Craze over collective sales

Instant millionaire from collective sale, but money's for new home and retirement

Pre-school principal Diana Chong did not go into the collective sale wanting to be a millionaire. "The intention was to get good returns on the estate, which was in dire need of maintenance, and to avoid having to pay more for its upkeep," said the m
Pre-school principal Diana Chong did not go into the collective sale wanting to be a millionaire. "The intention was to get good returns on the estate, which was in dire need of maintenance, and to avoid having to pay more for its upkeep," said the mother of three.ST PHOTO: KHALID BABA

For pre-school principal Diana Chong, 50, the $1.7 million she got from the collective sale of Shunfu Ville is a godsend that helped provide financial security - especially after her husband's retrenchment two years ago.

It hasn't been an easy road for her and many residents of the 358-unit privatised HUDC estate in Bishan, which finally got the green light from the Court of Appeal in May this year, four years after the collective sale committee was formed.

"I didn't go into the en bloc process wanting to be a millionaire," said Mrs Chong, a mother of three, aged 16 to 22. "This was our sole residence. The intention was to get good returns on the estate, which was in dire need of maintenance, and to avoid having to pay more for its upkeep."

The Chongs had bought their 1,700 sq ft maisonette for $500,000 in 2002 because it was near her children's primary school. Now, with their windfall, they have bought a 1,300 sq ft flat near Bishan for less than $800,000 and saved the rest for retirement and their children's education. "My husband was retrenched twice, most recently two years ago, so we don't take this for granted. One million dollars can disappear very fast. My kids are going to university and we just want to pay down our housing loan and be debt free," Mrs Chong said.

The family can finally move on after the deal was completed in July this year. "The court battle has been emotionally draining for all of us, a roller coaster. Neighbour had to fight neighbour in court. The majority of us were for it, but a few were against. Because of the court fight, we were told to not commit to an alternative property until the deal is confirmed," Mrs Chong said.

The sale made headlines in May last year, when more than 82 per cent of the owners agreed to sell the estate for $638 million to property developer Qingjian Realty. Each flat owner stood to pocket an average of $1.782 million, after they had agreed to lower the reserve price from $688 million to $638 million. But the deal hit a snag when some owners objected to the sale, later filing an appeal to the High Court.

However, Qingjian in January this year won High Court approval for the purchase. Then some owners appealed the ruling to the Court of Appeal, but that was dismissed in May this year. Mrs Chong said: "It was very silly to fight among ourselves. We wanted a civil end to it because ultimately, the legal costs were borne by all the owners."

Shunfu Ville's sale is among a slew of successful bids to sell en bloc for private residential estates that has picked up pace since last year, and the sale fever is shaping up to be the hottest in a decade. The land grab is due to depleting land banks and as the Government has held off on Government Land Sales offerings, developers have had to turn to collective sales to replenish their stock.

 

Fuelling their appetite too is the improvement in private home sales and better sentiment in the property market. Successful collective sales have in turn encouraged more owners of ageing residential properties to start monetising their assets.

Mrs Chong said: "The estate was very old, and our sinking fund was getting depleted. If we don't sell now, there will be lots of maintenance needed - the roof was leaking, the facade of the estate wasn't good, there was water seepage."

On the other hand, many did not want to move because they are comfortable with the neighbourhood.

Said Mrs Chong: "We've been neighbours for 15 years here, so there's a sense of sadness that we have to part. But something good has come out of this. Most of us are downsizing, so we'll be giving furniture to the needy, and recycling as well."

A version of this article appeared in the print edition of The Sunday Times on November 12, 2017, with the headline 'Instant millionaire but money's for new home and retirement '. Print Edition | Subscribe