Although one collective sale bid is expected to launch by this week, most of the rest are paused due to surprising cooling measures of residential properties in Singapore.
In a recent interview, the marketing agents revealed that several factors are going to play an essential role in the upcoming collective sale attempts and the most important ones are price expectations of homeowners, location as well as the size of the site to be sold. Note that, Government has made an announcement recently on 5th July regarding cooling measures for local property market so that price changes can be aligned with the economic fundamentals.
Except for paying for the purchase price of the properties to homebuyers, developers also need to include 5% Additional Buyer’s Stamp Duty on the purchase of en bloc properties that are subjected to modification and development in future. At the same time, residential developers are also going to face the boost in Additional Buyer’s Stamp Duty, as it will be increased from 15% to 25%. Note that this additional duty can be waived only if all units in the new launch condos / apartments are sold within 5 years, counted right from the site acquiring date.
Some analysis described these measures as “heavy handed” and believe that it will dampen the collective sales market as it is going to raise the land acquisition cost and as a result, developers will face a reduction in tender bids. Hike in ABSD rates along with loan to value tightening may also hit the buying demand by the great extent in the near future. It means investors that are planning to invest on en bloc bandwagon need to make more analysis.
It is believed that land sizes that are smaller will appeal more to developers. By building smaller developments, the likelihood of selling all the units within 5 years is definitely much higher compared to working on mega developments. However developer might still considering giving bigger sites a go if they are located at prime locations and are reasonably priced. Presently, Huttons Asia is handling two major sites that are believed to provide 80% consent level. The first one is Kensington Park Condominium at Serangoon Gardens with an expected price range of $1.05 billion where the company has secured 70%. On the other side, Pine Grove site at Pandan Valley area is believed to convince around 76% homeowners.
While some remain hopeful about the collective sales, there are also estate market analyst who believes that implements of the higher stamp duties might cause the En Bloc game to stop for a sometime while developers clear the inventories in their landbank.
The Singapore Condominium developments below had their previews on the night before the new cooling measure kick in.