Responding to a parliamentary question on whether the Government is concerned with the spate of en bloc sales recently, Minister for National Development Lawrence Wong gave the assurance that safeguards are in place for en bloc sales.
En bloc laws have been faulted for giving Majority owners the right to sell away their property without the signature of the Minority owners and force them to be a party to Collective Sales Agreement against their will.
“The main objective of the collective sales framework is to give owners the choice on whether to go for redevelopment. Such redevelopment allows rejuvenation and land use optimisation in residential developments,” said Mr Wong.
“The Land Titles (Strata) Act requires buildings less than 10 years old to obtain 90 per cent consent from owners before allowing the collective sale to go through, compared to 80 per cent for older developments,” the Minister added, explaining how the collective sales framework imposes higher consent thresholds for newer developments.
Mr Wong said that of the 40 developments sold en bloc in the past three years, 13 were less than 30 years old at the point of sale. Most of developments were more than 20 years old at the point of sale, and were small developments of fewer than 20 units each. In terms of the number of housing units, only about 6 per cent or 240 units of the approximately 4,000 units sold were less than 30 years old.
Including the en bloc of Amber Park (which was one of the biggest en bloc award of S$906.7 million), more than S$8.7 billion worth of en bloc tenders were awarded last year.
Whether en bloc is good or bad is dependent on Singapore’s land policies. Consider this – when we own pricier properties, we will have to pay more property tax. We will have to take longer to pay off the housing loan and in the process, pay more interests to the bank.
Most Singaporeans are asset rich. As the price of our properties increase, we may sell it for huge profits. But one thing you would have to consider is, where would you stay after your property is sold. Would you need to buy an even more expensive property after your current one is sold?
The alternative would be if our property price did not appreciate and we all pay less property tax and other incidental costs.