Too many deals, too few en bloc lawyers.
En bloc lawyers are having to turn down deals because their plates are full. Such is the renewed fervour in the residential collective sale market, a contrast from the past couple years when few deals were launched and even fewer succeeded.
Yet, the queries from eager sellers keep coming. Besides the eight en bloc deals (including one industrial property) worth S$3.5 billion that were awarded this year, and another seven that have been launched, market talk is that there are still about 50 to 60 under way, in various stages of completion. Many are still at the gestation stage, some as premature as still forming their sales committees.
There is also an urgency to the task at hand, a rush to catch demand at the early point of the market upturn before prices surge too high.
Lawyers are not the only ones whose phones are ringing off the hook as the collective sale market reheats; consultancies and property marketing agents are getting it, too.
The marketing agent's role is to guide the sales committee through the process of setting a reserve price, securing the 80-per- cent consensus, as well as in the apportionment and distribution of sales proceeds.
Also, despite all the talk of an en bloc fever, not many sites are sold significantly higher than their initial guide prices. So far, the exceptions are only Rio Casa (28 per cent higher), Eunosville (17 per cent higher) and Serangoon Ville (16 per cent higher).
Yet another potential beneficiary down the road is property agents. ERA Realty key executive officer Eugene Lim says that they will likely reap the benefits when owners vacating their homes seek a replacement or investment home with their newfound wealth.
But this will take time, as the money only rolls into sellers' pockets four to six months after the date of award. The project still has to obtain regulatory approvals from the Strata Titles Board and High Court.
When asked if the en bloc market this year will beat 2007's record of 88 deals worth S$11.5 billion, most analysts say it is unlikely, but next year bears watching.
Adapted from: The Business Times, 4 September 2017