Demand for executive condominiums sustainable for now

Demand for executive condominiums (ECs) is expected to be sustained – at least for next year, with property watchers saying there is still interest from a sizeable group of sandwiched-class buyers who are priced out of private apartments.

The Esparina (picture), in Sengkang, is seeing strong response, with 370 units, or more than 60 per cent, of its 573 units sold since it was launched last Friday. The Canopy, in Yishun, the other EC launched last weekend, received about 240 applications by Oct 10 for its 406-unit project. Sales will begin on Saturday.

About three more ECs are expected to be launched within the next nine months in Sengkang and Punggol.

Mr Ong Teck Hui, executive director, Credo Real Estate, said: “The demand for ECs will be sustained. But as to how the individual projects will perform, this will depend on the individual attributes.”

He added that the EC’s “proximity to amenities, proximity to accessibility, LRT stations, MRT stations, individual attributes like views and so forth” would determine if the development would enjoy strong demand.

Analysts pointed out that prices of executive condominiums are about 10 to 20 per cent cheaper than private condominiums in a comparable location.

Property watchers expect a total of about 3,000 EC units to be sold within one year. There is a ready market of key buyers, with some 25,000 newly-weds, looking for their first homes, they said.

Prospective buyers, though, can afford to take their time to shop.

DMG and Partners investment analyst Brandon Lee said: “The take-up rate is going to be moderate – about 40 to 60 per cent in the first two weeks or so. That’s because right now, buyers have a good problem at hand.”

He believes that the fresh supply of ECs coming to the market and the recent softening of HDB prices may prompt first-time home buyers to take their time before deciding on their purchase.

“The government has pledged very strongly that they’re going to come up with 4,000 EC units this year as well as next year. Secondly, I think their selection range has also widened, with the fact that the income ceiling for DBSS projects are going to be increased to $10,000. And thirdly, with the HDB resale prices coming off, first-time home buyers will have another avenue to look at buying their first homes,” said Mr Lee.

Source : Today – 15 Oct 2010

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