The number of Executive Condominiums (ECs) left vacant significantly increased from around 726 units in Q1 2014 to about 1,634 units in Q2 2014, according to Urban Redevelopment Authority (URA) figures reported in the media.
This translates to a vacancy rate of 12.2 percent, or more than twice than the first quarter’s vacancy rate of six percent.
However, this does not mean more people were purchasing EC units but have no plan of living in it, said consultants. They noted while some people might have purchased EC units ahead of their needs, those buyers account for only a small segment.
“There may be a minority of people who buy an EC (unit) not because they need a roof above their head but because they want to make use of housing grants,” explained Nicholas Mak, research head at SLP International.
This type of buyer prefers to live elsewhere since EC projects are mostly located on the outskirts, said Mak. They may also opt to rent out the unit following the five-year minimum occupation period.
However, consultants note that Q2’s higher vacancy rate could be primarily due to the increased supply of newly completed EC projects.
Notably, EC projects completed since mid-2013 include Belysa in Pasir Ris, Esparina Residences in Sengkang and Riverparc Residence (pictured) in Punggol.
“For new EC completions, the owners are in no hurry to move into the newly completed flat,” said R’ST Research director Ong Kah Seng.
The weak HDB flat resale market may have also contributed to the increased vacancy rate.
“It could be that some upgraders have not sold their HDB flat yet to move into their EC (flat),” said Desmond Sim, research head at CBRE.
The URA calculates the vacancy rate by looking at a smaller sample of EC units instead of every single unit islandwide. The vacancy figure includes both unsold and sold EC units that are already completed. As at end-June, there were no unsold completed EC units.
Image source: Qingjian Realty’s website
Muneerah Bee, Senior Journalist at PropertyGuru, edited this story. To contact her about this or other stories email muneerah@propertyguru.com.sg
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