Vibe on the ground doesn’t match analyst optimism
THE reports “Pasir Panjang apartment block up for en bloc sale” (Aug 24) and “Demand fires up en bloc market” (Aug 18) appear to portray the en bloc sale market in Singapore as strong and buoyant.
But is this really the case? Both reports are based on opinions of real estate agents, who arguably have a vested interest in keeping property prices perpetually on the boil.
A few weeks ago, The Sunday Times, in a glowing report “Signs of another en bloc rush”, also reflected the optimistic views of a couple of property brokers who apparently specialise in en bloc sales. But in the same issue, its senior property writer sounded a more cautious note in the report “Selling en bloc? Big gains unlikely”.
Where I stay, the chairman and secretary on an elected collective sale committee both sold their units within six months of the committee’s formation, after they concluded that “the interest on an en bloc sale has yet to reach a level similar to our last en bloc attempt”, according to the minutes of their meeting.
Given that this was their second bite at the cherry, they must have worked extra hard to get a good offer, but failed, leaving them to look after their own interests instead.
One cannot overlook the basic fact that all these projects will need funding, and an error in judging the strength of the market could trigger off a property crisis not unlike the sub-prime crisis America faced in 2008.
The optimistic confidence that “it wouldn’t happen here” has been proved wrong on far too many occasions for us to continue to be sanguine in today’s volatile conditions.
Letter from Narayana Narayana
Source : Today – 26 Aug 2010
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