SINGAPORE – En bloc fever is raging in Singapore, nudging the private residential market upwards the past few quarters.

At the other end of the spectrum, National Development Minister Lawrence Wong cautioned HDB buyers that not all HDB flats are eligible for Selective En bloc Redevelopment Scheme (SERS) last year. Following which, among other factors, HDB prices have softened.

Apart from the fact that private residential developments are more likely to undergo en bloc, compared to HDB flats undergoing SERS, both processes can be very different.

What are the ways in which a private en bloc is different from SERS? We look at some of them here.

1. You Get to Decide

In a private collective sale, home owners get to decide in a vote. The en bloc can only go ahead if at least 80 per cent of the owners agree (or 90 per cent for properties less than 10 years old).

However, in the case of SERS, the government is the one that decides on whether HDB flat is eligible – you don’t get a say in this decision.

2. You Get a Much Bigger Windfall

In a private en bloc, residents get to negotiate with the buyer on the compensation, which can amount to as much as twice the prevailing market value of their homes. For instance, $2 million home could be sold for  $4 million in the en bloc market – turning many home owners into instant millionaires.

For SERS, the payout is far more muted. According to HDB, SERS compensation is “based on the market value of your flat as at the time of SERS announcement, and some reasonable expenses to help you move”. However, affected residents do get additional benefits which may include a SERS grant, concessions on resale levy and/or a replacement flat at a subsidised rate.

3. You Have to Find a New Home Yourself

Owners who live in the private condo undergoing en bloc will probably have to look for alternative housing. Oftentimes, they need to downsize as the newer developments typically are not as big in floor size, or they are being “squeezed” by sellers who know they are cash rich.

Under SERS, home owners are usually given the choice to move into a replacement flat.

4. You Have to Vacate Much Sooner

Once the en bloc is confirmed, owners are typically given a few months to vacate the property. The developer who buys the land would want to quickly redevelop it as soon as possible.

For SERS, after the announcement is made, a process which takes as long as 4 years awaits the flat owners – this includes selection of the new flat, waiting for the new flat to be built and finally being given notice to move out.

5. You Say Goodbye to Your Neighbors

In a private en bloc, all the neighbors would probably go their separate ways. However, for the case of SERS, many of the neighbors would continue to live together in the replacement flats.