Will a Home Improvement Programme increase the value of your HDB flat?

Does a Home Improvement Programme by HDB actually increase the value of a HDB flat? Get to know how the HIP affects your HDB flat!


What is the Home Improvement Programme (HIP)?

First up, what is HIP? This programme helps resolve common maintenance problems such as spalling concrete for flats built before 1986. This means these flats are around 30 years in history by now.

Also, during the National Day Rally 2018, it is announced by Prime Minister Lee that there will be an expanded programme dubbed the HIP II, which will give all HDB flats a second round of upgrading when they reach their 60 to 70-year mark.

The purpose of these upgrades is to keep HDB flats safe and livable. The HIP will proceed when at least 75 per cent of a block’s eligible Singapore Citizen households have voted in favour of the HIP.

There are three main components of HIP. They are (1) Essential Improvements, (2) Optional Improvements and (3) Enhancements for Active Seniors (EASE). Under the essential improvements, the upgrades are done for public health, safety, or technical reasons.

Will a Home Improvement Programme increase the value of your HDB flat?_Home Quarters SG_KC Ng Keng Chong

HIP upgraded bathroom source: The Straits Times

They include repairing spalling concrete, replace waste / soil discharge pipes, replacing pipe sockets with a new clothes drying rack and upgrading the electrical load. Under the Optional Improvements, residents can choose whether or not to upgrade existing bathrooms, install a new decorative door or grille gate, or even a new refuse chute hopper. 

Under the EASE program, if there are elderly family members living in the unit, residents can choose from a range of elderly-friendly fittings, such as slip-resistant treatment for bathroom floor tiles and grab bars within the flat.


What about the costs of the HIP?

Secondly, let’s take a look at the cost. For Singaporean households, the Essential Improvements are fully paid for by the Government. The Optional Improvements are heavily subsidized up to 95%, so residents pay an estimated amount of between $630 and $1,575, depending on their flat types. For EASE, the full range of items will cost around $2,500. After government subsidies of up to 95%, Singapore Citizens pay between $125 and $312.50, depending on their flat types

Residents can use their CPF to pay for these costs, in full, if they choose to. However, Singapore Permanent Resident (SPR) households have to pay the full upgrading cost. Because of this, for HDB owners that are looking to sell the unit after the HIP is announced but the bill has not yet been paid, SPR households may be discouraged from buying it. They will need to pay the full sum which could add up to a 5-figure sum when they are the owners.


Duration of the upgrading

Thirdly, how long will the upgrading takes? The construction period for a typical precinct comprising eight to 10 blocks will take about 1.5 to 2 years. The actual renovation works in each flat will take 10 days or less, depending on the improvements selected.

The implication here is that there is only an estimated date that is release when HIP is announced and thus, if buyers are looking to renovate the unit, they will either choose to forgo the heavily subsidised bathroom renovation provided by the government or renovate the rest of the house leaving the bathrooms, door and gate to be renovated later. This will be a huge inconvenience if the buyers do not have an alternative place of residence and will need to move into a ready unit fast.


So, will the HIP increase the value of the HDB flat?

From experience, they help the flat retain its value as its 99-year lease runs down but does not serve to increase the value of the HDB unit. If it occurs before or during the works, it might attract Singaporean household buyers that are keen to enjoy a heavily subsidized new bathroom, chute hopper, door and gate as these are items that usually will be replaced after the sale anyway.

But will turn off SPR households that will need to fork out more money than the resale price of the unit when they are being billed the HIP cost by the government or those buyers that wish to move into a ready unit soon and do not want to put up with the inconveniences.


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