will be doomed if the Government uses the same compensation formula as SERS.

By not admitting to the different outcome of the Ang Mo Kio SERS and the financial plight of the Ang Mo Kio residents, the Government continues to keep silent on the non-viability of VERS.

The right thing to do is to clarify to Singaporeans whether it would be devising a new compensation formula for VERS or proposing some other solutions for the lease decay problem which has serious implications on the financial well-being and retirement plans of Singaporeans, especially those who bought older flats in mature estates before the lease decay issue was thrown into the spotlight.


Mr Speaker, the Government has shown a lack of transparency and compassion by offering a compensation package that requires top-up to the Ang Mo Kio residents in April 2022 without explaining the reasons for it.

Even though the Government has followed the same model and approach, as a government responsible to the people, it should have thought through the implications of the different compensation and come out with more palatable solutions.

The Government has failed to appreciate how stressful and unfair it is to the Ang Mo Kio residents for them to fork out tens of thousands of dollars to move to a new location forced upon them by national development.  I urge the Government to further improve the compensation package for the Ang Mo Kio residents although a final compensation has been announced on November 7 last year.

Fifty years after the introduction of the Land Acquisition Act, it is time for us to reassess the Act with regards to its power to displace Singaporeans from their homes without adequate compensation for them to afford an equivalent replacement home in the same area.

Had the Ang Mo Kio SERS residents not protested, this issue would not have been drawn into the national spotlight and we would not be able to assess its implications for VERS in future.

Singaporeans, especially those who live in older flats with decaying leases, should be aware that Ang Mo Kio SERS possibly foreshadows what could happen to them in future if the Government uses the compensation formula applied to Ang Mo Kio SERS for VERS.

We urge the Government to clarify how it intends to compensate residents of VERS in future because Singaporeans need certainty on the lease decay issue as soon as possible.

Singaporeans deserve better.  

For Country For People.

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