The former HUDC, Ivory Heights, in Jurong East failed to secure the residents’ mandate of 80% to proceed with a collective sale. The reserve price for Ivory Heights was initially set at $1.34 billion. But it has since been revised twice and last stood at $1.68 billion, which meant each owner would have received $2.5 million to $2.8 million if the sale was successful.
Market forces
Analysts cited the cooling measures announced on 6 July 2018 and the postponement of the High Speed Rail (HSR) project to be behind the reasons for the failure.
Price issue
Even with the reserve price adjusted upwards twice, it was still difficult to convince the remaining 6% of residents to sign on the dotted line. Did they waste precious time asking for more and more until market conditions turned unfavourable? We are all too familiar with the saying “Strike while the iron is hot” but yet allow emotions to overrule all rationality. Collective sale committee chair Vincent Ng cited resistance from some residents even after the initial reserve price of $1.34 billion had been raised twice to $1.68 billion. “We were at 74 per cent for the last few months. We just needed another 40-plus units. But the people who refused to sign kept asking for more, and market conditions have changed,” said Mr Ng, 69.
Analysts were not surprised by the steep asking price, given its large land area and location near Jurong East and Chinese Garden MRT stations and the proposed HSR terminus.
“But… you can’t ask for a high price when the unique selling point – the HSR project – is absent for the moment,” said Mr Alan Cheong, senior director of research and consultancy at Savills Singapore.
A bigger issue is higher land acquisition costs and potential penalties for developers following the latest cooling measures, Mr Cheong said.
A developer would have to pay a non-remissible additional buyer’s stamp duty of 5 per cent and a remissible 25 per cent if it can complete and sell the entire project within five years of buying the site.
Ivory Heights’ failed attempt could be a harbinger of what’s to come for other mega sites, analysts said.
Good location
Ivory Heights is situated near two MRT stations; Chinese Garden and Jurong East. It occupies a land area of 825,502 sqft and has views overlooking Jurong Lake Gardens. With the development of the Jurong Lake District as the second CBD, Jurong East is shaping up for more bustling commercial activities and growth in residential housing. The HSR Terminus will also be just a short distance away.
Next En Bloc Attempt
Of course we can’t predict when the next wave will happen. It depends on how fast the the developers’ inventory gets depleted, whether cooling measures are relaxed, prices remain stable and several other factors. All said, it could take another 8 to 10 years before the next wave begins barring any unforeseen circumstances.