New enbloc phase starting soon? Signs point in that direction

The early warning indicators that a new enbloc phase is starting soon are emerging in the property market.

new enbloc phase

The property cooling measures introduced by the Government a few years ago, rapidly cooled the en-bloc sales market. Analysts were proclaiming that the collective sales market was decimated.

The property cooling measures – higher additional buyer’s stamp duty (ABSD) and lower loan-to-value (LTV) limit – took the market by surprise even as trends suggested that the private residential market is finding its own equilibrium. The en-bloc sales market collapse was amplified by developers being less active in the collective sale market, while new homes sales at some recent launches stagnated.

The introduction of these property cooling actions kicked into effect barely one year after market recovery – after four years of decline. It was aimed at calming the euphoria in the private residential sector.

Home prices had risen by 3.4 per cent in Q1 2018, and another 3.4 per cent in Q2 of 2018. The price growth – which was tapered in Q3 of 2018 – was largely driven by the brighter economic outlook, pent-up housing demand and more positive market sentiment.

Although we are just coming out of a pandemic, the enbloc fever seems to be coming back. An this is because developers have been doing very well the last few years by selling off a lot of new launches and now there is a low volume of new launches available in the market.

Each time sypply of new launches decreases, a new enbloc phase starts.

This is because developers have to generate constant return to their shareholders, and to do so, they MUST have products to sell. Without land supply, they won’t have any product to sell. Can you imagine having an empty retail shop? For majority of businesses, that will be disastrous. Developers have to therefore bid for private land and this gives start to a new enbloc phase.

More than ten years ago, a number of en bloc sales were called off because the developers were weak and could not raise sufficient capital and loans to complete the transactions. This proved disappointing for some subsidiary proprietors (SP) as they had committed to purchasing their next homes before the en-bloc sales were aborted.

Mr Paul Ho, chief officer at iCompareLoan, said: “What happened then is unlikely to be repeated this time around as most developers have built up a huge war chest of capital over the past few years. But still, SP and strata apartment unit owners should get involved and understand the deal that is being put together. A new enbloc phase starting is possibly due to inflation and rising property prices.”


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As an SP, you should always keep track of all the milestones leading to the conclusion of your en bloc sales-  milestones like when your Sales Committee (SC) was formed, Extra-Ordinary General Meetings, Updates from SC, etc. Most importantly don’t rely on any knowledge or information you may have gleaned from your en bloc experience in the past.

The en bloc regulations have been more firmly tightened, and the process strictly regulated in the past few years.  The tighter laws we now have means the responsibilities of the SC, the property consultants, and the lawyers, are all well defined, which provides for better transparency of the en bloc processes.


Don’t think that just because a qualified developer has made a bid at or above the reserve price, and just because the SC has agreed to accept the bid on behalf of the SP, the transaction is considered done. Some SP may still raise objection to the en bloc sales and if they do, the Strata Title Board (STB) is obliged to hear their case. The entire en bloc transaction can be stopped from proceeding further if the dissenters can prove that the SC  did not abide by correct procedures.


Once the STB gives the stamp of approval for the en-bloc sales, the winning developer will have to give you at least 6 months for you to move out of your property. The funds from the en bloc sales would also have been transferred to you by this time, but a significant portion of your proceeds will go towards offsetting any existing loans you may have with the bank, as well as any CPF funds used for purchase of your previous unit. The 6-month period may be sufficient time for most SP to arrange sufficient finances to find another suitable home.


As the new enbloc phase starts, and whether you are considering to rent or to downgrade to a smaller apartment, consider all options carefully.

Illustration: Here is how En bloc can lose you money

  • Bought a property (Completion) for $1m in 01 June 2017 to stay near parents.
  • Renovation spent $100,000 01 July 2017
  • The Enbloc deal for $1,300,000 is signed on 01 Sep 2017.
  • Seller Stamp Duty (SSD) is payable around 15 Sep 2017. Seller stamp Duty (SSD) of 12% = $156,000.
  • Date of actual completion of the deal is estimated to be 30 Aug 2018.
  • Sales proceeds of balance of $1,300,000 for the property to be received around 30th Aug 2018.

While you wait for your en bloc completion, another property that you were planning to buy at $1,000,000 rose to $1,100,000 in 30 Aug 2021. This means you have to pay an extra $100,000 due to this wait.


En-bloc Sale Price                                             =          $1,300,000

Bought Price                                                      =          $1,000,000

Gross Profit                                                 =         $   300,000

Costs involved

Seller Stamp Duty @ 12%                         =          $ 156,000

Renovation Cost                                          =          $ 100,000

Waiting cost to buy new Condo                =          $ 100,000

Other moving costs, time and effort         =          $   20,000

Penalty on Home Loan 1.5%                    =          $   15,000

Loss interest on SSD @ 4%                     =          $     6,240

Total Costs                                                   =          $ 397,240

LOSS                                                             =          $   97,240

As a result of En bloc your potential joy turned into nightmare. Instead of making $300,000 profit, you ended up losing $91,000 and ended up having to move house again. The lifestyle disruption is huge.

Remember that everybody’s needs and comfort-levels are different. Just because one housing option works for someone, it doesn’t mean that the same option will work for you and your family. As soon as you are sure that your en-bloc sales will conclude without any hassle,  you should be speaking to a trusted property advisor. The advisor would be best placed to guide you through your next housing option.

Mr Ho said, “En bloc sales process takes easily 18 to 40 months to complete, and in a rising market, the prices of properties could easily have risen by 5 to 10% a year, rendering the premium obtained from en bloc not worth it.”

Written by Ravi Chandran

Corporate Tax Singapore

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