Is En Bloc Market coming back in 2021 with developers starting to replenish their land bank?

Quoted:

SINGAPORE: The muted collective sales market could see a revival in the second half of next year, as developers turn to the private residential scene to feed a growing appetite for land, according to property analysts.

This comes as the property market has remained resilient in the face of the COVID-19 pandemic and consequent economic uncertainty, said analysts.

Source: Article quoted from CNA 19 December 2020

Amid the pandemics that swept across the globe last year, Singapore economy was hit hard but is now on its road to a gradual recovery. At least the real estate market looks promising with sales index hitting double digit growth on quarter-to-quarter period. Since last year, just November and December alone, Developers are already on the move to acquire existing private homes to fill up their land banks.

In November 2020, Roxy-Pacific Holdings had forked out S$93 million to acquire 15 Terraced houses along the Guillemard Road, the largest private residential transaction in year 2020.

In the same month, Casuarina Properties sold a 25,000 sq ft freehold land at Haig Road/Haig Lane to a consortium at S$32.8 million.

In December, another residential site consisting of 3 adjoining residential sites at Lorong N Telok Kurau were put up for collective sales at a reserve price of S$25 milllion. This work out to a land cost of S$902 psf per plot ratio (psf ppr) after factoring in 7% gross floor area for the balconies. Including a development charge (DC) of around S$264,602, the S$32.8 million price tag will translate to about a land rate of S$943 per sq ft per plot ratio (psf ppr). The plot could yield up to 32 residential units with sizes averaging at about 100 sq metres for each unit.

So what drives the developer to make the move?

Well, lets take a look at the current unsold inventory in the market. We have about 26,000 unsold units as of 3rd quarter of 2020. Developers are clearly running our of land stock according to the analysts.

Looking back at the last En Bloc hype in 2017/2018, During mid 2016, back then the unsold units inventory fell to 23,000 units. Thereafter, the En Bloc sales just took off and saw the property market index trending upwards.

Our current inventory stock is not too far off, and this thus can serve as a guide or benchmark when developers are starting to replenish their stock.

Are we witnessing another en bloc fever? Will there be another cycle of uprising property prices?

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