COLLECTIVE sales have rebounded this year and should maintain their momentum next year, but are still unlikely to hit the heights seen in 2007.
Stricter rules, seller fatigue and the bumper supply of state land will combine to restrict the rate of en bloc deals, according to DTZ Research yesterday.
The sector has certainly revived this year, with 34 residential deals totalling $1.47 billion - a stark contrast to last year when the $100.8 million sale of Dragon Mansion was the only transaction.
But it is unlikely that the conditions that produced the watershed year of 2007 - when 136 deals totalling $12.4 billion were sealed - will be repeated, DTZ said.
Compared with 2007, this year's sales were a lot smaller in size as well.
Only one - Meng Garden at $137 million - went for over $100 million while 26 of the 34 deals were done at under $50 million each. These made up almost half of the total value of en bloc sales.
In 2007, 22 properties were sold for between $100 million and $500 million each and four were sold for between $500 million and $1 billion each.
'There was a lot more optimism in 2007 - major global economies and property markets were on a roll and there were fewer Government land sale sites available then,' DTZ said.
As the Government tries to cool the property market, the large supply of land it is offering next year could distract developers from collective sale sites. Many of the Government plots are near MRT stations and in Housing Board estates with a ready pool of demand from potential upgraders.
DTZ said the process of buying a Government site is more straightforward as a project can be launched for sale within six to seven months of a successful tender - a further incentive for developers.
There are also signs that potential sellers are holding back collective sales, particularly in projects that had failed on earlier attempts. Other owners are holding out for higher prices.
But the collective sale market offers a wider variety of smaller and freehold sites that are more digestible for newer or boutique players. Government lots are on 99-year leases and tend to be large.
It helps that the property market is generally optimistic in the light of continued economic growth, said Mr Shaun Poh, DTZ's senior director of investment advisory services and auctions.
'Buyer response to new launches is still positive while developers are still low on land banks and continuing to buy sites. The market has also expanded with newer players joining in,' he added.
The improving appetite for risk has allowed the collective sale market to enter a new phase with potentially larger deals.
A few estates with reserve prices above $500 million, such as Hawaii Tower in Meyer Road, have been launched for sale or are in the process of doing so.
A number of major condominium sites such as Pandan Valley and Kensington Park are now seeking the backing of owners and could be put up for sale next year, DTZ said.