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THE collective sale fever that gripped the property market over the last 12 months is fast showing signs of cooling down, as the market nears saturation for such deals.

Lacklustre home prices in suburban areas and an oversupply of collective sale sites in prime districts are combining to dampen developer demand for such sales, property consultants said.

Of the more than 50 sites that were put up for collective sale between January and last month, at least 20 were unsuccessful in their attempts. Many owners of such properties are now negotiating to sell the estates more cheaply.

For example, Haig Gardens in Katong was put up for sale in February at $50 million, but received offers of at least 5 per cent less.

Owners of The Albany in Thomson Road and Charlton Gardens in Kovan have also not found buyers willing to meet their asking prices.

Their predicament is the flip side of the situation earlier this year, when developers were paying record prices for choice sites in an attempt to snare the most coveted ones. This spurred a rush by home owners to put their estates up on the market.

But not all sites are equal in the eyes of developers.

Like the three sites mentioned above which are each about 50,000 sq ft, the bulk of still-unsold estates are located outside the prime areas of districts 9 and 10 and sit on relatively smaller plots of land.

This reduces their appeal to developers because home prices in non-prime areas have mostly stayed flat.

Historically, rising home prices have been the main driver of collective sale demand, said Knight Frank's head of investment sales, Mr Foo Suan Peng.

He added that outside the prime areas, developers are only willing to fork out for larger sites. The 218,435 sq ft Amberville in Katong and the 809,037 sq ft Waterfront View in Bedok, for example, recently sold at a higher-than-expected $183 million and $385 million respectively.

Even in the prime districts, where luxury home prices are skyrocketing, an oversupply of sites is putting the brakes on the collective sale frenzy.

Consultants said sales in these areas are likely to slow as the choicest sites have already been snapped up and developers have plenty of land in their land banks.

Around 30 collective sale deals have been signed so far this year to the tune of some $3.5 billion, compared with 36 sites and $2 billion for the whole of last year.

'Most developers have already laid their hands on the sites they want in the prime areas,' said Colliers International's director for investment sales, Mr Ho Eng Joo. 'The number of developers looking at the remaining sites is definitely decreasing.'

For instance, Mr Simon Cheong's SC Global has said it has replenished its land bank and now holds more than 800,000 sq ft of land. It bought Hilltops Apartments and Paterson Tower earlier this year.

'The market has already reached a saturation point for en bloc sites, especially for those in prime areas,' said Ms Tang Wei Leng, director for investment advisory services at DTZ Debenham Tie Leung.

This could be why even well-located sites like Balmoral View in Balmoral Road and Far East Mansion in River Valley Road are finding it hard to close a deal, consultants said.

But some collective sale hopefuls in the central area may still strike gold, said Credo Real Estate executive director Tan Hong Boon. 'Prime sites are still finding two or three potential buyers,' he said.

Horizon View at Cairnhill Road received three bids when its tender closed last week and is expected to announce a deal this week.

Developers like City Developments (CDL) said they are still keen on sites that are 'well-located and have good redevelopment potential'.

'Our strategy remains to purchase sites at the appropriate time, for the right purpose and at our desired price,' said CDL group general manager Chia Ngiang Hong.

fiochan@sph.com.sg