SINGAPORE: The en bloc sale scene in Singapore is witnessing a remarkable upheaval as residents of The Tanamera condominium grapple with three unsuccessful attempts at collective sales.

This has left many feeling skeptical about the en bloc process, especially as each attempt requires unity among diverse ownership interests.

The chairman of the condominium’s collective sales committee, Pooba Mahalingam, mentioned the ongoing struggle to achieve a consensus.

While some residents are eager to relocate, others appreciate their location, which boasts proximity to Tanah Merah MRT Station, accessible hawker centres, and a vibrant wet market.

The situation becomes even more complicated when many units are occupied by tenants rather than owners.

"Owners are hesitant to participate unless they see a high percentage of commitment from their neighbors. Comments like 'I'll sign when we hit 70%' make collective agreements frustratingly elusive," Mahalingam stated, emphasizing that a lack of decisive action hinders progress.

For a successful collective sale, the requirements are steep: properties under 10 years old need at least 90 percent support from owners, while those older require 80 percent agreement.

These high thresholds have left many potential sales languishing.

Divergent Views on Valuation

Another aspect complicating the situation is the varying opinions on property valuation.

Recent data shows that private housing prices surged by 3.9 percent in 2024, raising concerns among homeowners about their ability to find comparable replacement properties post-sale.

"With the escalating replacement costs, owners are reluctant to deviate from their expected sale price," remarked Mr. Lee Sze Teck, a senior director at Huttons Asia, underscoring the financial tightrope owners must walk.

Some developers are already retracting their offers—Roxy Square, a freehold mixed-use development, has cut its reserve price for a collective sale from S$1.25 billion to S$1.12 billion, a sign that market realities are forcing adjustments.

Developers Face Steep Challenges Ahead

Experts are raising alarm bells about the viability of fresh investment in the collective sale market.

A drop in the availability of new private properties, coupled with more favorable loan conditions, might encourage some developers to venture into redevelopment.

However, the overall high entry price for collective sales raises serious concerns among these developers regarding future market performance.

Nicholas Mak, chief research officer at property portal Mogul.sg, pointed out that a staggering 80 percent of private housing units sold last year originated from the Government Land Sales program—indicating a preference for risk-averse investment.

With ongoing cooling measures from 2023 such as increased buyer's stamp duty—20 percent for Singaporeans and a staggering 60 percent for foreigners—the market's dynamics have shifted dramatically, limiting potential foreign demand.

"Without the luxury of foreign buyers, developers are likely to play it safe and focus on government land sales," Mak stated.

What Lies Ahead?

In conclusion, the en bloc landscape in Singapore is fraught with challenges, as both homeowners and developers navigate rising home prices and shifting economic policies.

Will developers find the courage to invest in the en bloc market, or will they continue to retreat to government land sales amid fears of market instability?

As tensions mount in the Tanamera and across the island, one thing is clear: the future of private home prices hinges on the decisions made today! Stay tuned for more updates as we track this evolving story in the city-state's real estate saga!