Collective sales activity resumed at the beginning of the year, with six deals closed to date, said top officials from Credo Real Estate.
While smaller sites will stay popular because of their low absolute values, the mid-prime segment of the residential market appears more promising this year, said Senior Manager (Investment Sales) Chia Mein Mein, Executive Director (Head of Research and Consultancy) Ong Teck Hui, and Managing Director Karamjit Singh.
Property developers could be more interested in the mid-prime segment, as the value of prime sites remains less affordable than mid-prime sites and the suburban market is adequately supplied through government land sales, they said.
The performance of the en bloc sale market this year will depend on many factors, such as the government’s cooling measures announced last year and on 13 January, which prompted developers to become more cautious in making residential land purchases.
While aggregate sales this year will exceed last year’s tally of S$1.7 billion, it will not come close to the S$11.4 billion in 2007, said Credo.
The residential collective sales market recovered in 2010 with more than 34 sales. This was in sharp contrast to the previous year, when only one deal was seen.
Considering the healthy collective sales activity in 2010, many real estate owners are wondering if it is too late to begin a collective sale process now.
Owners would probably still have the chance to ride on the current wave of collective sales if they begin early; knowing that organising a sale is a lengthy process, said Credo.
With the anticipated moderation in the marketplace due to the government’s cooling measures, en bloc owners should rethink bullish pricing strategy, they said. Aggressive pricing would lead to failure of a collective sale, resulting in frustration among owners.