Cooling of en bloc market expected this year with new measures on floor space, stamp duties

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Developers and buyers are likely to be more cautious in an en bloc market that had ended 2022 on a higher note relative to the pandemic-stricken years.

this year, with the introduction of new control measures, along with economic uncertainty and geopolitical tensions.and a new rule on calculating a property’s gross floor area that reduces the space developers can sell, will impact the market, said analysts.

Some residential deals that did not go through include Kensington Park, which was listed for sale at more than S$1 billion dollars, and Loyang Valley, which was priced at S$980 million dollars.Economic uncertainty, higher borrowing costs and further cooling measures that held back activity last year are expected to continue in 2023.

“For collective sales, because the reserve price had been set … in a time where this new ruling had not been taken into account, developers will have an issue trying to reconcile the higher reserve price vis-a-vis lower saleable areas that they will be faced with," added Mr Cheong.may also shy away from en bloc deals, due to a recent requirement to wait 15 months after a sale before they can buy a resale flat.

“Right now, they are not able to unless they fulfill certain conditions, then they might actually resist the wholesale itself,” he said.

 

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