If you have been keeping a close watch on the realty market the growing frenzy over collective sales wouldn’t have escaped your watchful eyes.
The questions that are doing the rounds at the moment are – how long shall the craze for collective sales last and is it the right time to sell your property en bloc?
There are contradictory signals that you would get from the market.
On one hand the developers are sitting over a huge war chest and not letting the opportunity to pick up a well-located old development slip by.
On the other hand, you see reports of around 10 en bloc bids not having met desired results and more than 20 sites that had no bid.
But if you ask the realty experts en bloc deals that don’t see positive result from unrealistic expectations of the owners.
They see a positive mood in the market and cite the tremendous Q1 that we have already see in the collective sales market this year and expect billions of dollars’ more worth of transactions taking place by the end of it.
In case you are in dilemma over taking the collective sales route or need convincing arguments to swing the opinion of fellow owners here are some of the reasons why it is the perfect time to sell your property en bloc.
There has been a craze of sorts for collective sales since 2017 with most developers having sold their existing inventory and looking for future acquisitions.
To quote some dollar figures market figures suggest that collective sales for the first quarter in 2018 have already touched over S$8.2 billion according to property consultants who keep track of the market.
The amount will only go up as there are more en bloc sites launch and sold this coming months.
2018 has begun on a stellar note as we have seen some big budget buy so far.
Noteworthy among them are Pacific Mansion that was picked up by a consortium that included GuocoLand, Hong Realty and Intrepid Investments for a whopping S$980 million and Tulip Garden that bagged S$906.9 million acquired by Yanlord Land Group and MCL Land.
Talking about residential properties alone while 2017 saw 27 sites being sold for $8.7 billion, the first quarter of 2018 has already witnessed $8.2 billion for 25 properties.
And market experts see this as just the tip of the iceberg and expect new records surpassing the $11.51 billion record set in 2007 prior to the global financial meltdown.
The craze for collective sale is factored around the belief that these sales tend to earn sellers more than the prevailing prices for such properties in the market.
Since a site at an attractive location holds great promise for the developers they don’t mind paying a premium over the existing prices when they have the chance to have their hands on it.
Market estimates suggest that you can pocket 70% premium or even more for your property when it is part of a collective sale and have more bargaining power as compared to selling it to an individual buyer.
Market watchers believe it is the most opportune moment for collective sales as the demand generally follows a 10-year cycle.
This hypothesis is backed by historical data which shows that the craze for collective sales comes every 10 years or so.
The unsold inventory among developers at its lowest level since the start of the decade as the demand for property has shown healthy growth over the last couple of quarters.
With the government not too keen on GLS (Government Land Sales) the only way for developers to augment their land banks and invest their profits is on Collective Sales.
This cycle is expected to run through 2018 after which most developers having amassed huge land banks and not be in need for much more for a decade or so.
Developer are continuously scouting for potential sites to be redeveloped and this is having been substantiated by the increase in the number of properties that are being picked up in collective sales.
What is contributing to this further is government’s reluctance to raise the supply of GLS to avoid demand and supply mismatch in the next few years.
With no new fresh land banks being released developers have no option but to look for collective sales to increase their land bank.
With the property market expected to heat up in the next few years developers are willing to bet big.
If the dollar figures we have just mentioned above have opened your eyes wide open brace up for something more exciting.
According to Cushman & Wakefield, developers in Singapore are sitting over a war chest of S$18.9 billion which they expect to invest in the near term.
And this too is seen as a conservative estimate as this only takes into account the profits from their finished projects.
It is estimated that developers have pocketed around S$90.5 billion from the projects completed between 2014 and 2017 as existing units are being sold thick and fast with the market seeing an upsurge in sales.
Keeping in mind that 70% standard leverage from their existing projects developers would have another S$45.3 billion stashed in their hands to be put into the market.
2017 witnessed recovery of property prices after three consecutive years of fall and it is expected that the prices and demand for properties is expect to soar in the coming years.
This can easily be sensed from the excitement among the developers to increase their land bank through collective sales. Savills Singapore’s Alan Cheong expects a healthy 5% increase in the prices of properties and expects the trend to continue till 2020 and beyond. Tracy Goh of PropNex Realty predicts an increase of more than 10% in real estate prices in Core Central Region.
To conclude, en bloc sales offer you the chance to leverage maximum equity out of your existing property and this window may fast close if you don’t take the initiative now.
Get started with a Collective Sales Committee and appoint a Marketing Agent Right Now. Cash in on this frenzy.
PropNex Realty Singapore is Happy to offer this En Bloc Services
Contact Us Today and be the next millionaires.
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In the on-going realty boom in Singapore, the number of realty agents in a company is often seen as the best example of company’s reach and prowess. And going by the head count of agents there is a new leader in the bloc.
PropNex Realty has just claimed the throne of being the largest property agency in Singapore. With 6,688 agents it has edged past ERA Realty which had held the title so far. Interestingly this development comes after more than 80% of the agents at DWG (Dennis Wee Group) crossed over to PROPNEX Realty post the recent merger between the two. The company which has already been foraying into the international market sees this as a significant event in its journey.
As per the latest data released by the Council for Estate Agencies, PropNex’s headcount of agents swelled to 6,688 going past ERA Realty whose head count stood at 6,176. ERA Realty had been the reigning king for quite some time now and the latest development is being seen as a momentous event in the local realty market.
This is the latest merger in a series of such agreements that we have witnessed being signed in the recent times as the industry braces up for more consolidations. However, what is interesting in this merger is that there has been no transfer of equity between the two firms and neither has there been a dollar value assigned to the deal.
The nearly 7000 agents are expected to take the company to greater heights as it already enjoys good reputation in the market. The team which has always focussed on delivering excellence is seeing this major shot in the arm.
After the MoU was signed between DWG and PropNex both of which are home grown agencies 845 out of 1,063 agents formerly associated with DWG have given their consent to the PropNex Associate Agreement.
According to a statement released by the official spokesperson of PropNex close to 88% if DWG’s active salesmen who were in the S$50,000 or more earning bracket have switched over to the company post the merger.
The spokesperson further added that with respect to the remaining 218 agents who haven’t signed the deal there had been no transactions with 105 salesmen over the last 12-month cycle and hence they would be accounted as inactive. The number of agents who didn’t consent to be a part of the transfer stood at mere 113, most of whom would continue to work with other agencies.
Ismail Gafoor, CEO of PropNex seemed spirited having been able to retain most of the active agents who had been associated with DWG prior to the merger. He said that once the news of the merger started making rounds in the market many PropNex’s competitors did everything possible to lure the agents to join their team but PropNex still managed to retain 88% of the active salesperson which is testimony to the fact that the agency has been providing with the best opportunities for the salesperson to grow.
He added that PropNex has the ecosystem that supports agents and it will ensure that the new agents who have joined the team would be provided the best of support and opportunities.
PropNex has always come up with initiatives that help it in maintaining an agile workforce that understand the pain point of the customers and help them find the best properties within their budget. The new agents joining its team would undergo the same intensive that have helped in create a seasoned team of realty professionals who have been delivering results for the company in the last decade.
Lead by a visionary management team the company has always invested in creating a world-class and winning team which has helped the company grow and take giant strides towards expanding the business in the international market.
The company has been offering a wide range of services and solutions to the market that include developing business strategies, consultancy, market support, innovative technologies and training to its clients as an end-to-end solutions provider in Singapore’s realty market.
It has streamlined its operations to meet the changing aspirations of the homebuyers and complements it with comprehensive after sales support to ensure clients have a pleasing experience at all stages of property buying. Its commitment of providing dedicated services to its clients has helped them company create a distinct competitive edge and earned accolades from its customers.
The company’s commitment to excellence has made it an unstoppable workforce. It isn’t focused on realty business alone or in the idea of profiteering but s committed towards making important contributions towards the development of the community. It is empowering youngsters through education and has also been involved in several charity projects and has lent its support to important causes that have brought about meaningful change to the lives of thousands of ordinary people.