The main reason why en blocs don't go through

Singapore’s most talented diplomats are wasted in the property market.

When the government needs expert negotiators, they should be looking for the en-bloc specialists in property firms. Because if anyone can pull off even one successful en-bloc negotiation, they’ll have no problems with easier things, like getting the High Speed Rail built.

When it comes to en-bloc meetings, everyone involved really needs to win; because losing means having to buy a condo at today’s prices. And if you think that sounds upsetting, wait till it happens to you when you’re 82 years old, or after you just spent $100,000 renovating your "forever home" a month before the en-bloc meeting. 

If you’re old enough to remember too, a bad en-bloc deal can be very upsetting. Most ex-Gillman Heights owners are probably still very sore about the collective sale (which is now The Interlace). 

The resulting atmosphere is like an MMA ring where no contestant is actually allowed to hit anyone;  so they just project all their violent frustration into gibberish insults, or — later in the week — teenage-level vandalism. 

If you think there’s going to be graphs and math and rational discussions of sale proceeds, you’re going to be sorely disappointed. The first hour alone might just be both sides accusing the other of insensitivity, racism, corruption, and being members of the uncaring elite. 

I recently heard from a reader who attended one, and left after an hour as the meeting couldn’t even begin. The residents were arguing over who should get to present, or rather, who should be allowed to present. And proceeded to descend into loud heated shouting because "how dare you raise your voice at my wife". 

The representative from the real estate firm needs to rise above the din, and present issues like:

1. How the sale proceeds are distributed
2. What prices developers may go for
3. The current state of the market 
4. What sellers can expect if the sale does goes through
5. How their parents are legitimately married, and it’s okay that the old uncle said that about their mother, emotions are running high, haha

Even if someone manages to cut through the din, there are some wedge issues that can cause an en-bloc to fail, no matter how reasonable the sale

So the condo predates the Vietnam War, and the maintenance fund is down to two rolls of masking tape and positive thinking. Well some might still reject the sale, because of these common sticking points:

• They’re foreigners, and if their unit goes up for en-bloc, their replacement unit will now come with 60 per cent ABSD. 
• They’re retired and live off the rental income, and buying a new rental asset at 20 per cent ABSD is financial cancer for their portfolio. 
• They just bought the place this year, and they’d have to pay 12 per cent Sellers Stamp Duty. Coupled with their renovation and furnishing, they may as well have replaced their toilet rolls with thousand dollar bills. 
• The Method of Apportionment is based on share value, so the people with the biggest units (i.e., the higher percentage of ownership) are also most likely to reject it, for these reasons. 
• The sale proceeds are going to come way too late, like in 12 months, and they’re too cash strapped to finance a replacement in that time
• The move would happen during their children’s PSLE or O-Levels, so wait two more years. Do not pressure Singaporean parents at those times, they’ll bite your face off.

Then there’s people who just have an emotional attachment to the place, and it would take more money than a developer — or God — has to uproot them. That’s what happened with Mandarin Gardens.

These factors, more than the wider economy or the actual math, is what causes en-bloc sales to falter. For those who are looking to buy for a collective sale windfall (and have never attended an en-bloc collective sale meeting), be prepared for it to be a long-drawn, and sometimes unpleasant, affair. 

Weekly sales roundup (Nov 27 — Dec 3)

Top 5 most expensive new sales (by project)

Top 5 cheapest new sales (by project)

PROJECT NAME	PRICE $	AREA (SQFT)	$PSF	TENURE
GEMS VILLE	$988,000	517	$1,912	FH
THE CONTINUUM	$1,463,000	560	$2,614	FH
J’DEN	$1,488,000	527	$2,821	99 yrs
THE MYST	$1,555,000	700	$2,223	99 yrs (2023)
PULLMAN RESIDENCES NEWTON	$1,659,240	463	$3,585	FH

Top 5 most expensive resale

PROJECT NAME	PRICE $	AREA (SQFT)	$PSF	TENURE
CAPE ROYALE	$6,100,000	2508	$2,432	99 yrs (2008)
MARINA COLLECTION	$5,728,000	3272	$1,750	99 yrs (2007)
REFLECTIONS AT KEPPEL BAY	$4,525,000	2637	$1,716	99 yrs (2006)
HILLTOPS	$4,500,000	1550	$2,903	FH
MAPLE WOODS	$3,880,000	1787	$2,171	FH

Top 5 cheapest resale

PROJECT NAME	PRICE $	AREA (SQFT)	$PSF	TENURE
PRESTIGE HEIGHTS	$628,000	334	$1,882	FH
RIVERBAY	$650,000	388	$1,677	999 yrs (1882)
THE PROMENADE@PELIKAT	$700,000	484	$1,445	FH
PARC SOMME	$707,000	452	$1,564	99 yrs (2008)
28 RC SUITES	$750,000	452	$1,659	FH

Top 5 biggest winners

PROJECT NAME	PRICE $	AREA (SQFT)	$PSF	RETURNS	HOLDING PERIOD
KOVAN RESIDENCES	$2,970,000	1765	$1,682	$1,746,000	15 Years
BRADDELL VIEW	$1,728,000	1615	$1,070	$1,288,000	19 Years
BOTANNIA	$2,155,000	1270	$1,697	$1,145,350	14 Years
THE ALPS RESIDENCES	$3,500,000	2486	$1,408	$1,060,000	7 Years
SOUTHAVEN II	$2,450,000	1507	$1,626	$1,050,000	12 Years

Top 5 biggest losers

PROJECT NAME	PRICE $	AREA (SQFT)	$PSF	RETURNS	HOLDING PERIOD
HILLTOPS	$4,500,000	1550	$2,903	-$650,000	10 Years
ONE SHENTON	$2,850,000	1582	$1,801	-$512,450	17 Years
REFLECTIONS AT KEPPEL BAY	$2,720,000	1561	$1,743	-$436,300	17 Years
18 WOODSVILLE	$1,230,000	732	$1,680	-$142,050	12 Years
ROBIN SUITES	$1,230,000	538	$2,285	-$131,140	11 Years

Transaction breakdown

ALSO READ: 6 surprising property 'red flags' that are bad for some, but good for others

This article was first published in Stackedhomes.