En-bloc hopefuls struggle in Singapore's weakening property market
Horizon Towers is reviving its en bloc attempt for the third time.
Bloomberg reports that hopeful homeowners are relaunching en-bloc bids in 2019 in the hopes of turning a profit even as developers themselves are having trouble clearing off their inventories in line with Singapore’s slowing residential market.
Also read: New home sales set to crash 20% in 2019
Of the six en-bloc sales announced so far in 2019, the properties at Horizon Towers, Cavenagh Gardens and Flynn Park are being relaunched with around 75% of Flynn Park owners agreeing to lower the reserve price from $363.8m to $325m in the hopes of closing a sale.
Similarly, Horizon Towers relaunched for sale after it became the first casualty to July’s cooling measures. As the first major en bloc exercise to close after the property curbs, the 211-unit in Leonie Hill ended without a single bid despite an extension of the tender period from August 7 to September 12. Park View Mansions is also relaunching at a reserve price that’s 22% lower at $250m whilst Gilstead Mansion also reduced its price guide by $3m to $65m.
“Billion-dollar en-bloc deals will be very hard to get through,” said Nicholas Mak, an executive director at real estate asset manager ZACD Group. “Developers are no longer land hungry and are more concerned about selling existing projects.”
After a heated rally that saw the en-bloc market hit a whopping $9.9b in transaction value in the first half of 2018, homes put up for collective sales are increasingly witnessing weak take-up rates.
The higher stamp duties and loan-to-value curbs announced in July 2018 coupled with revised rules on shoe-box rules dealt a heavy blow on en-bloc deals, pushing developers to slow in their land banking activities or hold back altogether.
“As the government moves in with more restrictive measures to curb both demand and supply, we expect developers to focus on clearing inventories rather than adding more,” said Derek Tan, an analyst at DBS Group Holdings Ltd.
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