Those of you following my blog will know that my estate has been trying to go on collective sale (or en bloc, as its popularly known), once in 2018, and again in 2021. Both times have failed to conclude, although we did get to an 80% mandate in 2022 with a $950M reserve price. That unfortunately, proved too high for developers to bite, and we closed the attempt with no bids.
Well, we’re back with a 3rd attempt at the en bloc, and this time, i’m hoping 3rd time’s the charm.
There are many reasons that we can put forward, for the estate to go en bloc:
- Loyang Valley is getting older. Completed in 1985, it will be 40 years old! We’re a 99 year leasehold condo. Value depreciation is real.
- Maintenance fees will go up, as estates mature and require more frequent upkeep, and more major repairs.
- Developer unsold inventory is relatively low, meaning they will be in the market to scoop up land.
Unlocking & recognising the value accrued
Over time, the property market in Singapore has been going up. But at some point, we have to lock in those profits. With the lease getting shorter, we will inevitably start seeing the value of our property start to drop, primarily due to these reasons.
- People rarely want to buy properties with less than 60 years on the lease
- Developers have to pay more to top up the lease back to 99 years, and this will impact the price at which they bid, and the proceeds we will receive
- There are also financing restrictions to consider for buyers when they look at older estates, potentially restricting their ability to finance the loan with CPF, and reducing the buyer pool
My personal reason for wanting the En Bloc
For me, personally, it’s all about wealth preservation. I don’t want to see the value of my property start declining, and also having to pay more maintenance down the line.
The en bloc presents a great opportunity for us to cash out, and potentially turn a 99 year leasehold investment into a freehold property somewhere else, or a newer 99 year condo. I have 2 young kids. The en bloc is also an opportunity of a lifetime to set them up for future success with a bag of starting capital.
Yes, the size of the unit matters, and Loyang Valley is widely known to have big, comfortable spaces. But what’s the point in having a spacious home, but the foundations are starting to decay?
I love loyang valley, but everything has its time and place. For us, we’re ready to let this beautiful place go, and maybe with an en bloc, it can have a new lease of life.