Results 1 to 2 of 2

Thread: At a rate of one deal every three days, this property culture hardly exists anywhere

  1. #1
    Newbie
    Join Date
    Feb 2007
    Posts
    366

    Default At a rate of one deal every three days, this property culture hardly exists anywhere

    En bloc

    Uniquely Singapore

    At a rate of one deal every three days, this property culture hardly exists anywhere else. By Seah Chiang Nee.

    Jun 23, 2007

    SINGAPORE’S hot property market has developed a new culture rarely seen anywhere else in the world.

    It’s something called “en bloc sale”, in which a developer pays out a small fortune to owners of an expensive condo estate, tears it down and builds an even more expensive one.

    In other parts of the world, the term – if used at all – would probably apply to slum clearance for commercial development, but it takes on a different form in this land-scarce city.

    By this process of renewal, developers are squeezing values out of existing condos in exclusive areas to take advantage of a property boom.

    An influx of funds from abroad and a re-rating of the city’s economic future have contributed to the frenzy.

    It started soon after Singapore awarded contracts to build two high-end casino resorts and announced plans to attract the world’s rich and talented.

    Collective sales last year hit a whooping S$8bil (RM18bil), turning thousands of homeowners into multi-millionaires almost overnight. (Indonesians and Malaysians have long been the two top investing groups here.)

    The tempo intensified this year. In the first five months, 57 more condo projects – including relatively new ones – have changed hands for S$7.59b, almost reaching last year’s total.

    It works out to one deal every three days.

    “It’s spreading like wildfire. As soon as one price record is established, it is replaced by a higher figure,” said a real estate agent.

    The action has mainly been confined to the exclusive Districts of 9, 10 and 11 in the centre and southern Singapore, the choice of wealthy investors.

    The ripples are, however, felt in varying degrees by the rest of the island state, affecting even some public Housing and Development Board (HDB) flats, where 80% of the people live.

    A collective sale allows owners to sell their properties for a much higher price than they can fetch individually on the open market. It must be approved by at least 80% of the residents.

    One example is Farrer Court. Two years ago you could have bought a unit for S$460,000. Developers are offering owners S$2.8mil each in an en bloc deal for the 20-year-old estate.

    Then a short distant away, the owners of Leedon Heights sold their homes for S$2.4mil (RM5.4mil) each.

    Developers paid the residents of Char Yong Gardens in Cairnhill near Orchard Road S$1,788 per square foot (psf), a new benchmark.

    That record lasted only a few days before another en bloc deal crossed the magical S$2,000 psf mark. The 24 owners of The Ardmore got an eye-popping S$11mil each in a S$262mil deal for the S$2,337 psf up-market property.

    Until the recent revival, property had been languishing some 40% below its 1995 peak.

    The pre-casino early birds who invested in the luxurious condo The Sail, a stone’s throw from the Sands resort, have already doubled their money.

    With a projected 6% annual growth for the next few years and a projected population of six million to seven million, more foreigners are placing their bets on the island-state.

    Their money is going into the stock market and properties.

    “Singapore is a small place with limited land. Its size cannot expand but demand for land is growing,” a long-time agent once told me.

    “As long as there is strong growth and stability, the demand for land here will outstrip supply.”

    The en bloc strength underlies the industry’s faith that at least for five to 10 years, the market will continue to be strong.

    This uniquely Singaporean trend is raising activity in the general property market to a feverish pitch as some 10,000 en bloc beneficiaries – with a lot of cash – seek alternative homes.

    Two of them just had record prices – S$675,000 and S$720,000 – in cash for five-room HDB flats, or S$150,000 higher than market valuation.

    Few things in life are a one-way traffic, not even en bloc sales.

    While the majority ends up a happier lot, a few who had bought their units at the height of the last boom may have ended up losers despite the high price.

    Some elderly citizens who had grown too attached to their homes to want to sell were also compelled to move out – because 80% of the residents voted to sell.

    The minority has no legal resort against the decision.

    Broadly, Singaporeans welcome the rise in property values because 90% of them own their homes.

    This is checked, however, by concern among the middle class of being left behind by a widening wealth gap.

    While the values of private properties leap manifold, those of HDB homes move far more slowly.

    Another group that worries about the boom is the thousands of young graduates just starting off in life who see the dream of owning a condo slipping away.

    “At this rate we may not be able to afford even an HDB flat,” said an IT engineer who is saving to get married.

    That, of course, would be a political disaster for the government, so it is closely monitoring the market to ensure enough cheap affordable homes for all.

    Foreign funds can come and they can also go, so is the boom sustainable?

    Some who believe it will end are planning to sell into strength. But, at least for now, the feeling is that the flourishing market is a re-rating of values rather than a property bubble.

    The buyers are looking into a future global city of seven million affluent people who will need a lot of new homes.

    (This article was first published in The Star, Malaysia, onJune 23, 2007)

  2. #2
    Bull Run
    Guest

    Default Re: At a rate of one deal every three days, this property culture hardly exists anywhere

    Quote Originally Posted by ahlahdin
    En bloc

    Uniquely Singapore

    At a rate of one deal every three days, this property culture hardly exists anywhere else. By Seah Chiang Nee.

    Jun 23, 2007

    SINGAPORE’S hot property market has developed a new culture rarely seen anywhere else in the world.

    It’s something called “en bloc sale”, in which a developer pays out a small fortune to owners of an expensive condo estate, tears it down and builds an even more expensive one.

    ....................

    Some who believe it will end are planning to sell into strength. But, at least for now, the feeling is that the flourishing market is a re-rating of values rather than a property bubble.

    The buyers are looking into a future global city of seven million affluent people who will need a lot of new homes.

    (This article was first published in The Star, Malaysia, onJune 23, 2007)

    Wah! So many people take note of Singapore property market.
    Good lah! The more these people come and buy, the higher the psf.
    Up up up!

Similar Threads

  1. Property sector sentiment down, but underlying demand still exists
    By reporter2 in forum Singapore Private Condominium Property Discussion and News
    Replies: 0
    -: 07-08-18, 22:35
  2. Property sector sentiment down, but underlying demand still exists
    By reporter2 in forum HDB, EC, commercial and industrial property discussion
    Replies: 0
    -: 01-08-18, 22:46
  3. Kitchen Culture exits property plan
    By reporter2 in forum Singapore Private Condominium Property Discussion and News
    Replies: 0
    -: 19-11-12, 17:44
  4. Property units flipped within days last year for tidy gains
    By mr funny in forum Singapore Private Condominium Property Discussion and News
    Replies: 1
    -: 07-06-11, 16:29
  5. Casinos or culture? Singapore seeks tourists
    By ahlahdin in forum HDB, EC, commercial and industrial property discussion
    Replies: 0
    -: 05-06-07, 20:19

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •