But property consultants say total deals are still likely to hit $16 billion – double that of last year – due to an exceptionally active first half.
A combination of factors – including uncertainties in the financial markets prompted by the US sub-prime crisis and the government’s move to raise development charge rates – could have dampened developers’ appetite for more land.
Karamjit Singh, MD of Credo Real Estate says: “Over the last one month or so, things have turned somewhat cautious. There were a lot of discussions about whether the government could cool the market and how they would implement measures.
“Developers have also bought quite a bit of sites in the first half of this year. Some of them are telling us that they have bought more than they ever intended for the entire year, so they will need to slow purchases until some of their new projects get off-loaded.”
Other developments include an impending change in en bloc laws that could make it tougher to conclude a deal, and a growing legal spat between buyers and sellers of Horizon Towers.
Property consultants say owners may now need to temper their expectations in terms of asking prices.
“I would think that most of the en bloc sales will not reach the prices that the owners want to sell at. Horizon Towers was in a situation where, when the deal was signed, the market spiked up a lot. But in today’s situation, are we going to expect another hike in the market at that kind of rate? That’s questionable,” says Dennis Yeo, MD of Colliers International.
But for homeowners who are worried that they may have missed the boat for en bloc sales, analysts say there could still be a silver lining.
“What may also happen on the flipside is that some en bloc sellers’ expectations may turn more realistic. Prices may drop a bit, thereby motivating some developers waiting by the wings to take the bite,” says Credo Real Estate’s MD.
There were over $11 billion worth of en bloc deals in the first six months of this year, with many projects setting new record prices. – CNA /ls
Source : Channel NewsAsia – 18 Aug 2007