The Collective Sale Enblocs market has seen an upward trend since 2017 and this year saw the second largest sale ever in the history with the sale of Pacific Mansion for $ 980 million along River Valley. The property owners are considering the opportunity of earning prosperous deals after the en bloc sale of 15 properties in Q1 of 2018.
EdgeProp has built an en bloc calculator based on the logit model which determines the probability of a condo to be put for collective sale and the success of such sale depends upon three variables such as the number of units, enhancement of property value and property’s age.
Collective Sales Guide Singapore Properties
A Collective Sale Committee (CSC) should be elected by the owners at the General Meeting and the requisition of such meeting requires owners comprising 25 percent of the total owners ( in nos.) or 20 percent of the total share value. The Committee’s responsibilities include getting the consent of the requisite majority and appointing a lawyer and property consultant as well as drafting the collective sales agreement with a proposed reserve price. The Committee members appointed should be responsible and should comprise of owners from all units. The CSC candidates should disclose an actual or potential conflict of interest during the elections.
Collective Sales Enbloc for Residential Development in Hougang
Non-consenting owners for Hougang enblocs in Singapore can raise an objection based on validity that the collective sale process was not conducted in good faith and another valid objection can be on grounds of financial loss which is defined as getting less from the collective sale with respect to sale in the open market. This option of objection would not be viable as CSC would have considered it while setting the reserve price. Developments include former Rio Casa Enblocs as well
The en bloc process usually takes a year or two and the demand and supply with regard to collective sale en bloc could have changed during such phase. The owners get their proceeds within three to six months. In case of approval from the court or the Strait Tiles Board, it can take even longer.
The collective sale en bloc process has an uplifting effect on the property prices. Cairnhill Mansions was sold for $ 362 million in February as an en bloc or at a land rate of $2,311 psf ppr which indicates that the selling prices of new establishments are likely to be $3,500 psf and above. It is estimated that projects in Cairnhill and River Valley could reach $3,500 psf in the current scenario.
Collective Sales Private Treaty
In case, no formal bids are received for the en bloc project in Hougang Avenue 7 then the law allows to enter into a private treaty with interested parties within 10 weeks after the closure of tender as happened in the case of Shunfu Ville.
Your Property counts as -1 when you have sold your private residential property in a collective sale and you will not be required to pay Additional Buyer’s Stamp Duty (ABSD). For property owners who have sold in a collective sale, a replacement property with the help of a bridging loan can be a viable option for them as the banks are extending 15% of your new property at the rates of 6.5% p.a. The proceeds from such loan can be used to buy a new home until proceeds from collective sale arrive.