En bloc sale wave unlikely sign of rebound in market

Singapore is suddenly awash with properties up for enbloc sale.

With almost 10 estates going to market this month, analysts said this will probably be the last wave for the year.

A last splurge for developers for 2011, and possibly the last before the market cools – that’s what some owners of en bloc properties are hoping for.

Estates such as Crystal Tower in Bukit Timah and Faber Garden in upper Thomson are among nine properties put up for collective sale in October.

But, far from a resurgence, experts have dismissed any notion that the sudden rash of sales indicates a rebound in the market.

Karamjit Singh, CEO of Credo Real Estate said: “Well it’s certainly not a resurgence of overall activity… It’s probably a coincidence that we’ve had several en blocs launching or relaunching their tenders.”

In fact, higher stamp duty on sales has reduced the profit potential for some investors.

The rush has more to do with developers and owners jumping on the bandwagon during the price boom some six to nine months ago.

Ku Swee Yong, CEO of International Property Advisors said: “The recent new launches have not just achieved new high prices but also sold well at a very fast pace, so this has caused the developers to replenish their land bank… (and) frankly for freehold land, you can only replenish them through the en bloc market.”

Growth in the en bloc property market is slowing down. But experts say small and medium sized players will have their fair share of buyers. And unless the bigger properties find their unique selling point and maintain realistic expectations, chances of a successful sale will be pretty low.

Global economic uncertainty has played a big role in clouding the outlook, with credit from banks harder to come by for the residential market.

En bloc sales in the third quarter almost halved from the previous three months to S$580 million, with larger properties valued at over S$300 million meeting repeated failures.

The new crop of en bloc projects may not find buyers for another year, and with so many up for grabs, developers’ money may be thinly divided.

Source : Channel NewsAsia – 19 Oct 2011

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