Goodbye, en bloc sales

April 27, 2008

Goodbye, en bloc sales

By Teo Cheng Wee

Pender Court. Finland Gardens. Tulip Garden. Makeway View. These were all attempts to sell an estate en bloc which fell through, all within this month.

But even as the en bloc fever cools, not all the affected residents are getting hot under the collar. Many told The Sunday Times that they were disappointed to miss out on a good price, but were happy to stay put.

It was reported last Friday that the sale of Pender Court, off West Coast Highway, had fallen through. Others reported include Finland Gardens in Siglap on Tuesday; Tulip Garden in Holland Road on April 9; and Makeway View in the Newton area on April 1.

Italian expatriate Lucia Omodei, 43, who has lived at Tulip Garden for six years, said: 'We looked elsewhere in case we had to move out, but we didn't find anything this ideal. Besides, we would miss our neighbours.'

A fellow resident, music teacher Y.C. Lee, 75, saw the bright side in the 'consolation hongbao' he received, a $120,000 payout which was his share of the $25 million deposit that the buyer forfeited.

The unhappy ones are most likely those who had bought another house and now face financing issues.

The Sunday Times spoke to residents in some of the failed en bloc estates to find out how their lives have been affected.

------------------------------------------------------------------------

Couple's dream turns to nightmare

From en bloc dreams to endless nightmares - that was how Madam S.L. Chia and her husband described their experience these past two years.

It became a nightmare because the promised $1.1 million from the sale of the couple's Finland Gardens flat never came, as the deal became snagged in a dispute.

They were still servicing the loan on their flat, in Siglap, when the couple went ahead and took a loan on a second property.

Thus, closure of sorts came for them when, last week, the collective sale was called off. It had been sold in November 2006.

Madam Chia, 47, her husband, 55, and their son, 15, will be staying put in Finland Gardens, which has been their home for the last 14 years.

She felt that the collective sale had rushed her into buying a second flat.

A friend had advised them to buy another place quickly because he expected that property prices would go up further.

'He was right. Within six months of our new home purchase, prices went crazy,' said Madam Chia, who works in the media industry.

The new flat, further away in Upper East Coast, cost $800,000. Madam Chia took a 10-year loan that resulted in her having to pay $4,000 - effectively, her monthly salary - every month.

What the couple did not expect was that minority owners would successfully object to the sale.

The couple had ended up so strapped they could not afford to renovate their new house - something they can finally do now.

'And enough of the term 'en bloc' please,' Madam Chia said.

------------------------------------------------------------------------

Deal's off but she still lucked out

For housewife Jane (not her real name), the no-go on the en bloc deal at Tulip Garden, where she has a flat, proved a blessing.

Worried about spiralling home prices when talk of a collective sale started last year, she liquidated all her stocks in August to help pay for a $3 million apartment near Holland Road.

'Prices in the area were going up by $200,000 every month. I got scared,' Jane, 58, told The Sunday Times.

But selling her stocks was the right move - she cashed out before the stock market took a hit late last year.

If there had been no en bloc push, she probably would have held on to the stocks, she admitted.

Her family got a $120,000 share of the deposit the buyer had forfeited for Tulip Garden.

She noted that she was lucky. Her finances allowed her to buy another home without depending on money from the collective sale.

'Those who do - and I know a few residents in this situation - may have some problems,' she said.

Jane thinks Tulip Garden is still a good property because Farrer MRT station will be up in a few years. That could drive prices even further up, she said.

She will keep her unit and rent it out and move to her new home. She has an added reason to do so.

'This en bloc issue has soured relationships between myself and some of the neighbours here because I didn't want to sign for it initially. So I don't want to stay here any more,' she said.

------------------------------------------------------------------------

He's glad that 2-year saga is finally over

Mr Micky Sim was overseas when he first heard that his estate, Finland Gardens, was going to be sold en bloc two years ago.

The first thing he did was to call his contractor who was renovating the unit he had recently bought there.

'I cut back by at least 30 per cent. Forget about partitions. And we made things movable, rather than fixed,' said Mr Sim, 38.

He bought the apartment before the deal was announced.

Two years on, he can finally go ahead and finish the renovations.

As one of the minority owners who contested the sale of Finland Gardens, he is delighted that the estate will no longer be sold.

But he feels that most of the majority owners will not be unhappy either, as the deal was made before the upswing in the property market last year.

Mr Sim, who works as a director in a shipping company, thinks that even if the owners sell the apartments themselves, they can do better than the $504 per square foot price offered by the en bloc buyer - even though the market has since been cooling.

Still, he is happy to stay put at his home and will sell only if the price is right.

The two-year saga has hurt the spirit of the community somewhat, he conceded.

But he feels that most neighbours are still on good terms.

'It's time for everyone to move on. Let bygones be bygones,' he added.

------------------------------------------------------------------------

Doc, 53, has to finance 2nd home

Dr Chia Kiat Swan is decidedly philosophical about the recent purchase of his second home.

The medical doctor had bought a landed property - he declined to say where - thinking that it could be paid for with the $2.5 million he expected to get from the collective sale of his Tulip Garden apartment.

Instead, the money will now have to come from out of his pocket after the deal fell through earlier this month.

'Life is uncertain. We just have to make adjustments,' said Dr Chia, 53, who is married with two children and has lived in Tulip Garden for 22 years.

On the bright side, the new house which he bought in the middle of last year is now being rented out and getting returns 'good enough to pay back the loan plus interest'.

He added that he was not alone, as he knew of other people who had also bought units in anticipation of the collective sale going through.

'But as far as I'm aware, no one is in financial crisis because of their decision,' noted Dr Chia, who is also the chairman of Tulip Garden's management council.

Having already fully paid for his Tulip Garden home, it pains him to think about having to spend another 15 years to finance his new house.

That is when he gets philosophical again.

He said: 'If I can make a profit, I'll sell the house. Anyway, I'm not planning to retire so early. I can't be playing golf every day.'



Copyright © 2007 Singapore Press Holdings. All rights reserved. Privacy Statement & Condition of Access


EastLiving.com.sg

Contact Stuart Chng: (65) 9691 9907
Email: stuart.chng@eastliving.com.sg

EastLiving - Singapore Property and Real Estate DB