Singapore ‘En-Bloc’ sales tumble after latest property restrictions

Sales of Singapore’s residential investment property plunged after the latest round of housing restrictions put the brakes on “en bloc” redevelopment deals.

Just two redevelopment sales worth $353 million ($256 million) were completed in the third quarter, down from $3.8 billion in transactions in the previous quarter, according to data compiled by Cushman & Wakefield Inc. That pushed total real estate investment sales down 42 percent to $6.5 billion last quarter.

“The collective sales market has been decimated after the recent cooling measures,” said Christine Li, head of research for Singapore at Cushman.

Borduri Bite property

Investment residential sales fell 72% after the restrictions in July

Cushman & Wakefield Inc.

Private house prices rose at their slowest pace in five quarters after further restrictions were imposed. The government took action in July to cool the housing market after a steep rise in prices in the first six months of this year.

The rebound in prices after a four-year slide has fueled aggressive land bidding by developers, leading to an explosion of “en bloc” sales — in which a group of owners band together to sell entire blocks. Under the new rules, the government has increased its buyer’s stamp duty surcharge to 30% for developers, making it more expensive for them to redevelop older properties.

Commercial and industrial property helped support investment sales. Office sales rose 54% to $2.1 billion last quarter, and industrial property transactions rose 73% to $1.2 billion.

“Clearly, these two sectors have emerged as winners from the recent effects in the residential sector,” Li Cushman said. Both commercial and industrial property will continue to attract interest in the near term as liquidity remains high and developers seek diversification, she said.

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