Almost a month ago, some cooling measures were taken to bring down property prices. Ever since, only less than a third of the sale sites have been sold. According to a property analyst, this indicates that the en bloc enthusiasm is over among buyers.
Huttons Asia, Colliers, and Savills are three real estate agencies that reported the lack of sales. There are 30 sale sites among these three agencies combined that have failed to be sold since January of this year.
Ku Swee Yong, an International Property Advisor chief executive also believes that the cycle of en bloc sales is coming to an end. If these predictions are true, it will prove this two year cycle to be shorter than the previous three year one that lasted from 2005 to 2007.
The start of this cycle is marked by the sale of what was previously known as the Housing and Urban Development Companion (HUDC) estate Shunfu Ville.
On the contrary, some analysts still believe there is a shining light at the end of the tunnel. These optimistic people have high hopes that this cycle still has a few more sales left before it can be officially labeled as over. These analysts have their hopes over the fact that some developers are still in search of some sites. However, these developers require a few months of research and investigation before making a final decision.
As per statistics, every month of this year, there have been successful en bloc tenders. Even on the day when cooling measures were announced by the government, there were six successful deals totaling worth $1 billion.
However, things started going downhill after that. Since July 5, around 10 en bloc tenders have been closed without any success at all. Among these unsuccessful projects are large projects such as Spanish Village and Elizabeth Towers. The smaller projects that failed to bag a successful deal include Geylang’s Blossom Mansions as well as Jansen Mansion that is located near Kovan MRT.
Surprisingly, smaller projects seem to have better luck than larger projects in terms of attracting buyers. The reason being the 25% Additional Buyers’ Stamp Duty (ABSD). This percentage was previously 15%. Another 5% non-remissible ABSD has been implemented which increases the land purchasing cost for developers.
Ms. Suzie Mok is the senior director of investment sales at Savills. She says that during the second quarter of the year, a lot of sales were made below the asking price. One of such projects is Dunearn Gardens which was sold for $468 million whereas the asking price was $489 million.
The City Development chief executive, Sherman Kwek, also told the same thing. Many developers have had to sale their properties at 10% to 15% lower rates than what they were worth. This is why Mr. Kwek suggests en bloc sellers to lower their prices too. The near future is expected to be no different.
Developers as well as homeowners are expected to show interest in en bloc. The future is keenly being looked forward to.
You can find more details from the link below,