Proposed lower consent thresholds could revive en bloc market, but boom unlikely: Analysts
With a shorter time to get the required number of signatures for a collective sale, this might heighten tensions among neighbours who are not keen to sell, said an analyst.
Proposed changes to Singapore's collective sales law could potentially revive the en bloc market, but analysts believe a full-scale boom is unlikely. Lowering the required consent thresholds from 80% to 70% for developments aged 40-59 years, and 65% for those aged 60 years and above, aims to encourage redevelopment of aging private housing stock. However, success will depend on developers' appetite, acquisition costs, and realistic pricing.
Moham Sandrasegeran, head of research and data analytics, noted that securing the final portion of consent can be challenging in larger or older estates, even when the majority of owners support redevelopment. Singapore's en bloc market has been subdued since peaking in 2017-2018, with only six transactions in 2019.
Older freehold developments and those with well-located 99-year leases are most likely to attract developer interest. Currently, over 360,000 private non-landed residential units are below 40 years old, while 20,000 are above 40 years. Of these older developments, about 40% are located in Districts 9, 10, and 11, which could increase the chances of successful en bloc sales in areas with limited Government Land Sales.
However, analysts caution that the lower thresholds alone will not trigger a broad-based en bloc boom. Factors such as developers' comparison of collective sale sites against Government Land Sales opportunities, lease top-up premiums, development charges, demolition costs, and lease extensions will continue to play a significant role.
Written by urgent.news from Channel News Asia's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
