With property buyers standing on the sideline, here comes more activities on en bloc. Some deals are closed. Some owners want to try their luck. More are doing their research on the en bloc topic.
1) Selling your home en bloc
Ask yourself the following questions:
- Do you plan to upgrade or downgrade after the en bloc?
- Can you afford a similar or better unit in the same location with the en bloc money?
- Can you trust the developer who promised you a replacement unit?
- Are you sure that your standard of living will really get better after en bloc?
It may be your matrimonial home. You’re familiar with the surroundings and used to the environment. Perhaps you’ve developed strong relationship with your neighbors.
If it’s your home, it’s inevitable that you’ll be emotional about it, especially if you’ve been staying there for many years.
You may like to read the stories about the Gillman Heights residents after the en bloc.
2) Investing in properties with en bloc potential
Take note of the following before you buy:
- It’s rare for any en bloc to be successful the 1st time. It usually takes a 2nd or 3rd time, and in between a 2-year restriction period.
- What will you do with the property when the en bloc fever dies?
- Are you fine with low rental and high maintenance cost of an old development?
3) My owner’s story
During my early years in Singapore, I used to share a private apartment with flatmates in Novena. Built in 1986, it was a spacious flat with only 24 units. It’s conveniently located in district 12 (just one street away from district 11).
The owner bought the property for its en bloc potential at around $850,000. The last tenant rented the place at $2,500 per month. We rented during the bad times, at a bargain of $1,800 (fully furnished). The rent was reduced to $1,600 and $1,500 in subsequent renewals.
Owner was heavily “subsidizing” us with a monthly mortgage payment of $2,500. This was on top of the maintenance fee, property tax, etc. he’s paying. And the worst part was the on-and-off repair of an older development …
After we moved out, there’s so much work and expenses that the owner simply left it vacant for a few years. The apartment was finally sold en bloc for over a million.
Honestly, after taking into account the effort and cost of keeping the place over the years, I don’t think the owner made much of the deal.
4) What about the environment?
If you walk down the streets of some beautiful cities in Europe, one is often amazed by the tireless efforts of how locals restore historical buildings. Old apartments are seldom demolished. Instead, there are more interests in conserving the outlooks and refurbishing the interiors.
Personally, I think en bloc in Singapore is against all principles of environmental protection. New buildings as new as 30, 20 or even 10 years are pulled down just because there’s resale value.
Are we putting money above everything in this small island?
Leave a Reply