Several ‘red flags’ raised in the en bloc market
As many as 30 Singapore condominium or apartment projects have failed to secure a collective sale buyer since January this year
The latest round of property cooling measures seems to have a proven effect for least 3 freehold residential projects with the largest property agency PropNex resigning from Boonview and Le Wilkie, while Pasir View Park has shelved plans for its first en bloc attempt.
It was noted by consultants that around 30 collective sale sites have failed to find a buyer since the start of the year and no deals have been struck since the new set of measures took effect on 06 July 2018.
For Boonview in Marymount Terrace, PropNex mentioned in its resignation letter that they weren’t confident to match the expected price between the homeowners and property developers.
Boonview comprises of 119 residential units in total and 2 commercial shops; had initially set its guide price to around $305 million or a land rate of $1,900 psf ppr. However, owners had a change of heart and felt that they should be asking for a minimum of $2,000 psf – considering the fact that Boonview is a freehold Singapore condo and the nearby new launch JadeScape (a 99-year leasehold condo) may be launching at an average of $1,700 psf.
The chairman of the Boonview collective sale committee (or CSC) disagreed with the owners’ justification of a higher collective sale price point and deemed that it is not feasible with the current market sentiment.
Although the agency has pulled out from both Boonview and Le Wilkie, it believes that these projects would be able to sell for better prices when the market sentiment has improved – due to their excellence in location.
Following the property cooling measures, PropNex and other 2 marketing agencies which the Boonview CSC has approached, advised the homeowners to reduce its price point to a range between $250 million to $290 million. However, even at a reduced asking price, it was noted that the agencies weren’t confident that it will be attractive enough to draw buyers and weren’t optimistic that they can obtain 80% consent from all the owners.
On the other hand, some developments within or near the core central region (CCR) in Singapore remained optimistic and are pushing for a collective sale.
The most recent one came from Golden Mile Complex, which has already obtained consent from 80.83% of the total share value of the development. The minimum requirement is 80%.
Completed back in 1973, the leasehold mixed-use project has a total of 718 units – both shops and office spaces, and almost 70 private residential apartments; is one of the most eye-catching development in Singapore with an iconic stepped terraced design. The property is already 49 years into its 99-year tenure.
Golden Mile complex is widely known as “Little Thailand” in Singapore during the 1980s and even till today, it’s still a gathering point for Thai nationals and locals will often patronize its food outlets and also utilize the transport services which take them to Malaysia.