ST Letter : No benefit from collective sales

20 Feb 2011,
No benefit from collective sales

I refer to the special report on the experiences of former Gillman Heights residents ('For better or for worse'; Feb6).

The five residents interviewed have all suffered financial or emotional losses from the collective sale of their homes.

As a resident from a condominium unit about to vote on such a sale, I too have been told by the agents trying to sell my condo that I will have to downgrade from my 1,700 sq ft apartment to a 1,300sq ft one if I wish to buy a new property.

My current apartment has three bedrooms plus a maid's room. I will have to downsize to a two-bedroom unit (with no maid's room) or buy an HDB flat - and still be out of pocket after the sale. If I wish to buy a new apartment in the area, I will have to pay about $1million more than what I am selling for.

Whom does a collective sale benefit? Would it not be better to upgrade our existing apartments (I am told it would be about $30,000 per resident) rather than move?

The economics simply do not make sense - and many residents realise this only too late.

If a collective sale pays 30per cent above the market rate, which is the current rule of thumb for developers, it would be better to be prudent and hold off the sale, or face a loss.

In fact, I have friends from Gillman Heights who were out of pocket by more than half a million dollars when they had to move to a similar location. The market continued to move up in the two years before they got their money - as is the case for practically every collective sale I know of.

Harry Tham