Property Prices Peaking? Chuan Park - Over 5% below en bloc reserved price
The Business Times reported that the Chuan Park en bloc sale closed with over 5% below it’s reserved price. Originally, this collective sale was listed with a reserved price of S$938million. However, its final sale price is S$890million, over 5% below its reserved price.
Some questions to ponder here. While the real estate market is red hot now, with record prices being set for GCB, HDB and (3BR) condo this year, yet we are seeing Chuan Park’s collective sale closed with below than expected price. Does it mean that either the reserved price was over-optimistically set and/or developers feel that the price of properties are peaking or have peaked, hence not worth paying the current market price now since price is expected to be stagnant or dip?
Of the 9 successful en bloc sales this year thus far, 7 were sold at above or match asking price. Only Chuan Park (>5% below asking price) and Golden Mile Shopping Center (12.5% below asking price) were below asking price. Although having bids below asking price is not uncommon, accepting such bids is rather uncommon. While it is still too early to conclude that property prices are peaking just from this, there are many other indicators in recent news to point towards such a conclusion. Let's see if the price of properties will start to drop in the coming months.