Covid-19 brings already slowing en bloc market to a halt

There has been no successful collective sale of residential sites in Singapore since the Covid-19 pandemic started, bringing the en bloc market, which has been slowing down since the July 2018 cooling measures, to a halt.

Checks with property analysts showed that there have been six launches and only one deal closed in early January before the coronavirus outbreak hit Singapore’s shores.

In contrast, there were 40 en bloc launches and five deals closed in 2019, according to Lee Sze Teck, head of research at property firm Huttons Asia.

With the July 2018 cooling measures significantly increasing land costs for developers and impacting the en bloc market, analysts said the Covid-19 pandemic is the last straw that broke the camel’s back.

“The (July 2018) cooling measures killed off the (demand for en bloc sites)… Covid-19 extended cautiousness among some developers to acquire more land,” said Mr Nicholas Mak, head of research and consultancy at property agency ERA.

Analysts believe the market is likely to remain quiet at least until 2022. That is when the excess supply of about 28,000 units would be absorbed, said Mr Ismail Gafoor, chief executive officer of property agency PropNex.

Another factor that could stir life into the en bloc market would be the availability of an effective Covid-19 vaccine, said Mr Mak.

Analysts pointed out that all launches this year tended to be small projects.

Read also: Analysts don’t expect private property prices to tumble, despite fall in Q1 based on prelim data

These are:

  • Fairhaven and Sophia Ville condominiums on Sophia Road, which are going for a combined indicative price of more than S$64 million
  • Three adjoining property blocks at 2, 4 and 6 Mount Emily Road which had an asking price of S$24 million
  • Wing Fong Mansions in Geylang, which was going for S$176 million
  • Wing Fong Court in Geylang, which was on the market for S$108 million
  • Green Court in Geylang, which has a reserve price of S$28 million
  • Tivoli Lodge in Geylang, which is going for S$17.3 million

Out of these few projects, only Green Court, Fairhaven and Sophia Ville, and Tivoli Lodge are still open for sale. The rest have closed their tenders without a successful bid.

Ms Yong Choon Fah, senior director of capital markets at property consultancy JLL, who is the marketing agent for Fairhaven and Sophia Ville, said they have received “a good level of interest” from developers and fund houses.

“More than 30 parties have requested for our Information Memorandum, a few have inspected or have made arrangements to inspect the sites after the National Day holidays,” she said.

Mr Ian Loh, head of capital markets for Knight Frank Singapore and the marketing agent for Green Court, also said that they have received a lot of enquiries and are seeing interest from contractors, developers as well as co-living operators.


During the peak of the en bloc fever in the first half of 2018 before the cooling measures were imposed, there were several sites going for over S$1 billion. The most expensive en bloc site that successfully clinched a deal then was Pacific Mansion, which was sold for S$980 million.

Mr Mak described the slowdown in the en bloc market as a cyclical phenomenon.

He pointed out that the en bloc market was quiet for two years during 2014 and 2015, before it started to see more activity in 2016.

Despite the muted demand for en bloc sites this year, some analysts are saying that owners have not dropped their asking prices.

“Replacement homes are still expensive, hence the asking prices for such en bloc transactions are still at pre-Covid-19 level. However, buyers are not willing to bite because of the pandemic and recession. Hence the price expectation between buyers and sellers is widening,” said Ms Christine Li, head of research at property consultancy Cushman and Wakefield.

Mr Lee said owners typically look at whether the transaction prices of new launch units or resale units have dropped before making adjustments to their own asking prices.

Given that prices of private residential properties have decreased only by 0.7 per cent for the first half of this year, indicating that the property market is still pretty stable, owners of en bloc sites would not see the need to decrease theirs as well.

However, Mr Mak pointed out that the owners of Fairhaven have actually adjusted their asking price downwards.

While it is now being launched together with the Sophia Ville site, Ms Yong said that the asking price for Fairhaven alone is S$44.7 million.

This is lower than its S$57 million reserve price which it was going for when trying to en bloc in 2018, and closer to its S$45 million selling price when it tried to sell in 2015.

“They are realistic. However, they have a base price which they will not compromise,” said Mr Mak.

Source: Today – 16 Aug 2020

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