Bank on it!

It is a sad fact that those who want to buy enbloc are more experienced than Stayers. It's a case of Mr-Developer-saw-a-chance-to-make-a-huge-profit-from-unwitting-condo-owners-and-went-laughing-all-the-way-to-the-bank. This scenario will undoubtedly change as owners become more savvy about en blocs. Or because many lambs to the slaughter have been examples for all of us to learn from. Take for instance the many owners who sold out and found that the market for their properties increased THREE OR FOUR TIMES from the day they signed the CSA to the day they received their pittance payments from the developer. Hopes crumbled for reaping profit. Anxiety replaced euphoria. Even those who voted "yes" asked those who voted "no" to negate the sale.

Finally, a reconciliation with one's neighbours. Ha Ha!

Actually, there's a simple way to look at it.

You sold at X. The developer puts in X+C. He needs to make a profit. So he charges X + C+ P. Oh no. That new price is the benchmark sale for condos in your area by the time you get your cash. So you have to stump up X+C+P+stamp duty +reno cost+moving cost. That's a far journey from X, yes? And not a profit, right?

Why didn't you realise this earlier? To be fair to those who fell before you, those sacrificial lambs, they were new to the game. And the game had so much glamour! Fever!

Beware of wolves in saucy alluring clothing.

Here are some of the sentiments expressed by the lambs before the slaughter:

  • $$!!! profit
  • the press reported sales everyday so we must cash in on the fever
  • if so many of our neighbours are for it, it must be good (baaa...baaa)
  • I can go either way, makes no difference, a little more in the pocket is good though
  • agents packaged the en bloc and replacement units so attractively
  • no one is interested to upgrade my condo
  • the pressure to sign the CSA and the calls from the SC and agents were hard to handle
  • *the fact that a big developer wants to buy from me is exciting, wahlau Ong Beng Seng!

Here are some of the sentiments expressed by the lambs after the slaughter:

"I will fight to keep my home. My chances of winning may not be high but I will exhaust all legal means to protect my home."

"This is my home, something money cannot buy."

"Against my wishes, I not only have to give up my home but am also forced to compromise significantly in terms of area size, location and environment of my new home"
"I would like to appeal to the public to beware the pitfalls of collective sales and hope all homeowners in a similar situation be mindful not to let go of their property unless they can find a suitable alternative"

"We will already have to suffer from losses such as renovation costs, stamp duties, interest charges on our mortgages and other transaction costs. We had to sell below the replacement cost, touch our pecious savings and the loss has been too huge to bear"

"Even the SC wanted me to win my case. The market went up and everyone was shortchanged. I sued .. everyone lost. Whole condo was sad. The market went up and our proceeds were short by one third to buy a new home.!"

Your biggest single investment. Please... consider a financial model? Financial models are all about basic maths. So here goes

  1. what is your loan
  2. how much interest have you paid to the bank (be honest... how much did you really pay so far)
  3. what maintenance have you paid over the years?
  4. how much CPF do you need to return with interest
  5. what is the cost of a new property with stamp duty and renovation (remember this will be two years down the road and you can't predict the market - so provide for at least 100% increase, 200% to 300% safer in prices)
  6. what is the transport, relocation, and other costs to move to the new location

Now. Minus all the above against the en bloc offer price.

Positive cash flow and profit? No? At the end of the day, en bloc profit is a myth. Created by the people-who-laugh-at-you-all-the-way-to-the-bank.

En blocs started in 1999. But really only caught on in the past few years. Mistaken assumptions have been made by the many. But their tales are good guide posts for YOU.

Only you can become Mr/Mrs Stayer-who-wised-up-and-realised-that-profit -from-en blocs-is-a-big-load-of-hogwash.  Not worth the drama and the trauma.

That's my opinion anyway. And that of all those sacrificial lambs from the condos that en bloced. They are now wearing shorts. Because in the en bloc process, you see, they lost their pants!

What is your experience in your en bloc? To make a comment, register here