En bloc sales may be hot but beware pitfalls, say experts
Not all homeowners benefit from collective sales
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.
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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