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Singapore

En bloc sales may be hot but beware pitfalls, say experts

This article is more than 12 months old

Not all homeowners benefit from collective sales

Yunita Ong
Oct 05, 2017 06:00 am
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For some homeowners, en bloc sale proceeds can be a ticket to financial freedom.

So the 76-year-old owner of a four-bedroom unit at Jervois Gardens was relieved when it sold for $72 million last month.

The retiree, who wanted to be known only as Mrs Tan, expects to get about $4.4 million for the unit she has owned since 1984.

"I'm happy and relieved as I can pay off my housing loan," she told The New Paper.

The money will also go towards her medical expenses.

With en bloc fever back after a 10-year slump, there are many happy home owners like Mrs Tan.

Business

Number of private homes sold up 7 per cent in October

Nov 16, 2017

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Jump in non-landed private home resale activity

Collective sale fever may not lead to higher prices

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Property consulting firm JLL told TNP yesterday that this year has seen 13 residential collective sale deals totalling $4.5 billion.

Mr Ku Swee Yong, executive director of International Property Advisor, said the elderly may jump at an en bloc sale to pass on liquid assets to the next generation.

He said: "There will be many willing to downgrade, especially if they have retired and the children have flown the coop."

DOWNGRADE OPTION

For Mr Daniel Ang, a retiree in his 70s, and his wife, downgrading is an option. They live in Braddell View, a former HUDC development at Braddell Hill that has been put up for sale at more than $2 billion.

Mr Ang, who bought the five-room unit for about $100,000 in 1980, said: "It really depends on how much the developers are willing to pay. After all, I got this place cheaply."But property experts say that not all owners welcome an en bloc sale or benefit much from it.

Mr Louis Tay, a senior agent at Ohmyhome, a real estate marketplace app, said the elderly might face problems, such as being eligible only for a smaller loan with a shorter tenure due to their age and income.

Mr Winston Lee, head of regional projects at PropertyGuru Group, said: "Those who purchased their properties in the last three years are also likely to incur seller's stamp duty, which will take a bite out of their returns."

He added that they would feel the pinch even more if they took a renovation loan for their new home.

Mr Alfred Chong, 62, a retiree, is unhappy despite an expected yield of $1.71m to $1.75m from the recent sale of Tampines Court.

He said his family of five would have to downgrade to an HDB flat from their three-bedroom mansionette home since 1989.

"Where am I supposed to move to?" he said.

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Yunita Ong

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