There was about $10.5 billion worth of en bloc deals in the first half of 2018.
With the en bloc fever driving real estate activity in the first half of the year, the government’s surprise property cooling measures in July dealt a huge blow on the bullish collective sales activity, with analysts expecting fewer transactions for the second half of the year.
“In the private residential market, it was the collective and en bloc sales of existing residential developments to developers that captured headlines with $10.5 billion deals being done in the first half of 2018,” said Savills Singapore senior director Alan Cheong.
More: Fate of en bloc bids now uncertain with new housing curbs
The cooling measures’ impact was most evident at the end of the tender for Horizon Towers in Leonie Hill, reported Singapore Business Review.
The first major collective sale exercise after the cooling measures ended with no takers despite the extended tender period from 7 August to 12 September.
And while marketing agent JLL has revealed plans to put the property up for en bloc sale again by early next year, it noted that it is testing the waters first.
“We are focusing to see whether new projects will be moving well in the next few weeks,” it said.
The weak take-up raises concerns for upcoming en bloc hopefuls as prospective buyers wait on the sidelines for the full effects of the property curbs, while some have ventured into the leasing market.
This comes after the Additional Buyer’s Stamp Duty (ABSD) was raised by the government and Loan-to-Value (LTV) limits tightened in its ninth round of property cooling measures since 2009.
Despite this, analysts still expect a rebound in housing demand in the near-term.
“Underlying demand for homes will continue to be relatively healthy, emanating from homeowners of developments that have been sold collectively, although some of this demand may shift to the Housing Development Board market,” said Edmund Tie & Co. CEO Ong Choon Fah.
More: Understanding The En Bloc Process (August 2018)
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
