Gillman Heights en bloc offers a classic example of purportedly “selling high and buying low”. It also summarily debunked myths of “en bloc windfall” and “monetization of asset at a premium”! If “WINDFALL” and “PREMIUM” are defined along the lines of how “SEX” is defined by former President Bill Clinton in the Monica Lewinsky saga, then I am chokingly gagged!
Carrot or lemon? You figure it out ...
Gillman Heights timeline:
18 Feb 2006 – First signatory of Collective Sale Agreement based on the Reserve Price set [property market was on the upturn].
23 Jun 2006 – Last signatory of Collective Sale Agreement (having crossed the tipping point of 80% majority consent).
5 Feb 2007 – Sold en bloc at $548mn (even slightly ABOVE Reserve Price) to Developer-buyer under Sale and Purchase Agreement [property market was nearing peak – using one Minority Dissenter’s pay-out figures, she would be getting $498 psf from en bloc pay-out].
3 May 2007 – Designated representatives applied to Strata Titles Board for collective sale order [property market at peak – the same Minority Dissenter checked the asking price of a 5-room HDB flat in Mei Ling Street - $746 psf (exceeding en bloc pay-out by $248 psf after DOWNGRADING from privatized condo to public housing)].
21 Dec 2007 – A few days before Christmas, Strata Titles Board ruled against Minority Dissenters [property market started softening].
25 Jun 2008 – High Court ruled against Minority Dissenters [property market slump].
9 Feb 2009 – On Yuan Xiao Jie, Appellate Court ruled against Minority Dissenters [property market depressed – the same Minority Dissenter checked the asking price of a 5-room HDB flat in Bukit Merah - $600 psf (exceeding en bloc pay-out by $102 psf after DOWNGRADING from privatized condo to public housing)]. http://singaporeenbloc.blogspot.com/2009/02/purpose-of-purposive.html
* May/Jun 2009 – Likely legal completion and pay-out of the bulk of en bloc sale proceeds.
Nov/Dec 2009 – Likely vacant possession date and pay-out of the remainder of en bloc sale proceeds.
* If all goes according to plan in Gillman Heights case, it would take about 3¼ years from the point of decision to sell en bloc to the point of collection of $$$ to buy another place by DOWNGRADING or DOWNSIZING! At Gillman Heights’ $498 psf en bloc pay-out, equivalent replacement of private condo in the neighbourhood vicinity is IMPOSSIBLE even after the property market crash! Business Times of 11 Feb 2009 quoted property analysts’ opinions that even in the current market slump for “condos in OUTLYING areas near MRT stations, the price resistance for a new launch in today's market would probably be in the $600-650 psf range on average. Another analyst puts a price resistance in a higher band of $750-$850 psf for condos in MATURE HDB ESTATES such as Toa Payoh and Ang Mo Kio”.
As shown above, even a 5-room HDB public housing flat ($746 in Mei Ling Street at market peak and $600 in Bukit Merah in market doldrums) is priced HIGHER than Gillman Heights’ privatized condo en bloc pay-out of $498 on a normalized psf basis. Whatever hype is made out of “en bloc windfall” and “asset monetization premium”, the effects of morphing into a Squatter, Refugee, Downgrader or Downsizer under the present en bloc framework are painfully real – even with the present-day bursting of the real estate bubble. Should you be dragged into this “Game of Timing the Market” because 80% of your neighbours decided to sell your home for you???
It is a free country (relatively speaking)! If you want to time the property market, kindly do it on your own account with your own home – NOT on a collective basis with other people's homes! And if you can reap a huge windfall by trading on your own account, that’s great. I’d be most happy for you because I am not a “lesser mortal” and won’t begrudge your wealth deservingly blown on a Cordon Bleu cooking class in Paris (particularly since it is NOT some ill-gotten en bloc gain at other people's expense)! Gahmen would also thank you for the stamp duty on each flip that you do – the more, the merrier, man! But it becomes nutty for our laws to facilitate collective flipping! Are we a nation of flippin’ flippers playing this "Game of Timing the Market" without an investment time horizon of 30 years (exemplary example: GIC/Temasek benchmark)???