Ponder this...

No doubt, the pro en bloc group will latch on to the recent newspaper article about how the developers' land banks are running low and how it  is therefore a good time to go en bloc. This is their blinkered vision and not the entire picture. Developers recently benefited from the Residential Property (Amendment) Bill Nov 2010 - which allowed them to hold onto their land for longer.

Foreign developers – introduction of a new extension charge framework

The first group of key amendments relates to foreign developers who are given approval under the RPA to acquire or retain land for residential development. They are required to complete their residential development within a stipulated Project Completion Period, which is currently five years. They are then required to sell off all units in the residential development within two years from the issue of the Temporary Occupation Permit (TOP). This is to prevent them from hoarding or speculating in residential land. If they fail to meet the stipulated timelines, we may forfeit their Banker’s Guarantee, which is pegged at 10% of the land price.  

     With the amendments, the Controller of residential property will be empowered to levy an extension charge for any extension of time beyond the project completion period. The extension charge framework is essentially the same as the extension premium scheme that applies to the sale of sites under the Government Land Sales programme today. The key advantage of the extension charge framework is to make the cost of delay apparent to the developers and encourage them to complete the developments in a timely manner.      

     We will apply the same penalty regime and extension charge framework to Singapore entities which are given approval to convert to foreign entities and to retain their residential land for development and sale; as well as to foreign entities that have been granted approval to change the use of their land to residential use on the basis that they will develop the land and sell the units.

Couple that with the HOLDING POWER of developers to release their units slowly onto the market - sometimes they just prefer to rent them out  as the market climbs higher.

So, the developers are still in a cushy position and are in no rush to replenish at one go.

11,849 homes left unsold in launched private projects

Sat, Dec 18, 2010 

By Uma Shankari

DEVELOPERS are sitting on close to 12,000 unsold units in private residential projects that have already been launched.
Data compiled by The Business Times using information from the Urban Redevelopment Authority (URA) shows that as at end-November this year, developers had a stockpile of 11,849 units in projects that they have already started marketing - that is, projects in which at least one unit has been sold.
While some developments have just a handful of units left unsold, a total of 138 launched projects scattered across the island have 10 or more unsold units left. And of these, 28 projects have more than 100 unsold units each.
The more recently-launched projects include Kheng Leong's The Minton; Frasers Centrepoint's Flamingo Valley; and City Developments' Residences At W Singapore Sentosa Cove - all of which were put on the market in the first half of this year when sentiment was buoyant.
But six projects with more than 100 unsold units each have been on the market for at least three years. These include prime developments such as Keppel Land's Reflections at Keppel Bay; SC Global Developments' Hilltops; Allgreen Properties' The Cascadia; and Wheelock Properties' Scotts Square.
The 11,849 units are held by the entire range of both big and small developers and include landed projects, though the majority are condominium developments.
Market observers say the stockpile could have been accumulated as developers typically roll out units in large developments in phases.
Those with strong holding power may also hold back some units in their projects as part of a larger marketing strategy. Keppel Land, for instance, did this with its Caribbean At Keppel Bay condominium.
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But the ample supply of ready-to-buy homes should show prospective homebuyers that there is no need to rush to pick up units in new launches, said another industry veteran.
Homebuyers snapped up 1,909 new private homes in November even as developers launched a strong supply of 2,329 new homes for sale. The strong demand from buyers took the total sales volume for 2010 to a record 15,025 units - even higher than the then-record 14,811 homes sold in 2007 during the last property boom.

'The fact that we have recovered so quickly from the financial crisis has given a lot of false confidence to many people with money,' the industry veteran said. 'They think that it is the right time to jump into property.'

In October, URA said that at the end of Q3 2010, there was a total supply of 64,358 uncompleted units of private housing from projects in the pipeline. Of these, 33,771 units were still unsold. The numbers include both launched and unlaunched projects.
But data compiled using URA's monthly update on the number of units launched, sold and unsold in residential projects in Singapore, released yesterday, showed that as at end-November, there were 11,849 units left unsold in launched projects.

This article was first published in The Business Times.