The Business Times

Life after en bloc

While a collective sale brings windfall gains and financial security to many, it can also result in downgrading and bad decisions

Published Fri, Feb 1, 2019 · 09:50 PM

THE hoary chestnut that money can't buy happiness probably applies to a good many en bloc millionaires, a unique Singapore species who appeared not due to evolution, but rather a property transaction process which has resulted in thousands of individuals being made suddenly and seriously rich. In 2017, there were 3,492 apartments sold in collective sales worth S$8.6 billion, compared to 3,216 units which netted S$10.8 billion in the first 11 months of 2018, according to real estate consultancy JLL Research. This translates to an average S$2.5 million for each unit in 2017 and S$3.4 million in 2018.

For most of these newly minted millionaires who came into money after selling their homes, the transfer of wealth has also meant a displacement from familiar surroundings. Once the visions of sports cars and first-class travel fade, bittersweet feelings result. There are also, of course, investors for whom the windfall gain comes without the scramble to find a new home. Some - hand on heart - will sympathise, but not vocalise these sentiments with the minority who objected to the sale.

Once an en bloc sale process is completed, sellers are usually given a period of up to six months to leave, a deadline that leads to much stress until a new home is secured.

"I've moved from 9 to 10 to 11," says a seller who went through her second collective sale at Dunearn Gardens last year, describing her move from the "most" prime precinct of District 9, to the outer limits of real estate desirability.

Districts 9 and 10 are Singapore's most posh addresses. She had to put her travel plans on hold until she found her new home.

Whether they be property investors or someone selling their home, the majority who spoke to The Business Timesabout life after en bloc asked not to be identified.

The sense is that the en bloc sale is not an event to be proud of, a fortune made not through hard work. They also did not want their windfall to be made known.

The cynical may say these are "First World" problems. Newfound wealth does help, especially in retirement planning, but the sense of loss from a home that has been lived in for decades doesn't quite go away, many told BT.


Even 14 years later, the en bloc still rankles.

Former journalist Conrad Raj says he got about S$1 million in 2005 for his apartment.

The en bloc price worked out to less than S$500 per square foot. His flat was 1,250 sq ft and the building was on freehold land in prime Cairnhill, a stone's throw from Goodwood Park Hotel.

Mr Raj, now 71, says half of the proceeds went towards an Housing & Development Board (HDB) flat in Dover Close East, and he banked in the rest.

Life has been good to him since then, he notes. That's because he has continued working, and also due to some "initiatives on his part".

"Every little bit counted," says Mr Raj.

"If the idiots in my Cairnhill block had held out for a couple of months more, we would have gotten more than double what we actually got," he points out.

"And I preferred my previous place which was far more convenient and wished I had gotten more to buy a similar place in the same area. I always enjoyed my life, and, sure, I had to make adjustments."

In a BT article in 2005, Mr Raj explained why colleagues missed the point when they couldn't fathom his anguish over the en bloc.

He wrote then: "What these people failed to realise was that I like living in my flat on Cairnhill Road. It's next to the Environment Building on Scotts Road, and Newton MRT station is a five-minute walk. The Orchard Station is perhaps 10 minutes away. Buses serve me on Orchard, Scotts and Bukit Timah Roads. Taxis are so easy to hail that I very rarely need to make a booking.

"What's more, Orchard Road and its malls, hotels and supermarkets are minutes away. The Newton Food Centre is even closer.

"For a person who doesn't drive, these are important considerations. Because of the convenient location, friends are always willing to give me a lift home. Developers and property agents know the convenience of Cairnhill and therefore attach a premium to the area. Most new developments in the vicinity fetch more than S$1,000 psf."

According to Mr Raj, his replacement home, an HDB flat, is bigger but the previous one was better designed and "it was freehold".

HDB flats which are sold on a 99-year lease must be returned to the state at the end of their tenure.

While many en bloc sellers buy another private property with their proceeds, there are also many who buy an HDB property instead: when the money that "fell into their laps" does not afford them, at current prices, a new home where they used to live.

With increasing numbers of HDB flats nearing the half-way mark of their 99-year leases, the whittling-down of value has sparked debate about home ownership and anxiety among some HDB dwellers.


"It's nice that my parents have a little safety net now," says one former resident of Eunosville, near Eunos MRT station.

The sprawling 330-unit Eunosville, built in the 1980s, was sold in 2017 to Jardine Matheson Group unit MCL Land for S$765 million. Each owner got about S$2.25 million to S$2.41 million.

"My mother hasn't worked for about 20 years and my dad had to rely on his income and the generosity of family members who paid for mine and my brother's education," the Eunosville resident says.

"It's not an ideal situation because we ended up being forced out (my parents were one of the few who didn't sign in favour of the en bloc), and the homes in my old neighbourhood are way too expensive (the amount given didn't allow my parents to buy a place of the same size in the area."

"They would have had to downgrade which is terribly unfair given that we were there for 25 years. But it did help us in a roundabout way even if it means that we now have to travel much further to get to town and spend way more on Grab!"

Another en bloc millionaire, who is 65 and about to move to his new home, remains ambivalent about the S$1.87 million he got from the collective sale of Florence Regency.

The 336-unit Florence Regency in Hougang was sold to Chinese developer Logan Property for S$629 million in October 2017.

"I've lived there 29 years and expected to do so until I die," he says. He spent over half the money on a new HDB flat in a choice location, gave about S$200,000 to his two children and put the rest of the money in a fixed deposit.

"The en bloc (money) helps a lot but at the expense of downgrading to a smaller flat," he points out, adding that he tells his friends who congratulate him on his newfound wealth that the millionaire status didn't last long.

His Florence Regency home was 1,800 sq ft, versus his new abode of 1,150 sq ft.

One en bloc-er who got S$2.87 million from the sale managed to find his new home in the same district. But it meant downsizing to a small apartment for about half the amount.

"My en bloc was in 2012 in the East Coast (Amber Road) and I stayed in the East Coast, though my new place is seven kilometres away. So yes, it's the same area but a little distance away," he adds.

He returned a chunk of the balance to the Central Provident Fund (CPF), and invested the rest in Reits (real estate investment trusts) and capital-guaranteed insurance products.

"No need to take risk at this age. Yes, I'm OK to retire tomorrow thanks to the en bloc."

That life has improved as financial needs are not a big worry is a constant refrain from those who spoke to BT, as long as they don't overstretch themselves in the replacement home purchase.

Most sellers are middle age or baby boomers, staring at long years of retirement.

Singaporeans are expected to remain among the longest-lived people in the world in 2040, according to a recent study published in the medical journal The Lancet.

Researchers estimate the average lifespan in the Republic will go up from 83.3 years in 2016 to 85.4 years by 2040, placing it third out of 195 countries.

One professional says she hasn't decided on what she will do with the proceeds, other than set up an account with a private bank and start a three-month fixed deposit while mulling over the matter.

She also topped up her CPF enhanced retirement sum.

"If I buy a modest property, I hope to still have about S$500,000 targeted for retirement. In reality, when I look at the stratospheric prices for a new two-bedroom condo, I only feel temporarily rich," she says. "So I may go for an older property eventually rather than a pricey, tiny, new condo."

Is life after en bloc a life-changer?

It's a little too soon to know, she feels. "There's a sense of financial security for now, but Singapore is expensive. I am relieved that the en bloc deal went through after three tries and before the cooling measures kicked in."

Cooling measures were introduced in the middle of last year to calm property prices which had risen faster than economic fundamentals, the government said when it decided to tame the market.

Describing the windfall as "a Christmas gift worth over S$2 million", one of the first things the professional did was write a cheque to a new charity for single mums, at a fund-raising lunch.

"That was to remind myself that the en bloc cash is a gift that I can share. I bought gifts and dinners for my family. Treated myself to a fancy suitcase and skincare," she reveals. "This outflow is under S$10,000 - I decided not to overspend and to roll out my purchases over time."

For those who are happy to cash out and in favour of the collective sale, the motivation is generally that they don't need to worry any more over financial matters, says a retiree who's in her 50s.

"One of my neighbours who got S$4.7 million bought an executive condo for S$1.5 million," she adds.

Dumb investments, bad behaviour

One not so-fortuitous outcome is investment into complex financial products, introduced by bankers who target en bloc sellers.

Several banks have sent relationship managers (RM) to condos which are sold en bloc to woo the newly-rich.

"The dumbest investment was listening to my RM to punt in dual currency," says the retiree. "She took me around the world; I did one on Aussie when it was 1.30 to one Singapore dollar, another on sterling."

One Aussie dollar was worth less than one Singapore dollar, at the end of last year.

"All lost money. She then suggested investing the Aussie dollar into Aussie bonds, and I am still trying to recover," she adds. "RMs are so smart, they see a big deposit into the account, they come calling."

Still, the retiree did enjoy herself by splurging on a brand-new luxury European car. She had previously owned a second-hand sports car.

"Some of us decided to give ang pows to the long-serving cleaner and security guards at the condo" on the day the cheques were received by the residents, she says.

One seller who's also an avid watch collector rewarded himself with a S$40,000-plus watch, among his most expensive buys ever. For others, travel has become more luxurious, as they now fly business class on long-haul flights.

The differences after a sale really are superficial rather than deep-seated changes, according to en bloc-ers.

"My life won't change, my values remain. I now have more money, but I still look at prices, if it's not a good deal, or good value, I won't buy," says the retiree. "Of course, I feel more comfortable, more confident because you have money" to back it up.

But happiness?

The watch collector rails against his neighbours for their distinctly antisocial and un-civic behaviour, dumping old furniture and all manner of debris during their moving out into the common areas, causing not just unsightly mountains of detritus but also potential safety and fire risks.

"It's digusting," he says.

A fellow resident took pictures and called the authorities, he adds, and eventually the management committee engaged cleaning professionals to clear the mess.

The sweet smell of a successful en bloc sale doesn't linger, it seems.

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