CHALLENGES FOR COLLECTIVE SALE
While a lack of new supply of private developments and more favourable loan interest rates for potential buyers may feed developers’ appetite to build more, the price to pay for a collective land sale could prove too much for them, said experts.
They flagged concerns from developers about the initial purchase price, as well as the costs associated with redevelopment and the potential market for new units.
Mr Nicholas Mak, chief research officer at property portal Mogul.sg, noted that 80 per cent of the private housing units sold in the market last year were from the Government Land Sales programme under which state land is released for private developers.
The remaining was from the private land sale market.
Cooling measures introduced in 2023 have reduced investment demand from foreigners and caused pause for Singaporeans considering buying more properties, which will make it riskier for developers to invest in such land acquisition, said Mr Mak.
This is because the developers have to gather enough sales to complete and sell a development after acquiring the site within five years.
Singaporeans must now fork out 20 per cent in additional buyer’s stamp duty for a second property if they are still holding onto their first. For foreigners, this figure is 60 per cent.
“If (developers) can’t count on foreign demand, for example, it’s going to cause them to hesitate to buy en-bloc sale land,” Mr Mak said.
He noted that developers are likely to continue to go down the Government Land Sales route, as supply is being ramped up.
