Be cash smart after disposing of your flat in en bloc sale
The recent en bloc sales of huge properties have ‘released’ many hundreds of new home buyers into the property market.
In the short term, the supply of homes will not be able to satisfy the demand.
This will create a ’shortage’ of homes and drive prices of property up.
Visit any showflat and you will find developers selling more small units and fewer medium/large ones.
This is logical because the smaller units are affordable and sellable.
Therefore, those who sell their medium-sized/large apartments in en bloc sales will now have to settle for small units unless they pay extra and buy penthouses or landed property.
For en bloc sales, only prime district and freehold land will continue to attract large premiums.
Developers are willing to offer multi-million-dollar price tags because such land commands a high selling price per unit.
If you gain less than a million dollars from the en bloc sale of your 99-year leasehold estate, it may be financially wise to consider buying a HDB flat. This way, you get to keep some cash in the bank.
Source : Straits Times - 1 Jun 2007
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