Ravi Chandran
Sophia View has broken a more than six-month silence in the residential en bloc sale market by recording a sale to a private investor. The sole marketing agent for the en bloc sale of Sophia View, Singapore Realtors Inc (SRI), refused to divulge the selling price of the small, five-unit development.
Sophia View which was sold in June, will yield the owner of each unit will get about $2 million.
Table of Contents
Located at 108 Sophia Road, Sophia View is nestled on a site zoned residential with a plot ratio of 2.1. With just 5 mins to Wilkie Edge and St Margaret’s Primary, with close proximity to Plaza Singapura, Sophia View is located within Orchard shopping belt and yet away from the hustle and bustle of the city. It is also within close proximity to food, shopping and Entertainment like Wild Rocket @ Mount Emily, Timbre @ Old School, Peace Centre, Cathay and Cold Storage. Schools nearby consists of NAFA, St Margaret’s Primary School, Chatsworth International School, and Wealth Management Institute.
According to SRI, the buyer is buying the property in his own name and is “keeping his options open”, to evaluate later is he should redevelop the site or apply for change of use. SRI’s co-founder and managing director, Bruce Lye, said, “essentially for this investor, he sees the potential upside of the area and value of the land and is taking a long-term view of the market.”
Several residential properties have been relaunched this year for collective sale, but the market has been relatively silent. The Business Times quoted Cushman & Wakefield’s head of research for South-east Asia Christine Li, as saying that the last such transactions in the market were that of Phoenix Heights, sold in August 2018 to an associate of OKP Holdings – and Waterloo Apartments, sold for S$131.1 million in November to Fragrance Group.
Mr Paul Ho, chief mortgage officer of iCompareLoan, commenting on Sophia View scoring the first en bloc sale of 2019, said: “the en bloc sale market is hit by the property cooling measures which the government introduced last year. Besides this, the once vibrant market is also silenced by the release of several sites under the Government Land Sales programme.”
He added, “Developers prefer to buy land from the Government Land Sales Programme rather than bidding for collective sales sites.”
“Being a small development, Sophia View could have been sold to the private buyer for less than $20 million. As the price is on the low side, risks will also be manageable by the buyer,” said Mr Ho.
En Bloc Sales Process Singapore – A Definitive Step-by-step Guide
Any en bloc sale should be concluded with minimal delay and maximum benefit to the owners. Collective sale process takes 20 to 30 months to complete and during this time, the owners typically do not have sufficient funds for down-payment and their CPF OA funds are tied up in the property, hence they cannot buy a new condominium early.
By the time the transaction is completed in 20 to 30 months later, the property prices would have already moved up 10 to 20 per cent. This is already evidenced by sellers of older estate asking higher prices. Hence if the process takes 20 months to 30 months, owners may need to consider the cost of a replacement unit by that time, else they may want to hold up a higher selling price.
One way is to conduct a Collective Sales Agreement (CSA) as well as concurrently collect a “Non Collective Sales Agreement (NCSA)”, so that once a NCSA reaches 20%, the collective sale process is called off. There is really no point to drag on.
The rules are quite onerous and stringent and is governed by the Land Titles (Strata) Act – section 84A. Over the years, additions and amendments by the Ministry of Law to the en bloc law have made the collective sale rules even tighter.
https://www.icompareloan.com/resources/good-property-agents-qualities-look-find/
Mr Ho said that many of the home owners who refinanced their home loans to fixed rate home loans or those with 2 years locked-in or 3 years locked-in period will incur full home loan redemption penalty. This penalty is usually 1.5% of the loan amount. This tends to affect those who have bought their properties in recent years as their loan size tends to be bigger and their corresponding home loan redemption penalty higher.
Mr Ho suggested that if one’s home is at risk of en bloc, the owner could consider a home loan where there is no locked-in penalty, but instead entails a higher housing interest rate cost. The next best option is to look for packages with a waiver of locked-in penalty due to sale of property. Such owners may contact a mortgage broker to assist them to find such packages with waiver of locked-in penalty.
How to Secure a Home Loan Quickly
Are you planning to invest in properties in the District 9 but ensure of funds availability for purchase? Don’t worry because iCompareLoan mortgage broker can set you up on a path that can get you a home loan in a quick and seamless manner.
Our brokers have close links with the best lenders in town and can help you compare Singapore home loans and settle for a package that best suits your home purchase needs. Find out money saving tips here.
Whether you are looking for a new home loan or to refinance, the Mortgage broker can help you get everything right from calculating mortgage repayment, comparing interest rates all through to securing the best home loans in Singapore. And the good thing is that all our services are free of charge. So it’s all worth it to secure a loan through us.
For advice on a new home loan.
For refinancing advice.
