Home owners need to look beyond 'en bloc windfalls'

There were a record 20 projects that were sold en bloc last year.

A variety of reasons were cited as factors for owners cashing in: The estates are getting old; it is getting costlier to upkeep the lifts and the swimming pools; and some of the owners themselves are getting on in age and finding it hard to maintain their homes in an older condominium, which are usually larger than new apartments.

But behind every successful sale are affected owners who have to start looking for a new place to live.

They have to enter the property market and compete with newlyweds and others who are moving for different reasons, as well as investors and immigrants looking for property. Inevitably, property prices will move upwards.

Furthermore, after taking into account various costs, such as legal fees, renovation cost, costs related to the collective sale transactions and miscellaneous costs from selling and buying a property, I am not sure the windfall from the sales will really amount to much.

Not only that, owners are leaving a home and an estate that they have been familiar with for many years of their lives to move to another property that could be more expensive per square foot, much smaller and less convenient.

There may be an impact on residents' emotional and psychological well-being over time too, especially if the community spirit from their previous homes was strong.

In many cases, owners are dazzled by the immediate monetary gains that property developers dangle and fail to consider the intangible factors and other hidden costs, resulting in regrets, as the gains eventually dwindle in inflationary times.

The real winners from the "en bloc craze" are the property developers, property agents and conveyancing lawyers.

Gabriel Cheng Kian Tiong

A version of this article appeared in the print edition of The Straits Times on January 15, 2018, with the headline 'Home owners need to look beyond 'en bloc windfalls''. Print Edition | Subscribe