Properties going for S$100 million and above are the most difficult to sell in the collective sales market this year, according to The Business Times.
Data released by Credo Real Estate showed that plots that have been put up for sale only enjoyed a 51 percent success rate in the first half of the year, compared with 65 percent for the whole of last year.
The property consultancy firm said that 26 sites with an asking price of S$100 million and above were available in the collective sales market from January to June this year, compared with 11 sites in 2010. Of the 26 sites, only six sites, valued between S$100 million and S$300 million, were sold, while none of those above S$300 million were sold. This translates to a success rate of just 23.1 percent.
In 2010, three of the 11 sites valued at S$100 million and above were successfully sold. This translates to a success rate of 27.3 percent.
On the contrary, sites valued at less than S$50 million enjoyed a success rate of 81 percent in the first half this year, up from 76 percent over the same period last year.
Tan Hong Boon, Deputy Managing Director at Credo, said the low success rate for the big and small collective sales sites could be attributed to the uncertainty in the property market, as well as to the higher supply of state land for sale under the Government Land Sales (GLS) programme.
He noted that with the government committed to control property prices, many developers are keen to see quicker turnaround periods, particularly for mega sites. In addition, sites sold on the collective sales market also take a longer time to change hands, unlike the sites sold under the GLS programme.
“For collective sales, you need to factor in the three to four months that it takes for the strata title board to give the sale order,” said Tan. “Then, another hindrance is the six-month period where developer has to permit residents to stay rent-free before it can start to redevelop the site.”
Land process under the GLS programme is more straightforward, said Donald Han, Vice Chairman for Cushman & Wakefield Singapore.
“The land sale can be completed within three months, while collective sales may take a while. And there is the unknown factor: developers cannot be sure that there won’t be dissidents and appeals against the sale.”
He noted that the large supply of land in the pipeline under the GLS programme has added to the lack of interest in large collective sale sites.
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