En-bloc fever appears to be receding: Khaw

The days of en-bloc fever appear to be in the past, with new data released by the National Development Minister suggesting that such activity has slowed in recent years.

In his latest blog post, Mr Khaw Boon Wan revealed that some 1,400 private housing units were sold through en-bloc activities in 2011.

He said this number is low compared to the peak in 2007, when 5,862 units were sold.

Mr Khaw said it looks like the en-bloc fever is receding, and if so, signals the increasing stabilisation of Singapore’s property market.

This will be a good development for Singapore in the Year of the Dragon, he added.

Mr Khaw said en-bloc activities reached “feverish heights” in 2006 and 2007, when a total of 10,200 units were sold for redevelopment.

He said this added stress to an already-hot property market, as housing units were removed from the market.

He noted that displaced owners or tenants had to look for replacement properties to live and invest in, pushing up property and rental prices.

Mr Khaw said en-bloc has its pluses and minuses.

It can rejuvenate the city by removing old and dilapidated buildings, and enables owners to trade their units at a premium price if sold collectively.

But he cautioned that if en-bloc is done excessively, en-bloc activities can waste resources, if relatively new buildings are prematurely demolished.

Property watcher Nicholas Mak agrees that the en-bloc market has been relatively quiet in the past two years.

He said one reason is a slowdown in the sale of high-end developments, which are typically built on freehold land acquired through en-bloc activities.

It’s also due to what the government has been doing.

Mak said: “The government has been aggressively pushing out a lot of mass market land, and developers are turning their attention to such land sales. And since a lot of the housing demand are in the suburban region, developers are actually earning fairly decent profits through some of these suburban condominiums. Land sales in the suburban region has actually taken away some of the developers’ demand for land from the en-bloc sale market.”

Source : Channel NewsAsia – 21 Jan 2012

Join The Discussion

Compare listings