Collective sales are great, but they can also be a gamble. You can either win big or you can lose big, depending on the situation. The idea here is that you need to try and identify which is the right approach when it comes to investing in something like this.
The Singapore government does win from this, but the reality is that some collective sales did transform some property owners into winners too. So yes, there are some benefits to be had from things like this, you just have to know how to tackle all these things in a proper manner.
Moreover, the collective sales are enabling capital to be recycled back into the economy. So, even if the economy does struggle a bit at this particular time, it does bring in front some rather distinct and interesting approaches for you to enjoy. The thing to keep in mind here is that redevelopments are bringing in some changes into the situation, but it’s still an incredible opportunity to be had in here and the value as a whole is a very distinct and good one.
But that doesn’t mean there’s always some good news surrounding this. There can also be some issues too, and that’s obviously when people lose some money. For instances, for each of the current EnBloc sales, developers purchased a plot which developed more than 1000 of residential units. The Land Acquisitions Act required developer to sell all residential units within 5 years from acquiring the land. Qualifying Certificates (QC) and Additional Buyer’s Stamp Duty (ABSD) charges could be imposed on developers if they fail to sell their units within the time frame.
For investors who bought an old Singapore condo which was going for Enbloc Sales, they could have earn a considerably good profit if they bought the unit at a low price and the collective sales eventually did went through. However, they might have to come up with the Seller’s Stamp Duty (SSD), and this amount can be as high as 16% of the selling price (if they bought their properties few months prior to selling the condo and purchase date is before 11 Mar 2017). This could lead to some cash flow issue for sellers.
Nine more sites that are worth around 1.85 billion are set to close in the next few months, so around 500+ owners can get displaced. Yes, one could end up with some losses, but one can also win. So, there’s a win and loss situation here, but there are some benefits to be had from everything in the end. It’s just up to one to make sure that he or she invest correctly. Collective sales can be the holy grail, but they can also end up being a bust. So, as long as the investor make the right choice, results can indeed shine. Invest smarter and avoid issues that will end up diminishing the overall value.
Source : http://www.straitstimes.com/business/property/winners-and-losers-amid-the-frenzy
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