En Bloc Sellers 'Set To Spend Over $4b Buying New Homes'

Source : The Straits Times, Wed, Sep 19, 2007

Savills expects sales to pick up as owners get paid and seek replacement homes















BOOM TIME: Some of the larger projects sold collectively in April to June include Leedon Heights and Farrer Court on Farrer Road. -- ST FILE PHOTO

CASH windfalls will soon be arriving for the hundreds of home owners who sold their property en bloc during the frenzied April to June period.

As they look for new homes, they could pour more than $4 billion into the market by early next year, according to new estimates from Savills Singapore.

The property consultancy said the 'bunching up' of collective sales in the second quarter will yield almost $6.4 billion in total collective sale proceeds.

Most of the amount is due to come in between December and February, which is likely to prompt a pickup in market activity, said Mr Ku Swee Yong, Savills Singapore's director of marketing and business development. Assuming some sellers already have second homes, those who need a new place to live in will have about $4.2 billion to spend, he said.

His calculations showed that about 2,800 units were sold en bloc between April and June, for an average of $2.3 million a unit.

But he estimates that only about two-thirds of the owners will buy replacement homes. Still, this means almost 1,900 units in move-in condition will be needed in the months ahead.

Buyers are likely to seek these homes in areas such as Bukit Timah, Upper Bukit Timah, Clementi, Novena, Upper East Coast and Bukit Panjang, added Mr Ku.

This is because the bulk of the collective sales during the period were in the prime areas of Districts 9, 10, 11 and 15. Together, these cover Orchard, Holland, Bukit Timah, Newton and the East Coast.

Some of the larger projects sold en bloc in April-June include Farrer Court and Leedon Heights on Farrer Road, with more than 900 units between them. All these projects are in District 10, said Savills. In this prime district alone, 1,600 units were sold for $4.3 billion, it added.

'Sellers in Districts 9 and 10 are likely to look for new homes in Districts 11 and 21 - Bukit Timah and Upper Bukit Timah,' said Mr Ku. 'Even if they have money to stay in the centre of town, they may have nothing to buy, as most of the older projects have already gone en bloc in the last two years.'

On the other hand, Bukit Timah and Upper Bukit Timah 'have plenty of projects and not many collective sales', he added.

He expects en bloc sellers to be out in full force buying new homes starting from December, thanks to the record run of collective sales this year - such deals from January to June hit almost $10 billion, according to Savills.

'Almost all such sellers get their money within nine months of the sale,' Mr Ku said, adding that Strata Titles Board sale approval takes about six months.

He added it has proven difficult for some sellers to buy a new home using a bridging loan. 'So most of them won't be able to buy a replacement unit until they actually get money in hand.'