In the year 2017, the number of en bloc deals reached 27, and the total value of sale transactions was S$8.13 billion.
2018 was a stellar success for the en bloc market – with over 35 residential deals collectively valued at over $10 billion, a record-high in more than a decade.
To illustrate the extent of the success, here are the top 5 performers:
- Pacific Mansion (completed in 1976) – sold at $980 million
- Tulip Garden (completed in 1985) – sold at $906.9 million
- Park West (completed in 1986) – sold at $841 million
- Pearl Bank (completed in 1970) – sold at $728 million
- Goodluck (completed in 1984) Garden – sold at $610 million
These figures are a whopping 30% more than the en bloc sales closed before 2007.
If you dig deeper into the statistics, these en bloc developments are either located in the town area or near Jurong Lake District(which was announced by URA to become the 2nd CBD area).
Given that you own a mature estate in these areas, who knows if you’ll become the next “en bloc” millionaire?
En Bloc Market Outlook 2019 and Beyond
As you know, the property in Singapore are not built to serve as an investment vehicle, but instead, they are built with the intention for own stay.
To prevent the real estate market from overheating, the Singapore government has implemented cooling measures in the form of higher Additional Buyer Stamp Duties(ABSD) rates and tighter loan limits in Jul 2018.
As such, en bloc sales volume has fallen significantly in 2019 due to these cooling measures kicking in.
However, there are still optimistic property owners who are actively putting up their development for en bloc.
Pros of en bloc sales:
- It provides the ability to monetise older investments immediately.
- Previous owners get a hefty amount that can work for them as a retirement fund or meet other emergency needs.
- Older buildings demand more repair and maintenance; Putting them up for En bloc can save you from that mess.
- The received money can be used to buy a new apartment.
Cons of en bloc sales:
- Families may need to look for new amenities at a new place such as good schools for their kids.
- If homes have some existing tenants, the terms and conditions will be required to be changed, and it may appear a little costly affair.
To conclude, the pros certainly outweigh the cons given that the cost of living in Penrose by CDL
continues to rise as we speak.
It’s an excellent exit strategy and opportunity that helps people to “renew” their apartments and keep their capital gains that may come in handy for the future.
Readmore: Will En Bloc Sales Make You A Millionaire?