Could HDB offer to buy old flats that do not undergo Vers?

Vendors facing genuine difficulties selling old flats may need help

Leslie Yee
The Business Times

Sep 29, 2025

https://www.businesstimes.com.sg/opi...t-undergo-vers

An estimated nearly 300 blocks of Housing & Development Board (HDB) flats, which were built in the 1960s, will soon enter the final 30-year stretch of their 99-year leases.

These flats can be found in areas such as Bukit Merah, Geylang, Queenstown and Toa Payoh.

Should an owner worry over the potential difficulty of selling his HDB flat when the remaining land lease dips below 30 years?

Certainly, help is on the way for owners of old HDB homes. Minister for National Development Chee Hong Tat has already said that the government is working out details of the Voluntary Early Redevelopment Scheme (Vers) in this current term of government.

Under Vers, owners of HDB flats aged around 70 years and older in selected precincts will vote on the government’s offer to buy back their homes before their leases run out. Compensation terms for Vers will be less generous than that of the Selective En bloc Redevelopment Scheme, given the flats’ older age.

Perhaps, Vers, which may not be laden with goodies, will be coolly received by homeowners. For one thing, elderly owners of ageing HDB flats might not support Vers as they prefer to age in place.

In short, owners of old blocks of HDB flats may give the thumbs down when offered Vers. Thus, a flat owner seeking an exit may have to rely on finding a buyer in the resale market.

Of course, a property with a relatively short remaining land lease can still hold value. In such cases, a property’s value could be tied mainly to estimated rental income over the remaining years, discounted to present value.

Investors in real estate investment trusts (Reits) appear fine with trusts owning industrial properties and warehouses that have under 30 years of outstanding land lease. The portfolio of the newly listed Centurion Accommodation Reit, which made a strong trading debut on Sep 25, includes worker dormitories here with fewer than 30 years of remaining land lease.

Resale market challenges

Nonetheless, it may be hard finding a buyer for an old HDB flat who is drawn to the chance to earn rental income from the remaining years of the land lease.

Strict restrictions govern who can buy HDB resale homes. And the expectation is that resale flats are bought for owner occupation.

While a vibrant HDB resale flat market exists, demand for flats with under 30 years of remaining land lease may be elusive.

Many younger buyers might choose newer HDB resale flats because of the more modern design of such homes and the likelihood that such flats can be resold fairly easily subsequently.

People in their 50s and 60s who are looking to rightsize their homes for their retirement years may prefer flats with, say, around 40 years or more of remaining land lease to hedge against longevity risk.

Moreover, eligible older homebuyers have various affordable HDB options. Those aged 55 years and older can buy two-room flexi flats with leases from 15 to 45 years, while those aged at least 65 years can purchase community care apartments (CCAs) with leases from 15 to 35 years. The chosen leases must be able to last all buyers and their spouses until at least age 95.

Add to all the above, potential buyers could struggle to secure debt financing to purchase old HDB flats.

HDB as resale flat buyer

Will HDB step forward as a buyer of last resort for flats with remaining land leases below 30 years old that do not undergo Vers?

Sound reasons may drive vendors to sell old HDB homes. For example, family members who inherited an old flat might want to sell it to split the proceeds among themselves.

Think, too, of an elderly widow or widower who, upon a spouse’s demise, wishes to sell a family home of many years because she or he intends to live with another family member. Or perhaps an elderly person is divesting an old HDB flat to move to a CCA or a nursing home due to ill health.

As it stands, owners facing genuine difficulties selling their flats at a reasonable price when the Ethnic Integration Policy (EIP) quotas have been reached can reach out to HDB for help. In such circumstances, HDB will offer to buy back flats from eligible EIP-constrained flat owners.

Once an owner is assessed to be eligible for buyback assistance, HDB will appoint a professional licensed valuer to value the subject flat. In turn, HDB will then determine the buyback price and make an offer for the flat at a fair price.

Under the EIP, quotas apply at the point of flat purchase, as well as at subsequent resale to help maintain a diverse ethnic mix across HDB blocks and neighbourhoods.

Indeed, should HDB purchase its old flats which do not undergo Vers at reasonable terms, an opportunity may arise to bundle the repurchased flats into a securitised instrument for sale to local retail investors.

After all, an old HDB flat can be spruced up and then leased out to meet rental housing needs, as well as generate rental income. Possibly, a well spruced-up old flat in a convenient location will draw robust rental demand.

In the second quarter, the median monthly rental of HDB four-room flats in Bukit Merah, Geylang, Queenstown and Toa Payoh were S$3,900, S$3,600, S$4,000 and S$3,600, respectively.

While numerous technical issues need resolving to birth a securitised instrument backed by the income stream of old HDB flats, creating such an instrument can help free up funds that are used to buy back old flats. Importantly, the said investment instrument may appeal to an ageing population here which is seeking safe and stable recurrent income.



Rolling out Vers – details of which will be eagerly anticipated and scrutinised by owners of ageing HDB flats – will provide owners with a useful exit route.

Still, some owners supportive of Vers may see their wishes to take up the scheme thwarted by others. HDB could consider stepping in to buy flats with short remaining land leases that do not undergo Vers on a case-by-case basis.