More second-time home buyers opting for EC

More second-time applicants appear to be going for executive condominiums (ECs), according to property developers.

That’s because the pool of first-time flat buyers is shrinking due to recently-ramped up supply of Build-to-Order flats.

Prices of the 728 units at a new EC in Punggol – Twin Waterfalls – are likely to start from S$617,000 for a three-bedroom unit and S$823,000 for a four-bedroom unit.

Since applications opened on Friday, it has received some 340 applications as at 7pm on Saturday.

Cheang Kok Kheong, CEO, Development & Property, Frasers Centrepoint, said: “The first timers will probably form about 30 to 40 per cent. These are newly-weds, or about to be wed, or maybe even new citizens, who are coming here for the first time.

“Then the other 60 to 70 per cent will actually be second-timers, people who are wanting to live in a condominium. So they live in a HDB flat, but instead of stepping directly into a condominium, they’ll step into an executive condominium first and get the discounted price because it’s actually cheaper.”

Even though second-time buyers only have a five per cent chance of securing a unit during the balloting process, that’s not deterring them from turning up to view the showroom.

In fact, most people Channel NewsAsia spoke to are second-time applicants looking for an upgrade from their HDB flats.

An applicant said: “What I’m looking forward to is the change of environment, whereby the facilities such as swimming pool, spas, tennis court, gym, are not around the vicinity of the HDB flats.”

With the ramped up supply of public housing and ECs in recent months, analysts had expected a slowdown in demand for ECs among first-time buyers in the second half of the year.

Nicholas Mak, executive director, Research & Consultancy, SLP International, said: “The feedback from the developers is that they are expecting more second timers than first-timers so early into the beginning of this year is a bit surprising.

“One of the possible reasons is that some of the HDB first-time home buyers actually have ample opportunities.

“Another reason is that some first-timers may be very price sensitive, when the economy shows signs of softening or their job security may be under threat, they may choose a more conservative choice, for example delaying their home purchases, or to purchase a cheaper home, such as a HDB flat.

Mr Mak added that the government may want to keep this in mind for its subsequent land sale programmes.

He said: “Earlier, the government has mentioned that it could be pushing out enough land to develop 5,000 units of executive condominiums within a short span of time.

“However, based on the feedback that has been given at the executive condominium showflat is that this pool of first-time home buyers are gradually dwindling because their demands are being met.

“So if the government were to sell too many parcels of land for executive condominiums in the next government land sales programme and subsequent ones, it could actually cause a glut in the market.

Balloting for Twin Waterfalls will start on 18 February.

Second-time home buyers who do not get selected will still get the chance to book a unit from 18 March.

Source : Channel NewsAsia – 11 Feb 2012