Mr Lawrence Wong, Minister for National Development, made a couple of comments on the recent enbloc trend in the Parliament yesterday. Below are some of the extracts from his comments obtained from various newspaper sources:
- The spike could be due to how more developers are keen on replenishing their land banks given the fewer number of unsold units in the market, said Mr Wong
- Mr Wong said the unsold supply has dropped from about 40,000 units in 2012 to some 17,200 units as of the third quarter this year
- The successful en-bloc sales last year could have also contributed to the increase this year, encouraging more owners of ageing residential projects to initiate the en-bloc sale processes to monetise their assets, added Mr Wong
- Mr Wong pointed out that the collective sales may not necessarily lead to higher sale prices in the market
- The developers are also required to meet stipulated conditions or face additional buyers’ stamp duty (ABSD……That will put some pressure on them to sell at reasonable price, within a five-year time frame, said Mr Wong
- En-bloc sites that are taken off the market will eventually be put back into the supply in the next one to two years, thus moderating the prices, Mr Wong noted
- The government continues to monitor closely the overall property market trends very closely and would take appropriate actions to maintain a stable and sustainable market, Mr Wong reiterated
What would be your thoughts after reading all the above comments given by Mr Lawrence Wong?
Well, it seems that the government is taking a soft stance towards the current state of en-bloc trend at this stage. In particular, Mr Wong is ‘justifying’ the trend by mentioning on the currently low unsold supply. Mr Wong was also trying to ease the concern of rising home prices by arguing that prices are subject to supply and demand and not solely on land price. In addition, Mr Wong seems to be hinting that there is still sufficient safeguard, such as the ABSD, in place to penalise developers and keep prices in check.
In summary, SPK thinks that there is one key message that Mr Wong was trying to tell everyone:
“Don’t worry. Everything is fine (for now). Keep calm and carry on (while the government is watching).”