The executive condominium market is expected to see more activity with the launch of new EC projects over the next three to six months.
Four new projects in Punggol Field, Buangkok, Compassvale Bow and Yishun that can yield about 1,400 units are set to launch in the next three to six months, while another five EC sites at Punggol Drive, Jurong West, Tampines, Elias/ Pasir Ris and Segar Road, yielding another 2,600 EC units, will be sold by the government later this year.
Executive condominiums are staging a comeback following a five-year hiatus as the government ramps up supply for middle-income homebuyers, said CB Richard Ellis (CBRE). It added that the comparatively less expensive pricing of ECs is likely to attract many HDB upgraders.
“Given the tender bid prices for the residential sites in recent months, developers are not likely to reduce prices of the new private homes. HDB upgraders looking to buy affordable new homes can look to the new supply of EC units within the next 12 months. Assuming the historical 30 percent gap between private suburban homes and new ECs remain, median prices of new ECs are likely to stay around $650 psf to $750 psf. The prices of ECs will match those of comparable private apartments in the same locations after five years, as they will be treated as private properties,” said Li Hiaw Ho, executive director of CBRE Research, in a press release.
The non-landed, private home market is currently attracting a lower percentage of HDB upgraders than in 2009, with only 36.1 percent of private non-landed new home purchases in Q2 this year.
The share of HDB upgraders hit 63.6 percent during the peak in Q1 2009 but it has fallen below the 10-year average of 44 percent.
In H1 2010, the share of HDB upgraders of non-landed private homes stood at 36.9 percent, compared to 45.4 percent in whole-2009.
“With the steep rise in prices of new private homes, more HDB upgraders face a bigger burden of servicing huge mortgage loans. The lowering of the housing loan limit from 90 percent to 80 percent since March this year also meant that HDB homebuyers need to pay more cash upfront. Despite this, potential HDB upgraders can find a less costly alternative with the upcoming Executive Condominiums,” said Mr. Li.