Eyes are on the collective sales market this year as 2017 had proved to be a fruitful one.
En bloc sales likely to continue but not for long
The large number of land sites up for sale last year have whetted developers’ appetites. But their appetites have since been satisfied and the successful run may be headed for some roadblocks as developers’ land banks fill up.
Out of the 6 collective sale sites whose public tender closed last month, only 3 were successful. That does not however mean that the other 3 will not eventually be sold. Within 10 weeks of the close of the public tender, owners of a development are allowed to enter into a private treaty contact with a buyer.
Analysts expect developers to be increasingly picky with their bids. Developers may favour smaller sites with some sites still managing to attain en bloc success at least for the next 6 to 9 months.
Some external factors may keep property prices in check
There are however high hopes that the resale and new property markets will make a significant rebound. The property market has already achieved a soft landing after the implementation of many cooling measures.
The 11.6% fall in property prices across 15 consecutive quarters means the market is currently at its trough and the numbers can really only move upwards this year.
Some factors will keep the price-rise in check. Factor such as increasing interest rates, a spotty economic performance, and low-income growth. The duration of the upcycle may be dependant on how the market reacts this year. A 5% increase in prices could mean the uptrend is going for a long, leisurely run.
All the way to 2020. A sudden burst of energy in the market with a spike of 17% or more would, however, mean a shorter lifespan for the upcycle.