For many Singapore homeowners, the clock isn’t just ticking on their mortgage — it’s ticking on their flat itself. Every HDB unit sits on a 99-year lease, and as those years run down, owners face what’s known as lease decay. This “lease countdown” has become one of the biggest concerns in the property market today, not only because it affects resale prices but also because it determines who can finance and even qualify to buy these ageing flats.
With the government phasing out the Selective En-bloc Redevelopment Scheme (SERS) and planning the Voluntary Early Redevelopment Scheme (VERS) for the 2030s, the landscape for older estates is shifting rapidly. In this article, we’ll break down what lease decay means, how it impacts your HDB flat’s value, and what recent policy changes could mean for both current owners and future buyers.
What is Lease Decay?
Lease decay refers to the gradual decline in a property’s value and marketability as its 99-year lease runs down. Unlike freehold homes, HDB flats are not owned indefinitely — once the lease expires, the unit reverts to the state, leaving the owner with no residual asset.
This matters because the shorter the lease, the harder it becomes to sell or finance the flat. Buyers know that the “lifespan” of the property is finite, and lenders treat it as a depreciating asset.
In Singapore, three milestones are particularly significant:
60 years left: Buyers and sellers begin to see noticeable drops in resale value.
40 years left: The marketability of the flat weakens sharply, as financing restrictions kick in.
30 years or fewer: CPF usage and bank loans are heavily curtailed, narrowing the buyer pool to mostly cash-rich purchasers.
In short, lease decay isn’t just about numbers on paper. It directly affects how much your flat is worth, how easily you can sell it, and whether potential buyers can secure financing at all.
How Lease Decay Affects HDB Flat Value
The impact of lease decay becomes most visible in resale prices. Data shows that HDB flats tend to hold their value reasonably well in the early decades, but prices start to slide once leases dip below 60 years, with sharper declines at the 35- and 30-year marks.
To put numbers to it: by the 50-year mark, an HDB flat may retain only about 75% of its peak value, and by the time just 25 years remain, that figure can drop to around 55%.
Financing restrictions amplify this effect. As the lease shortens, CPF usage is reduced and banks become more conservative, offering smaller loan amounts or refusing financing altogether. This effectively shrinks the buyer pool to cash-rich purchasers, further dampening demand and resale prices.
There are exceptions, of course. Flats in prime locations or with standout features — such as proximity to MRT stations, good schools, or panoramic views — may retain value slightly better. But even these cannot escape the fundamental economics of lease decay: every year that ticks away chips at both value and marketability.
The Removal of SERS (Selective En-Bloc Redevelopment Scheme)
For years, the Selective En-bloc Redevelopment Scheme (SERS) was viewed as a golden ticket for owners of ageing HDB flats. If chosen, the government would acquire the flat, compensate owners generously, and provide priority access to brand-new homes with a fresh 99-year lease — a windfall that often far exceeded what the resale market could offer.
But the reality was that SERS was never a widespread solution. Since its introduction in 1995, only about 5% of HDB flats have ever been selected, leaving the vast majority of homeowners outside the scheme.
In 2025, the government announced that SERS would be discontinued. With that, the “jackpot” expectation has effectively vanished. For most owners, lease decay will now play out naturally, without the safety net of compulsory redevelopment and compensation.
Introduction of VERS (Voluntary Early Redevelopment Scheme)
As SERS fades into history, the government has introduced the Voluntary Early Redevelopment Scheme (VERS) as a more inclusive, long-term alternative. Unlike SERS, which was compulsory and highly selective, VERS will be voluntary — requiring a majority vote from residents before redevelopment can proceed.
The scheme is designed to kick in when flats are about 70 years old, offering owners a structured exit before their leases run too short. However, because these flats will already be much older than those typically chosen under SERS, compensation is expected to be less generous.
The first pilots are planned for the early 2030s, with a broader rollout across Singapore by the late 2030s. Initial focus will be on ageing estates built in the 1970s and 1980s, such as Ang Mo Kio, Bedok, Tampines, and Yishun.
VERS represents a shift in approach — not a windfall, but a managed transition that gives communities more say in how their neighbourhoods evolve as leases run down.
Implications for HDB Owners and Buyers
For current owners, the key message is to plan ahead. With SERS no longer an option, it’s risky to assume a government “rescue” for ageing flats. Instead, homeowners should be realistic about their flat’s future value and consider how lease decay may affect long-term financial planning, retirement, or resale prospects.
For buyers, lease age must be a central consideration. A flat with fewer remaining years may look attractive due to a lower price tag, but financing restrictions and shrinking resale demand can erode that advantage over time. Understanding CPF limits, bank loan eligibility, and eventual marketability is essential before committing.
For the wider market, the new reality is one of gradual lease decay balanced by eventual VERS. The days of sudden windfalls through SERS are over; instead, ageing estates will move towards collective, community-driven redevelopment with more modest compensation. This means a more predictable — but less lucrative — trajectory for Singapore’s public housing landscape.
Lease decay is an inevitable part of HDB ownership, and it affects both the market value of your flat and the financing options available to buyers. Understanding how a shrinking lease impacts resale prices and loan eligibility is crucial for making smart property decisions.
With SERS phased out and VERS on the horizon, homeowners can no longer count on sudden windfalls. Both schemes provide some relief, but neither guarantees the high payouts that many once hoped for.
The takeaway is clear: whether you’re buying or selling, making informed, long-term decisions is essential. Awareness of lease age, policy changes, and financing implications will help you navigate the evolving landscape of Singapore’s HDB market with confidence.
References / Further Reading
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ERA Singapore – Insights on SERS removal and VERS mechanics. Link
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Stacked Homes – Detailed comparison of SERS vs. VERS and their implications. Link
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Property Review SG – Lease decay explained with resale trends and market impact. Link
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EdgeProp – Analysis and charts showing value depreciation for ageing HDB flats. Link
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PropNex – Practical advice on selling and financing older HDB flats. Link
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Letstalkproperty.sg – Overview of CPF usage and bank loan restrictions for flats with short leases. Link
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