En bloc market to be subdued due to new cooling measures

The outlook for the en bloc market has become bleak in the aftermath of the latest round of cooling measures, according to experts.

“I think these measures caught everyone by surprise. For en bloc developers, the first couple of months will show more subdued dealing of land parcels. If developers are not confident to sell, they will not bid aggressively,” said Ian Loh, Head of Investment at Knight Frank Singapore.

With authorities focusing on the needs of first-time home buyers with restrictions such as the additional buyer’s stamp duty (ABSD) on investment properties, interest for second and third properties instantly queues off, noted Loh.

However, he reckons developers will consider en bloc sites “if everything is priced right” as such sites are one of the only sources of freehold land.

“We will also have to see if the upcoming scheduled budget has got anything optimistic for developers, with regards to lower manpower and construction costs. This may have certain effects as well on the outlook for en bloc sales in the coming year, since we cannot project an optimistic forward-looking outlook on sales volumes,” said Loh.

Experts feel that it will be difficult to see any record en bloc selling prices this year, with larger projects being ruled out and any activity likely to be dominated by smaller sites below S$200 million each, which would continue the trend of the past two years.

So far, two en bloc properties have been launched in 2013 and this was before the measures were announced last Friday.

Kismis Lodge off Toh Tuck Road was launched at a price tag of S$90 million while Villa Des Flores in prime District 11 is up for sale again for the third time since its initial launch in June last year.

Source : PropetyGuru – 17 Jan 2013

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