Need for realistic expectations amid expected hike in en bloc sales

Sales of new private homes in Singapore, including EC units, almost doubled to 2,086 units in July from 1,064 units in the previous month...

The limited supply of land sites has resulted in more developers going after projects put up for collective sale.

While the residential collective sales market is expected to pick up this year, experts have called on owners of residential developments to be realistic with their expectations, reported Channel NewsAsia.

The expected rise in en bloc sales is boosted by the strong demand for land by developers and the limited supply of residential sites at state tenders.

“What we are seeing right now is a situation where many developers are going after sites, but at the same time they are also blighted with the problem of moving the sales at a higher price,” explained Tan Hong Boon, Regional Director, Capital Markets at JLL Singapore.

“They need sites but they’re not going to pay exuberant prices … I think for en bloc sales to go successfully, owners’ expectations have to be realistic so as to meet bidders’ capability to pay for the site.”

In fact, only five of the 25 sites launched for collective sale from 2014 to 2016 were successful.

“Out of the 20 sites that failed, I would say that they failed because of too high an asking price in going to the market,” said Tan.

For this year, at least 21 residential projects are expected to go en bloc, based on data from JLL Singapore.

These include Amber Park condominium, which is in the process of signing its en bloc sale agreement following various failed attempts, as well as Eunosville. The former Housing and Urban Development Company (HUDC) estate has secured majority approval from its residents to proceed with the sale.

The figure also included 12 collective sale hopefuls, or those in the process of forming collective sales committees, such as The Balmoral and Lakeside Tower condominiums.

 

Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg