Collective sales to rise through 2018 into 2019: Colliers International
The number of residential collective sales is set to continue rising through 2018, and the trend is likely to last into 2019, says Colliers International in a recent report.
Excluding Changi Garden, which was bought after the report was produced, the current collective sale wave — which began in late 2016 with the sale of Shunfu Ville, Harbour View Gardens and Raintree Gardens and continued this year with 14 more collective sales year-to-date — has netted $6.36 billion in sales.
According to research by Colliers, a surge in collective sale transactions in the residential market typically goes on for eight to 12 quarters. The last collective sale fever lasted for about three years, from 2005 to 2007, with sales totalling $21.8 billion.
Source: Huttons Asia
Tampines Court, sold to Sim Lian Development for $970 mil, making it the largest collective sale in terms of absolute price in 2017
Tang Wei Leng, managing director of Colliers International, Singapore, comments: “With the more aggressive land prices achieved in the mass markets, we expect more prime freehold plots to come on the market.”
Despite the surge, Colliers believes that the risk of oversupply is low. Given that the 2006 to 2016 annual average demand for residential units stood at 12,453, the 14,000 units that could be generated from the collective sales so far could be absorbed in slightly more than a year.
Moreover, developers’ pacing of launches over time as well as across different market segments and locations will keep the oversupply risk low, says Colliers.
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