As many as 50 collective sales may be launched in 2010, but the deals may take longer because of rising price expectations and revised rules.
According to property agents polled by The Business Times, as many as 50 collective sales are set to take off in 2010, though at least half of these could be translated into actual deals before the end of the year.
Research done by Credo Real Estate has listed 34 possible developments that could be tendered for collective sale this year.
18 of the 34 possible developments are either in District 10 or 15. “These are among the larger high-density private residential districts that enjoy healthy demand for new homes and hence land for residential development,” says Karamjit Singh, managing director of Credo.
Holland Hill Lodge and Goodwill Mansion in Balestier, two of the 34 sites, have already been launched this year. Meanwhile, almost half of the 34 developments on the list comprise less than 50 existing units each.
A total of 87 collective sale deals were sealed amounting to $11.6 billion, during the peak year of 2007. In 2008, this fell to eight collective sale deals at a total of $346.5 million and just one deal last year for a total of $100.8 million.
Owners looking to exceed or match the prices in 2007 could stand in the way of en bloc sales.
Steven Ming, director of investment sales and prestige homes at Savills Singapore, says that home owners may expect higher premiums before they sign the Collective Sale Agreement (CSA) because the prices could increase while waiting to collect their sales proceeds. “It can easily take one and a half years from the point of obtaining the first signature to the time when owners receive full sales proceeds,” he said.
“Sellers, when they consider signing the CSA, look at how much premium they will get for their unit in an en bloc sale than if they were to sell it on an individual basis in the current market; as well as the future replacement cost for the property. Sellers seek a higher premium for fear of being priced out later if prices rise steeply,” he added.