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Some Ang Mo Kio HDB flat owners whose homes fall under the Selective En bloc Redevelopment Scheme (SERS) project are facing a dilemma: They are reluctant to put up their flat for sale on the resale market and they do not want to take up the offer of buying the replacement flat either.

A total of 606 flats located in blocks 562 to 565 Ang Mo Kio Avenue 3 are affected, and owners have been invited to purchase new flats at Ang Mo Kio Drive -- which are due to be completed in the third quarter of 2027 -- at subsidised prices.

Out-of-pocket expenses required for replacement flats

CNA spoke to two groups of home owners who are facing this conundrum.

One couple, Teo Boon Jia and Lim Hoi Sim, worry about how they will be able to afford the extra costs involved.

Lim said, "We can't have a one-for-one exchange, which makes it tough for us. My husband is old so how can he still be working after five years? How would we pay for the house?"

According to a financial guide that the couple received, the estimated total compensation for their four-room flat is S$450,000.

A replacement four-room flat is estimated to cost S$564,766 after factoring in the estimated purchase price, cost of optional component scheme, along with stamp and conveyancing fees.

Teo mused:

"It's okay if we manage to sell our flat (on the resale market) for a higher price (because) I can still buy another house to live in. If I sell it at too low a price, I won't be able to afford a similar four-room flat. I'm stuck between a rock and a hard place (as) I can't afford HDB's replacement flat either. I don't know what to do."

Another homeowner's daughter, identified only by her surname Tee, said the family met with a property agent, who told them that her father does not have "enough in his retirement account, so after returning this (flat) to the government, he might have to top up about S$70,000 (or so)."

Experts weigh in

Lee Sze Teck, who is a senior director of research at Huttons Asia told CNA that residents in the affected blocks could possibly be retired and would therefore find it difficult to qualify for a loan.

This could be a reason why they would prefer an exchange where they will not need to borrow additional funds or dig into their savings.

Property agent Jay Tan pointed out that homeowners would have to downsize to a smaller flat in order to "not carry any debt".

CNA reported that HDB will share the exact compensation offers in the fourth quarter.

Homeowners who are affected by the SERS project have other options if they do not wish to take up the replacement flat or put their current flat up for sale: applying for a Build-To-Order (BTO) flat elsewhere, or take part in a Sale of Balance Flats (SBF) exercise.

They will be given a priority under both exercises.

Top screenshot via CNA.