Resale price of non-landed properties in districts 15 and 10 have risen significantly said Edmund Tie & Company‘s (ETC) caveat analysis of URA Realis data. The price increase which includes the Katong and Amber Road areas follows news of the Amber Park and Royalville en bloc sale last year.
The caveat analysis considered resale transactions in the 2017-2018 period and compared deals before and after the two collective sales (excluding outliers). The analysis notes that transacted prices at Mandarin Gardens have gone up by an average of 12 per cent since the Amber Park deal – suggesting that developments at en bloc attempt stage are also enjoying higher premiums.
The data analysis showed that resale prices of larger units in the market have seen a bigger price hike compared to smaller ones. The demand for bigger home is being driven by cash-flush individuals and families who have successfully sold their homes en bloc.
Resale prices are also being pushed up by sellers increasing their asking price to benchmark it against higher lands bids in the areas. The shrinking pool of available units in the districts is another reason for the resale price increases in the districts. Some owners in the vicinity have withdrawn their listings in anticipation of a collective sale.
Edmund Tie’s senior director and head of research Lee Nai Jia said: “Based on feedback from agents, those who sold their homes through collective sales are forming the bulk of demand in the secondary market, especially if they need a home that they can move into immediately.”
ETC’s caveat analysis found that since the en bloc sale of Royalville last year, the unit per square feet resale prices for 42 freehold projects in District 10 have risen by about 7 per cent. The story is almost similar in District 15. Since the collective sale award of Amber Park on Oct 4, resale prices of 46 freehold projects have risen 5 per cent on average.
Royalville, near Sixth Avenue MRT station, was sold en bloc for a$1,960 per sq ft per plot ratio (psf ppr), while Amber Park was collectively sold at $1,515 psf ppr.
JLL senior consultant Karamjit Singh said: “The Amber Park and Royalville collective sales were instrumental in an upward re-rating of land values in their respective areas. So what we are seeing is a trend of resale prices playing catch- up with anticipated prices at which new homes are going to be marketed in these locations.”
The chief mortgage consultant of iCompareLoan.com Paul Ho believes that such upward resale price surge for non landed properties may not hold true for cheaper estates or districts. Such properties will have lesser branding for developers to do their markups, Mr Ho said.
“If you want to build a ‘Landmark’ project, you pay a good price for the land, you will also need a similarly remarkable ‘Brand-able’ district in order to hype it up for a larger resale price,” he added.
Find out what makes an En bloc sales process work.