Market watchers and analysts are still studying the impact of proposed changes to rules governing en bloc sales

Market watchers and analysts are still studying the impact of proposed changes to rules governing en bloc sales unveiled in Parliament on Monday.

Some say the revision will benefit property developers as it means greater clarity and certainty to their initial investment.

Owners of Neptune Court at Marine Parade are exploring an en bloc sale.

And insiders tell Channel NewsAsia, that so far, only about 40 per cent of owners are lending support to the move.

And unless they can get another 40 percent to say yes before the changes kick in, a later bid at a collective sale will have to comply with stricter rules.

S K Phang, Lawyer, Phang & Co, says: “Some people might say look hey it’s going to cumbersome, we got to comply with the new requirements, let’s quickly sign, so that may have that positive effect, so it might reach 80 per cent. So when the new rules come into effect, you’ve already reached your 80 percent and the rules don’t apply any more.”

Phang & Co is currently handling a few of such cases and a few others that have achieved the required consent.

Its lawyers say the en bloc market has already become less heated due to the increase in development charge and current volatility in the financial markets.

Industry insiders say some speculative investors who’ve paid deposits for potential en bloc units have allowed their options to purchase to lapse because they no longer see the potential to cash in on the en bloc frenzy.

According to some analysts, the proposed changes to rules governing en bloc sales will indirectly benefit developers or buyers.

This is because they can be more sure of the deal going through, once it is inked.

But they say it’s unlikely to affect the pricing or demand for future deals.

Nicholas Mak, Consultancy & Research Director, Knight Frank, says: “The demand for en bloc sales sites is actually a derived demand. It depends on developers’ sale of their projects, redeveloped projects. If the sales of developers’ projects are going well, developers will need to replenish their landbank, there by increasing the demand for en bloc sales. So, I think that the amendment is not likely to affect the demand but rather the market on the whole. The property market on the whole will be a greater determinant of the demand for en bloc sales.”

Others believe once the market has adjusted to the new rules, it will be positive for all parties in the long term. - CNA/ch

Source : Channel NewsAsia - 28 Aug 2007