Executive condos popular among foreigners

The number of foreigners buying resale executive condominiums (ECs) is increasing, pushing prices up to record levels.

According to research and consultancy firm Savills, foreigners, including permanent residents (PRs), accounted for 33 percent of the resale transactions recorded last year. It said that 321 ECs were acquired by foreigners last year, with Indian nationals making up the biggest share, acquiring 296 ECs since 2004, followed by Malaysians with 276 ECs and Chinese buyers with 222 ECs.

This was a huge jump from 18 percent in 2004, when PRs were first allowed to purchase executive condos.

Woodsvale in Woodlands is the most popular area for foreigners, with 138 EC deals since 2004. This is followed by Northoaks (also in Woodlands) and Simei Green condominium.

However, in terms of record price, Bishan Loft holds the biggest EC transaction, when a 1,991 sq ft unit was sold for S$944 psf in October last year.

This trend, coupled with a healthy property market, has driven property values to record levels. The average price of a resale EC unit reached S$634 psf in the first two months of 2011, up 31 percent from the previous peak.

Like HDB flats, ECs are subject to a five-year minimum occupation period before they can be sold to Singaporeans or PRs. After 10 years, ECs become private property and can be sold to foreigners.

Ms Christine Sun, Senior Manager at Savills Research and Consultancy, said foreign interest in ECs is expected to remain strong, as many of them cannot acquire HDB flats, due to the new property rulings.

Many experts noted that ECs are often value-for-money acquisitions, as they are cheaper by as much as 25 percent than private mass-market homes.

“New mass-market home prices have surged to record highs in recent quarters… Resale ECs that are more affordable than mass-market homes offer good alternatives for most of these buyers,” said Ms. Sun.

Mohamed Ismail, Chief Executive of PropNex, also said that ECs are often relatively new and in good condition because most of them are less than 10 years old.

“Most foreigners might have been relocated here and would buy exec condos for owner-occupation, often with a mid- to long-term perspective,” he noted.

Source : Today – 23 Mar 2011

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