En bloc sales have been slowing down over the past few months, but it's not just due to the recent tightening of the rules governing such transactions.
Amid the global credit crunch, property watchers said foreign investments have pulled back, and the overall downturn is pushing developers to look at other moneymaking options.
But they also noted that fundamentals remain strong in Singapore, and the current slowdown is due more to external factors.Collective sales saw strong demand a few months ago, but developers are now changing tack in the tighter credit environment.
Those on the buying end of en bloc sales are choosing to hang on to their properties longer, delaying new project launches. They are also getting picky about additions to their landbank.
"They've got plenty to choose from. The most straightforward possibility for developers to partake would be going to government sale of site programme. A lot are more configured toward mass market, lower mid-tier level where we're seeing some activity in the end-market purchases," said Donald Han, MD of Cushman & Wakefield (Singapore).
Many said the current slowdown is largely due to the external environment, rather than the fundamentals of Singapore.
"A lot of buying that resulted in last round of en bloc came from overseas funds... We are rather small, in terms of available of units or land, so an amount which may not make an impact in another country will have a big impact on us. (Funds) either coming in or out have got that exponential effect on the market in Singapore," said Dr SK Phang, a lawyer.
So with tightening credit conditions worldwide causing a dip in foreign inflows, Singapore's property market is taking a hit.
But analysts said many developers took home huge profits in the past two years, and will definitely be able to weather stormy skies for now.
While there is little to be done about the external environment, analysts said en bloc rules can be further tweaked to allow the process to be speeded up.
Said Dr Phang: "The long timeline has to be shortened; it's too long, the whole en bloc process. The law allows you 12 months to get 80 percent. And after that, the law allows you 12 months to file the ST (strata title). And when you do, the STB (Strata Title Board) may take short of 4 months or a long time of a year.
"Of course not every case is that long but if you look at the historical maximum permissible time, you're looking at something about 2 years plus. And that's a long time to wait for the money. Given the volatile market conditions in Singapore, if it goes up, owners get concerned with replacement. If it goes down, developers (become) concerned. So we should try to manage the timeline and shorten it."
The en bloc market saw more than a 100 deals valued at more than S$13 billion last year. - CNA /ls
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