En bloc cycle may start in 2021: Huttons

By Valerie Kor / EdgeProp Singapore | September 3, 2020 8:45 PM SGT
SINGAPORE (EDGEPROP) - Developers may start to buy land and kickstart a new en bloc cycle in 2021, as most developers would have sold out their units, according to a Huttons’ topical paper in August. Several projects will meet their five-year Additional Buyer’s Stamp Duty (ABSD) timeline in 2021, including Grandeur Park Residences, Seaside Residences, Martin Modern and Margaret Ville.
The paper points to the changing behaviours of developers as a result of control measures introduced in 2011, including ABSD, Seller’s Stamp Duty (SSD) and the Loan-to-Value (LTV) ratio.
ABSD is applied to the purchase price of the land. While housing developers may apply for upfront remission of the ABSD, the developer has to pay the full ABSD sum, including interest should the residential development fail to fully sell all units within five years.
ADVERTISEMENT
The report states, “This is onerous on the housing developer as failure to sell the last unit means the entire profits from the project can potentially be wiped out.” Therefore, the stringent ABSD rules have caused developers to sell their existing projects before buying new land.
en bloc graph - EDGEPROP SINGAPORE
Previously, when developers were only subject to the less punitive Qualifying Certificate (QC) rules, which gave them up to seven years to sell out their projects, developers continued to buy land. During these periods, the uncompleted unsold stock in the market averaged at about 37,000 units.
Since the ABSD was implemented, Huttons observes that although uncompleted and unsold stock dwindled over the next four years, developers did not enter the en bloc market to acquire more land. The next en bloc cycle only started from 2016 to 2018, five years after 2011. The uncompleted unsold stock was around 20,000 units.
Currently, the government has given a six-month extension to the ABSD timeline subject to certain conditions, thus certain developers would have more time to sell their units. According to published data from the Urban Redevelopment Authority (URA), there are 11 unsold units that will meet the ABSD timeline this year. Next year, the figure is 420.
ADVERTISEMENT
unsold stock singapore - EDGEPROP SINGAPORE
As sales momentum picks up in Phase 2 reopening, Huttons believes that developers will not face problems selling out their units. It points to a successful bulk sale of 16 units at 38 Jervois in June as an example, which helped the developer beat the August ABSD timeline.
For price trends, recent transactions, other project info, check out these projects' research page: Grandeur Park Residences, Seaside Residences, Martin Modern and Margaret Ville.
ADVERTISEMENT
Read also:
Follow Us On
Our Sites
Edgeprop.sg (previously known as The Edge Property Singapore) – is the best property portal for home-seekers, buyers, investors and real estate agents alike in Singapore. On EdgeProp, you will be able to find all the latest news and views, informational guides, historical transactions and rental searches, and research data and analysis.
Whether you are looking to buy, sell or rent apartments, condominiums, executive condos, HDB flats, landed houses or commercial properties, we bring you Singapore’s the most comprehensive and up-to-date property news and thousands of listings to facilitate your property decisions.
Make better decisions with our easy-to-use free and paid tools. The Edge Fair Value tool lets users calculate the fair value of a property and find properties below market value in Singapore. Meanwhile, discover all things en bloc, including Singapore en bloc news, trends and our En Bloc Calculator, which helps to determine the probability of a Singapore project being put up for collective sale.
Web Version 4.4.72
Aside from that, EdgeProp also offers a market trend tracker that lets you access historical property data, sales volume and compare how similar properties are selling, a heat map that lets you find out where all Singapore’s most popular property sales locations are, a HDB lease tool that lets you calculate your HDB tenure, an affordability calculator, and a property watch list to track your preferred Singapore property by project or location, as well as new launches.
On the lookout for undervalued property or buying to rent? EdgeProp’s powerful search filters let you personalise your property-seeking experience – whether you are looking for a property near MRT stations, amenities like schools and childcare centres, or a good-value condo with a sea view – so that you find exactly what you are looking for.