In all consideration, 2022 was a pretty good year for en bloc sales. Even when there are signs of a global recession looming, properties such as Loyang Valley, Meyer Park, and Oxley Garden continue to be put up for collective sale.
As of July 2022, there were 12 successful en bloc sales valued at $3.5 billion, despite the Government raising the ABSD rate to 35% for entities, with an additional 5% non-remittable ABSD for developers in December 2021.
Can we expect more en bloc sales to occur in 2023? Let’s find out.
En Bloc Sales from 2017 to 2022
Before we dive in, let’s take a look at how en bloc sales performed from 2017 to 2022.
2017 and 2018 were good years for en bloc sales, with more than 60 projects for collective sale in a sudden spike from previous years. In total, there was a total sale of $18.9 billion. The 2016 to 2018 en bloc cycle totalled 65 deals worth $19.1 billion and came close to beating the high of $21.8 billion achieved in the record-breaking 2005 to 2007 cycle.
While the en bloc frenzy slowed down in 2019 following property cooling measures in 2018, which raised Additional Buyer’s Stamp Duty (ABSD) for property developers from 15% to 30%, en bloc sales are still pretty healthy.
In 2021, there were 11 successful en bloc sites, with a total collective sale valued at $2.2 billion. In comparison, 2020 and 2019 saw many properties entering the failed en bloc list, with only 10 successful en bloc sales recorded.
In 2022, there was some expectation that we may see an increase in collective sales as developers looked to replenish their land bank. The PropertyGuru Singapore Property Market Report Q2 2022 also predicted developers favouring smaller- to medium-sized en bloc launches. So the question remains…
Will There Be More Enbloc Sales in 2023?
While the en bloc market seems to be doing well, economists point out potential recession risks for consumers and developers in the coming year.
Dr. Tan Tee Khoon, Country Manager – Singapore, PropertyGuru, concurs, adding how the comparatively higher ABSD rates (brought on by the December 2021 property cooling measures), rising interest rates and construction costs, and increased land betterment charge rates are also factors to take into consideration. Local buying demand may chill in view of increasing mortgage loan rates affecting affordability and borrowing.
"As a risk aversion strategy, land-strapped developers would prefer smaller- to medium-sized collective sales sites. Unlike the 2018 en bloc cycle where developers had a stronger need to replenish their land banks, there are more challenges in the current cycle, especially with the recent spate of cooling measures."
Some developers may be encouraged to revisit sites that have been unsuccessful thus far at securing an en bloc deal in 2023. Many of these failed en bloc sale sites have actually cut their asking prices in their second and subsequent collective sales attempts, making it even more attractive for developers.
The Collective Sale Committee can also list the property for sale once more but only after a 12-month interval.
Past Failed En Bloc Sale List: Did These 73 Sites Manage to Sell?
Here are some sites that owners have previously tried to put up for an en bloc acquisition. We’ve also included whether or not they have been sold successfully after the price has been adjusted, and their current status.
Note: Due to the nature of en bloc/collective sales, these properties may be put up on the market more than once. This list is not exhaustive. Should there be a development that we have missed, do let us know.
Did you know: HDB flats may also go on collective sale? Read about the HDB Selective En Bloc Redevelopment Scheme (SERS) here.
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