Cost of Replacement Property for resident owners...




How do you get $1.2 billion?

Step 1:  What is an equal replacement in the area for your family/ investment?

E.g. Skyline/ The Peak
  •      Freehold
  •      Telok Blangah/ Alexandra area
  •      Their Current Sale Price is  $1,700 - $1,900 per sq ft

=   $3.4 - $3.8 million to buy 2000 sq ft TODAY
=   $3.8 - $4.2 million to buy 2000 sq ft in 2 year’s time1
+                                                          +     pay Seller’s Stamp Duty:                            up to 16%2 for selling Teresa Ville
+                                                          +    pay Buyer’s Stamp Duty:                             3%             for buying replacement
+                                                          +     pay Additional Buyer’s Stamp Duty:          7%3            for buying replacement

=   $4.2 - $5.3 million to buy 2000 sq ft in 2 years time

Which means a Reserve Price of $1.09 - $1.37 billion for En Bloc (1,035 shares)

Step 2:  Want to make some profit on the En Bloc? 5%?
Which means Reserve Price of $1.1 - $1.4 billion for En Bloc

Step 3:  Pay cash downpayment of 30% - 50%4 for your replacement property 
Which means pay  $1.2 - $2.6 million cash in 0-2 year’s time (or even more if you are older than 655!)

1  Assuming 5% average annual increase in property prices from now to 2030, Morgan Stanley forecast: https://www.cnbc.com/amp/2017/04/13/singapores-property-prices-to-double-by-2030-morgan-stanley.html
2  Depending on when it was bought, residential property could be subject to stamp duty of up to 16% upon selling. See www.iras.gov.sg for details.
3  7% for buying second property (or buying another property before Teresaville has sold). See www.iras.gov.sg for details.
4  30% downpayment on first property (bought after sale of Teresaville), or 50% downpayment for a second property (or a second property bought before Teresaville has sold). See www.iras.gov.sg for details.

PS:  
·  Don't forget renovation & furnishing cost in new home. Enbloc deal must provide additional cash profit to take care of this,which may be quite substantial > $100K+ ??
·  Please see “ Valuing Teresa Ville” article posted by a fellow SP in the blog http://www.tereasavilleowners.com, to understand difference between 2000Sq Ft area of Teresa Ville v/s same area claimed by new developments. That makes cost of actual living area of new apartments even more . Think …

Comments

  1. AnonymousAugust 28, 2017 at 2:58 AM

    Is there even an indication of a reserve price?

    ReplyDelete
  2. AnonymousAugust 29, 2017 at 7:32 AM

    Sales committee is not keeping the SPs informed of the indications they might be getting from prospective property agents.. It better be $1.2B or above as this blog suggests, only then it shall make sense for owners who live in Teresa Ville...

    ReplyDelete
  3. AnonymousAugust 29, 2017 at 7:43 AM

    Any one knows if Chairman and Secretary of Collective Sales Committee are resident owners ? If not, wonder if they shall consider aspiration of resident owners while evaluating offers of sales price ...

    ReplyDelete
  4. AnonymousAugust 29, 2017 at 6:32 PM

    Only because I don't keep up to date with the documents, maybe we can consider uploading the EGM papers and resolutions etc onto this website. Helps to disseminate information for owners who didn't attend or could not find time to attend the EGMs. Will help keep all of us informed.

    ReplyDelete

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