Casa Sophia, a District 9 freehold development along Sophia Road, has reduced their reserve price by $6 million in a bid to try and secure a collective sale. The owners of Casa Sophia has previously put up the site for en bloc sale on the heels of the property cooling measures in July.
The Collective Sale Committee of Casa Sophia had previously listed their reserve price as $36 million.
The site’s exclusive marketing agent ERA Realty Network said that the 12-unit property was relaunched for collective sale by private treaty, after most of the owners agreed to a lower asking price of $30 million or $1,158 psf per plot ratio (psf ppr).
Located in an exclusive locale, the District 9 freehold, 12-unit development sits on 12,327.9 sq ft of land and consists of only three-bedroom units measuring 1,152 to 1,453 sq ft each. Under the Master Plan 2014, the site is zoned “residential” with a gross plot ratio of 2.1. It can be rebuilt into an estimated 34 units at 753 sq ft per unit.
Located in District 9, Casa Sophia is 350 metres away from Dhoby Ghaut MRT station. It is also near reputable educational institutions such as Saint Margaret’s Primary School, Nanyang Academy of Fine Arts, LASALLE College of the Arts, School of the Arts Singapore and Singapore Management University.
“It wasn’t an easy decision for the owners as many of the them lived here since the project was built, but with costs of maintenance increasing due to the age of the building, they felt that it is time. They understood the current market sentiment, hence the decision for the second attempt with a lowered asking price,” said ERA representative Tjhai Citanegara.
“There were a couple of offers that came in during the initial attempt. With its locality and reasonable asking price, we expect stronger interest after the reduction,” he added.
The initial en bloc sale attempt of Casa Sophia happened just a few days after the Government announced new property cooling measures for private residential market.
The Government said the new property cooling measures were necessary to check sharp increase in prices, which could run ahead of economic fundamentals and raise the risk of a destabilising correction later, especially with rising interest rates and the strong pipeline of housing supply.
Some observers said that the en bloc sales market will be dampened by the cooling measures. As developers become wary of end-demand and are hurt by the 5 per cent non-remittable Additional Buyers’ Stamp Duty (ABSD) on land purchase, it is expected to have an impact on their offer prices.
Before the introduction of the property cooling measures, overall private property prices rose across most market segments, with the largest price surge seen in the Core Central Region (5.5%) and Outside of Central Region (5.6%).
As developers’ existing stock continues to diminish and supply of completed homes remain low, many projects especially those in the CCR have raised prices of their unsold units, some by even double-digits this year. Private residential market continued to gain traction with individual re-sellers have also seized the opportunity of increasing their asking prices in light of the more positive market sentiment fueled by the recent collective sales frenzy.
The higher launch prices at some new projects have however slowed the buying momentum in the primary market and sales volume has dipped considerably quarter-on-quarter. While overall sales had slipped quarter-on-quarter, it rose marginally on a year-on-year basis.
How the collective sale attempts of properties like Casa Sophia do, will determine if the Government’s new cooling measures will have a chilling effect in the property market.
Mr Paul Ho, the chief mortgage officer at iCompareLoan said, “the the collective sale attempt of Casa Sophia has been given an impetus with the owners agreeing to reduce the reserve price.”
He added: “Whatever decisions owners facing en bloc sale make, it is better to make it fast so that the sale (or non-sale) can be concluded with minimal delay and maximum benefit to the owners.”
One way is to conduct a Collective Sales Agreement (CSA) as well as concurrently collect a “Non Collective Sales Agreement (NCSA)”, so that once a NCSA reaches 20%, the collective sale process is called off. There is really no point to drag on.
Mr Ho suggested that if one’s home is at risk of en bloc, the owner could consider a home loan where there is no locked-in penalty, but instead entails a higher housing interest rate cost. The next best option is to look for packages with a waiver of locked-in penalty due to sale of property. Such owners may contact a mortgage broker to assist them to find such packages with waiver of locked-in penalty.
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