En bloc sales will likely roar in Tiger year
The managing director of Credo (Mr. Singh I believe) trying to drum up business for himself again, dishing out the same old tired reasons for putting your home on the en bloc market in the false hope of striking it rich. The oracle of en bloc predicts it is time for a new feeding frenzy and estates should line themselves up at the trough.
Well, there are two ways of looking at the en bloc market - one from the buyers point of view and the other from the sellers.
Each typical property market cycle can be sub-divided into four – by dividing each of the upswings and downswings into two.
When the market begins to move up, in the first quarter of the property market cycle, land prices move up the fastest as developers tend to do most of their land acquisitions then. That is when the en bloc sales fever reaches its peak, as in the 1995/96, 1999/2000 and 2006/07 periods.
Yes, we remember the 2007/08 peak, how could we forget? Tampines Court was one of the very few lucky ones to be snatched from the en bloc jaws at the last moment (quite literally) but sadly saw its sister HUDC estates gobbled up and their owners spat out (I'm thinking of Gillman Heights in particular and the shabby treatment owners got from the developer afterward).
The buyer acquires land at the beginning of a cycle knowing that he can double/triple/quadruple his profit in the second/third quarter of the cycle. Owners will be told to rush in now and sell... or miss the wave.... And it is precisely in this period that owners in suitable projects should act decisively to seize their en bloc chance. So owners should act quickly if they want to seize the opportunity to lock themselves in to selling low and buying high before the cycle has had a chance to complete. Yes, sell low, buy high or halve the size of your home and do it now!
What this wily old property agent doesn't tell you is the flip side for the sellers; that it is only in the second quarter of the 'cycle' that they will receive their sale proceeds in an escalating market which would have greatly diminished in buying power by then. Only those with second properties or holding power can wait to buy their new homes in the distant downturn, when perhaps they can purchase a reasonable property in a decent area. Most though will be stuck with smaller units in outlying areas, their nest eggs shrunk and their long years of hard work all for nothing. The frenzy of 2007 left many, many owners dismayed, devastated, shortchanged, angry, broken. Do not forget .
At this point, we understand that owners of as many as 50 projects have recently formally started their en bloc sales processes and are gearing up to hit the market sometime in the first half of this year, some as early as this month. They range from small to large projects and are located in all major residential districts.
There are a lot of amoral speculators out there with properties they are dying to get rid of, even if it is only for a small profit. They show no compunction whatsoever in driving en blocs in estates, gathering the 20% and hammering away forever with their lies and half-truths.
Many more owners are likely to jump on the bandwagon, especially if the earlier ones prove successful.
There is nothing more frightening than the stupidity of the masses when they perceive themselves to be 'losing out'. It's almost as if they view the land beneath them as a block of ice, melting away, when in reality it is solid gold, in no danger of losing it's long term value (especially while the plot ratio is high).
If the projects are priced reasonably, we believe they should have a good chance of landing a buyer this year.
The only acceptable and 'reasonable' price should be based on what an owner can reasonably expect to pay in an uprising market 2 years down the line. Forget what the LTSA says or fails to say - it's REPLACEMENT value that is of the most concern for the genuine home owner/seller. A fair indication would be the cost of a new unit in the new development. Why sell a Mercedes and replace it with a Honda?
Reacting to the sharp upturn in mass market homes last year, the Government is releasing more land sites this year. Owners should note that these would compete for developers’ interest
Same old scaremongering tactics. Developers need land to develop - constantly - it's a fact of life so there's no need to panic. When times are lean the Government throws them sustenance food and they lap it up, but it's the land in the prime districts and developed estates they really want to sink their teeth into.
And do not to forget that no one can predict anything with certainty. Cycles are not on a nice, neat 4 year rotation, so don't give this Credo guy any credence; he is only out to sell anything he can get his hands on.
The 2006/2007 frenzy was an eye-opener to the many fault-lines and errors inherent in en bloc, both statutory and human. This property agent is hoping all will be forgotten, and owners will once again fall hook, line and sinker for these tired old inducements and rationalisations.
Sorry, but I didn't buy them then, and I don't buy them now.
Sunday Times - 7 Feb 2010
A study by property consultant Credo Real Estate has listed a total of 34 possible properties that could be tendered for collective sale in 2010.
Eighteen of the 34 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 Credo's managing director Karamjit Singh.
Collective sales committees have been appointed for all the 34 developments in the list. Most have also appointed property consultants and lawyers. Some have begun signing a Collective Sale Agreement (CSA); however, a tender launch could well flow into next year, especially for larger estates.
Two of the 34 sites - Goodwill Mansion in Balestier and Holland Hill Lodge - have already been launched this year. Meanwhile, nearly half the developments on the list comprise fewer than 50 existing units each.
Agents say larger estates will take more time to be launch-ready as it takes longer to secure the minimum 80 per cent consent level from owners. It also requires several (usually three or four) extraordinary general meetings (EOGMs) before a site can be launched for sale under revised en bloc rules that kicked in from October 2007.
Mr Singh points out that even for an estate of say just 30 units, it could take about six months between the time owners requisition for their first EOGM and inking the sale to a developer. This used to take just three to four months before rules were amended.
Jones Lang LaSalle's head of investment sales Stella Hoh says: 'Small and mid-sized sites will form the bulk of new launches and actual deals up to, say, the third quarter of this year. Next year onwards, if the private residential market continues to be stable and sales volume picks up further, that will create more confidence for bigger en bloc sale sites to be launched.'
Colliers International executive director (investment sales) Ho Eng Joo reckons that projects in city fringe locations like Balestier, as well as East Coast and Changi areas, are more likely to succeed in en bloc sale efforts than those in the prime districts. 'Prices of end units (homes) in prime districts have not recovered to their 2007 peak, so it's harder for developers to cough up 2007 land prices that many owners expect.' In fringe locations, the price gap compared to 2007 has been much less.
Mr Singh suggests that it may be tough selling 99-year leasehold en bloc sites this year as developers can buy comparable plots under the Government Land Sales Programme. 'Likewise, prime sites very close to Orchard Road may also see a slow start as developers still have prime sites in their books, many of which were bought in 2006/2007.
'Where we expect to see greater levels of success would be (sites) in mass market and mid-prime locations which are realistically priced and offering unique selling points like being near to Sentosa, MRT stations, shopping centres and good schools,' he added.
Credo reckons about 30-50 sites could be launched this year, of which around 20 could be sold by end-2010. Knight Frank executive director Nicholas Wong forecasts 40-50 launches and 15-20 sales this year. JLL's Ms Hoh predicts that only 15-20 sites could be launched, of which 10 may be sold.
During the peak year of 2007, a total of 87 collective sale deals were sealed at a total of $11.6 billion. This fell to eight deals for a total $346.5 million in 2008 and just one deal at $100.8 million last year.
Owners looking to match or exceed 2007 prices could stand in the way of en bloc sales.
Savills Singapore's director of investment sales and prestige homes Steven Ming says that owners may expect higher premiums before they sign the CSA as prices could rise while they wait 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.'
However, developers in their bids would be more mindful of changes in property cycles while they wait for Strata Title Board and possibly other court approvals before they can take possession of the site. 'The sudden market correction in late 2008 is still fresh on developers' minds,' Mr Ming notes.
Business Times - 12 Feb 2010
When the market begins to move up, in the first quarter of the property market cycle, land prices move up the fastest as developers tend to do most of their land acquisitions then. That is when the en bloc sales fever reaches its peak, as in the 1995/96, 1999/2000 and 2006/07 periods.
Yes, we remember the 2007/08 peak, how could we forget? Tampines Court was one of the very few lucky ones to be snatched from the en bloc jaws at the last moment (quite literally) but sadly saw its sister HUDC estates gobbled up and their owners spat out (I'm thinking of Gillman Heights in particular and the shabby treatment owners got from the developer afterward).
The buyer acquires land at the beginning of a cycle knowing that he can double/triple/quadruple his profit in the second/third quarter of the cycle. Owners will be told to rush in now and sell... or miss the wave.... And it is precisely in this period that owners in suitable projects should act decisively to seize their en bloc chance. So owners should act quickly if they want to seize the opportunity to lock themselves in to selling low and buying high before the cycle has had a chance to complete. Yes, sell low, buy high or halve the size of your home and do it now!
What this wily old property agent doesn't tell you is the flip side for the sellers; that it is only in the second quarter of the 'cycle' that they will receive their sale proceeds in an escalating market which would have greatly diminished in buying power by then. Only those with second properties or holding power can wait to buy their new homes in the distant downturn, when perhaps they can purchase a reasonable property in a decent area. Most though will be stuck with smaller units in outlying areas, their nest eggs shrunk and their long years of hard work all for nothing. The frenzy of 2007 left many, many owners dismayed, devastated, shortchanged, angry, broken. Do not forget .
At this point, we understand that owners of as many as 50 projects have recently formally started their en bloc sales processes and are gearing up to hit the market sometime in the first half of this year, some as early as this month. They range from small to large projects and are located in all major residential districts.
There are a lot of amoral speculators out there with properties they are dying to get rid of, even if it is only for a small profit. They show no compunction whatsoever in driving en blocs in estates, gathering the 20% and hammering away forever with their lies and half-truths.
Many more owners are likely to jump on the bandwagon, especially if the earlier ones prove successful.
There is nothing more frightening than the stupidity of the masses when they perceive themselves to be 'losing out'. It's almost as if they view the land beneath them as a block of ice, melting away, when in reality it is solid gold, in no danger of losing it's long term value (especially while the plot ratio is high).
If the projects are priced reasonably, we believe they should have a good chance of landing a buyer this year.
The only acceptable and 'reasonable' price should be based on what an owner can reasonably expect to pay in an uprising market 2 years down the line. Forget what the LTSA says or fails to say - it's REPLACEMENT value that is of the most concern for the genuine home owner/seller. A fair indication would be the cost of a new unit in the new development. Why sell a Mercedes and replace it with a Honda?
Reacting to the sharp upturn in mass market homes last year, the Government is releasing more land sites this year. Owners should note that these would compete for developers’ interest
Same old scaremongering tactics. Developers need land to develop - constantly - it's a fact of life so there's no need to panic. When times are lean the Government throws them sustenance food and they lap it up, but it's the land in the prime districts and developed estates they really want to sink their teeth into.
And do not to forget that no one can predict anything with certainty. Cycles are not on a nice, neat 4 year rotation, so don't give this Credo guy any credence; he is only out to sell anything he can get his hands on.
The 2006/2007 frenzy was an eye-opener to the many fault-lines and errors inherent in en bloc, both statutory and human. This property agent is hoping all will be forgotten, and owners will once again fall hook, line and sinker for these tired old inducements and rationalisations.
Sorry, but I didn't buy them then, and I don't buy them now.
Sunday Times - 7 Feb 2010
Collective sales set to take off again
SINGAPORE) As many as 50 collective sales may be launched this year, though less than half of these could translate into actual deals before year-end, say property agents polled by BT. A study by property consultant Credo Real Estate has listed a total of 34 possible properties that could be tendered for collective sale in 2010.
Eighteen of the 34 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 Credo's managing director Karamjit Singh.
Collective sales committees have been appointed for all the 34 developments in the list. Most have also appointed property consultants and lawyers. Some have begun signing a Collective Sale Agreement (CSA); however, a tender launch could well flow into next year, especially for larger estates.
Two of the 34 sites - Goodwill Mansion in Balestier and Holland Hill Lodge - have already been launched this year. Meanwhile, nearly half the developments on the list comprise fewer than 50 existing units each.
Agents say larger estates will take more time to be launch-ready as it takes longer to secure the minimum 80 per cent consent level from owners. It also requires several (usually three or four) extraordinary general meetings (EOGMs) before a site can be launched for sale under revised en bloc rules that kicked in from October 2007.
Mr Singh points out that even for an estate of say just 30 units, it could take about six months between the time owners requisition for their first EOGM and inking the sale to a developer. This used to take just three to four months before rules were amended.
Jones Lang LaSalle's head of investment sales Stella Hoh says: 'Small and mid-sized sites will form the bulk of new launches and actual deals up to, say, the third quarter of this year. Next year onwards, if the private residential market continues to be stable and sales volume picks up further, that will create more confidence for bigger en bloc sale sites to be launched.'
Colliers International executive director (investment sales) Ho Eng Joo reckons that projects in city fringe locations like Balestier, as well as East Coast and Changi areas, are more likely to succeed in en bloc sale efforts than those in the prime districts. 'Prices of end units (homes) in prime districts have not recovered to their 2007 peak, so it's harder for developers to cough up 2007 land prices that many owners expect.' In fringe locations, the price gap compared to 2007 has been much less.
Mr Singh suggests that it may be tough selling 99-year leasehold en bloc sites this year as developers can buy comparable plots under the Government Land Sales Programme. 'Likewise, prime sites very close to Orchard Road may also see a slow start as developers still have prime sites in their books, many of which were bought in 2006/2007.
'Where we expect to see greater levels of success would be (sites) in mass market and mid-prime locations which are realistically priced and offering unique selling points like being near to Sentosa, MRT stations, shopping centres and good schools,' he added.
Credo reckons about 30-50 sites could be launched this year, of which around 20 could be sold by end-2010. Knight Frank executive director Nicholas Wong forecasts 40-50 launches and 15-20 sales this year. JLL's Ms Hoh predicts that only 15-20 sites could be launched, of which 10 may be sold.
During the peak year of 2007, a total of 87 collective sale deals were sealed at a total of $11.6 billion. This fell to eight deals for a total $346.5 million in 2008 and just one deal at $100.8 million last year.
Owners looking to match or exceed 2007 prices could stand in the way of en bloc sales.
Savills Singapore's director of investment sales and prestige homes Steven Ming says that owners may expect higher premiums before they sign the CSA as prices could rise while they wait 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.'
However, developers in their bids would be more mindful of changes in property cycles while they wait for Strata Title Board and possibly other court approvals before they can take possession of the site. 'The sudden market correction in late 2008 is still fresh on developers' minds,' Mr Ming notes.
Business Times - 12 Feb 2010
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