Prices are climbing but the number of takers is diminishing. Is the red-hot streak of successful condominium collective sales ending soon?
Developers developing a selective attitude towards en bloc sales
Following a few quarters of feverish bidding from developers for choice and sometimes massive en bloc sites last and this year, is the climate finally cooling down?
Developers are increasingly offering these collective sale sites’ asking prices instead of paying over and beyond the reserved prices. Developers may now favor smaller and more affordable sites with good locations and amenities.
Collective sales values this year are expected to exceed last year’s $8.2 billion. But the cycle may be reaching its peak soon. There are already more than 100 sites in the process of or have successfully moved ahead in their collective sale procedures.
15,000 to 20,000 new homes expected to hit the market from recent en bloc deals
Last year, developers were willing to pay 10% more than reserve prices. This year, the amount has been halved to just 5%. This shows buyers’ fatigue as pockets are slightly more wearied and land banks are fuller. Higher development charges could also be part of the reason for the slightly duller performance in the sector.
Some of the developments which were sold at asking prices included Brookvale Park and Pearl Bank Apartments. The former was sold to a Hoi Hup Realty and Sunway Developments joint venture for $530 million while the later was sold to CapitaLand for $728 million.
The government may also be adding some heat to the competition with releases planned for June under the Government Land Sales programme.