Today, the Ministry of Law announced a proposal to review the consent threshold for older condominiums with en bloc plans. The proposal includes decreasing the consent threshold for condominiums that are 40 to 59 years from 80% to 70% while reducing that for condominiums that are at least 60 years old from 80% to 65%. The consent threshold for their younger counterparts is proposed to remain unchanged.

If passed, this change augers well for owners of ageing condominiums. With the decrease in the consent threshold, it would be easier for the collective sales committee of such ageing condominiums to get consent for an en bloc sale, which allows for redevelopment of the site.

Additionally, some older developments may require costly repairs and upgrading works without having sufficient reserves to fund them. As many were also built to lower plot ratios and may not fully utilise the gross floor area permitted under current planning parameters, an en bloc sale could enable these sites to be comprehensively redeveloped, and their land potential better realised.

Collective sale sites can be particularly compelling in mature estates, where opportunities to acquire undeveloped state land can be harder to come by. Redeveloping older projects allows developers to capitalise on existing transport infrastructure, schools, amenities and an established pool of housing demand.

“We welcome the proposal to lower the consensus threshold for older developments, especially those that are 40 years old or older. It will give more ageing estates the opportunity to enter the collective sale market and support the renewal of older neighbourhoods with modern developments. To ensure the success of a collective sale, realistic price expectations, market conditions and developers' appetite for redevelopment opportunities remain the key pillars,” said Marcus Chu, Chief Executive Officer (CEO), ERA Singapore. 

Requiring at least 35% owner support before forming a Collective Sale Committee is a balanced approach. It helps ensure stronger support from the start and reduces the chances of collective sale attempts with limited owner backing.

A shorter signing period will give owners more certainty and reduce long periods of waiting for the outcome. However, it may be more challenging for larger developments, as they need to get more owners to sign within a shorter time, even with the lower consent threshold. Early planning and owner engagement will be even more important.

These proposed changes could mark an important turning point for Singapore’s collective sales market, which last saw a pre-pandemic boom in 2017 to 2018. Some 28 deals worth a combined S$8.7 billion were completed in 2017, followed by another 38 deals totalling S$10.8 billion in 2018.

In addition, while residential GLS sites are typically offered on 99-year leases, the collective sale market provides developers with opportunities to acquire freehold or 999-year leasehold sites and develop products differentiated by tenure.

Together with the recent extension to developers’ ABSD deadline for large developments, this proposed change to the consent threshold could turn the spotlight back to the en bloc market. If passed, we might see more developers’ interest in en bloc developments, especially older condominiums that could potentially yield at least 700 units.

“Lowering consent thresholds for older developments can expand redevelopment options, particularly in densely built estates with little undeveloped land. This approach not only offers an alternative land source but also encourages the renewal of Singapore’s ageing housing stock, unlocking underused development potential and allowing sites to be redeveloped more efficiently according to current planning standards. Over time, such measures could lead to a more vibrant urban environment and a housing supply that adapts better to changing needs,” adds Chu.