Gap in expectations between owners and developers hamper sales in the en-bloc market
In July, Wing Tai’s subsidiary withdrew from the sale of Holland Tower for $76.3m.
Tentative and uncertain market outlook continued to drag Singapore’s collective sales market in 3Q23.
Amongst the biggest challenges faced by the en bloc market is the “expanding gulf in expectations between owners and developers,” added Knight Frank.
“[This has been] exacerbated by increasing costs, interest rates and the prohibitive increases in ABSD rates, all in a climate of economic pessimism,” Knight Frank said.
Increasing costs have pushed developers to turn towards the GLS confirmed list, added Knight Frank.
The withdrawal of Wincove Investment, a subsidiary of Wing Tai, from the sale of Holland Tower, after the deal was made at S$76.3 million in March this year, also dampened collective sale sentiments.
On the flip side, Knight Frank said the sole collective sale of Far East Shopping Centre at the end of 3Q23 “extended a precious lifeline into what has been a rather gloomy en-bloc environment that was affected by the recent increase in the foreigner ABSD rate for residential properties in April this year.”
“Foreigners residing in properties undergoing the en-bloc process are not likely to sell due to replacement costs that have exponentially increased for them,” Knight Frank commented.