Singapore is in the middle of en bloc fever where private condos like New Futura Condominium may get compensated double what their homes are worth on the resale market. Such an amount of money is attractive to many. If you own a private condo, then you must be asking if your home qualifies for the collective sale.
The mathematics are simple. If a developer can buy the entire block, top up the lease, pay the development charges and then tear down the place having paid the marketing agency and other admin charges rather than buying an empty land from the government, then it makes sense. So, how do you know your condo development is prime for en bloc?
Lack of government land around your area
There is a lot of negotiation involved in en bloc. If possible the developers would instead spare the agony and go for empty government land. However, if there is no new land being released then chances are an en bloc form developers is coming.
Rising property and land value in the area
If the cost of land is tremendously rising in your area, the land your condo is sitting then becomes more valuable. This makes it cheaper for a developer to buy, tear down or redevelop your condo that to buy from government auction which has intense competition amid developers
Your condo development is old
Gentrification is not a new thing. Newer development utilizes the limited space in Singapore in a more efficient way. An old development goes cheap and hence a target for most developers.
Inefficient use of the space in your development
Singapore is a small country but has a high demand for development areas. If your development has too much car park space, too many green spaces, chances are someone will seize the opportunity and put such space to better use. This is as long as they convince the author that their development will not incur environmental harm and promise to generate more revenue for the government of Singapore.
The resale transactions are scarce
Recent developers are more unlikely to agree to a collective sale. This is because of the Seller’s Stamp Duty (SSD) despite not wanting to move again. For an en bloc to happen, at least 80% of the residents need to agree before the agreement is passed.
Such a number agreeing is not easy as it sounds. One of recent and good example is the ongoing attempt to sell Pine Groove condominium which has turned ugly with residents reporting heated meeting, owners forming factions and lawsuits against the chairman of the management committee against the committee that was set up to manage the sale.
Tension during en bloc is not unusual with the fault line emerging between those who are fore and against the sale, each with a strong opinion as to why they choose or don’t choose to sell their homes. Similar cases are seen in the Horizon towers and Tampines Court where a monitory of owner declined to sell their homes resulting in protracted lawsuits and hefty cost in both