There are 2,446 vacant executive condominium (EC) units in the market, according to first-quarter figures from the Urban and Redevelopment Authority (URA).
These are completed units which have not been sold, or units which are purchased but left unoccupied. This could be due to EC buyers needing more time to move in. However, analysts also said that there are buyers who do not intend to live in the units.
ECs typically attract HDB homeowners who want to upgrade their homes. They make up about 50 per cent of those who buy ECs. Under HDB rules, these upgraders have six months to sell their existing flats, after collecting the keys to their new units.
But analysts said that with declining HDB resale prices, more EC buyers are taking longer to sell their flats, and this is pushing up the vacancy rates.
Mr Colin Tan, director of research and consultancy at Suntec Real Estate Consultants, said: “The HDB resale market has sort of come down and some of these owners have difficulties selling. Some of these owners are unwilling to let go at what they perceive as below-market prices and so they probably appeal to the HDB for an extension.”
HDB said it received a total of 56 extension requests from EC buyers last year – working out to an average of 14 requests per quarter. But in the first three months of this year alone, it has received 29 such requests.
URA numbers showed that the vacancy rate in the EC market has been creeping up in the past year. Although there was a dip in the fourth quarter of 2014 – from 16.2 per cent to 11.5 per cent – it has started picking up again in the first quarter of this year, to 15.1 per cent.
As most of the EC projects have been fully sold, property firm Century 21 said that the rising vacancy rate also suggests that the EC segment is attracting investors.
Said Mr Ku Swee Yong, CEO of Century 21 Singapore: “We also sense that there are many who are investors in ECs, they are not buying the ECs because they want to live in it. They are buying the ECs for probably a financial investment motive and having taken the keys. They are probably still staying with their parents or they are staying elsewhere and they are not moving in.”
ECs are developed and sold by private developers, although buyers can receive a grant of up to S$30,000 per household. These properties become private housing after 10 years, and can be sold to foreigners.
Source : Channel NewsAsia – 28 May 2015