Analysts said demand for executive condominiums (ECs) is expected to remain healthy in the second quarter.
This despite economic uncertainties and a wider selection of new housing projects available.
Executive condominium projects like Watercolours, located at Pasir Ris, continue to be a strong crowd puller.
When first opened for applications in May, it was two times oversubscribed where more than 800 applications were received.
Booking started on Friday, and within the first six hours, nearly 20 per cent of the 416 units have been snapped up, mostly by HDB upgraders.
Prices for a unit at Watercolours averaged between S$560 and S$750 per square foot.
Buoyed by the good response, the developer is setting its sight on more EC projects.
Watercolours is developed by Huge Development, a joint venture between Ho Lee Group, UE E&C, GPS Alliance Development & Investment and EVIA Real Estate.
Jeffrey Hong, CEO, Global Property Strategic Alliance, said: “For this year, everyone knows there are maybe two or three more sites coming. I guess prices will continue to be bullish because land prices don’t come cheap, acquisition of land, we will continue to look at EC because it is pretty healthy and it is also sustainable.”
Analysts said demand for EC units is likely to hold up.
For the first quarter, there were 432 caveats lodged for new ECs islandwide.
And they expect a roughly similar number for the second quarter. There were about 292 caveats lodged so far in the second quarter.
Chua Yang Liang, head of research, Southeast Asia, Jones Lang LaSalle, said: “They cater to a specific group but there are some buyers basically those in the peripheral, in this case maybe the five-room (flat) buyers, they may consider choosing between buying an EC and a five-room flat. There’s about 1.6 persons chasing after one five-room flat in the month of May (under the BTO). So on that basis, EC may still see some support.”
Group CEO of ECG Holdings Eric Cheng said: “In general, EC prices in terms of psf have risen compared to the past. EC prices are now about 16 to 25 per cent lower than private condos. I think it will stabilise.”
For the rest of the year, market watchers expect EC prices to remain fairly stable at between S$680 and S$750 per square foot on average.
But there’ll be some downward pressure on prices in the event of an economic downturn or should the government introduce more cooling measures.
Special Advisor at HSR Donald Han said: “In the worst case scenario, the first segment that will be affected is the mass market private residential properties. If mass market prices fall from an average of S$950psf to S$850psf. Then you may see some buyers crossing from EC to mass market because the price point has narrowed.”
Source : Channel NewsAsia- 1 Jun 2012