Le Arc Apartment off Geyland Road is up for collective sale again with a reduced reserve price of $18.5 million. Exclusive marketing agents ERA Realty Network who announced the relaunch of the en bloc sale said the new price translates to around $847 per sq ft per plot ratio (psf ppr), or $792 psf ppr inclusive of the 7 per cent bonus balcony area and estimated development charges of $150,000.
The owners of Le Arc Apartment had in October 2018 placed their reserve price in the range of $20-22 million for the en bloc attempt.
Le Arc Apartment situated at 6 Lorong 26 Geylang is expected to net its owners $1.6 million to $1.8 million if it is successfully sold en bloc. Le Arc Apartment, a four-storey building with 12 apartments, sits on a 7,859.9 sq ft site zoned for residential use, with a gross plot ratio of 2.8 under the Urban Redevelopment Authority’s (URA) 2014 Master Plan. It also has an allowable height of eight storeys, subject to URA confirmation.
The redevelopment of Le Arc Apartment could potentially yield 22 to 25 apartment units.
The tender for the property closes on May 8 at 3.30pm.
The first en bloc sale attempt of Le Arc Apartment happened after the effects of Government announced property cooling measures for private residential market were kicking-in.
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.
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.
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