Sales of ECs expected to remain healthy

Sales of executive condominiums (ECs) are expected to remain healthy, despite a ramped-up supply this year.

Some 3,000 units from land sold previously will be released this year, and the government plans to release land for another 5,000 units.

Market watchers and developers believe ECs remain an attractive choice for buyers due to the higher income ceiling, from S$10,000 to S$12,000, and substantial price gap between public and private housing.

A healthy crowd checked out the latest executive condominium launch – the Rainforest in Choa Chu Kang – on Thursday afternoon.

Applications opened on Thursday and will close on January 9.

With an expected price tag of S$720 to S$730 per square foot (psf), the 466-unit development is more expensive than an earlier project in the area.

Blossom Residences in Bukit Panjang, launched in July 2011, was going for S$685 psf.

Rainforest’s proximity to Choa Chu Kang MRT station and Lot 1 shopping centre is a draw.

One prospective buyer said: “It is actually the location, it is really good, because it is very near to the MRT station.”

The developer – a joint project between City Developments Limited and TID Pte Ltd – is confident of strong sales.

Aside from location, the adjustment in income ceiling to S$12,000 has opened up the pool of eligible buyers.

Jack Chua, CEO of Hersing Corporation and marketing agent for Rainforest, said: “If you look at this EC pricing, (it) is lower than private condominiums in this area…and yet, this EC has full condo facilities. In 10 years time, this EC will have same status as a private condominium.”

He also pointed out that “most of the ECs that are launched are either fully sold out, except a recent launch, which is about 80 per cent sold out. So the take-up rate is very fast.”

The Rainforest is the first of several EC launches in Singapore this year. And it is part of the government’s assurance to first-time home buyers that there will be sufficient supply in the housing market. ECs are an alternative to the most basic Build-To-Order flats, but are priced higher for their condo-like facilities.

Market watchers expect demand to remain fairly strong in the first half of the year, but warn of oversupply in the second half.

Nicholas Mak, executive director for research and consultancy at SLP International, said: “The plan to launch enough land for 5,000 units is very aggressive. Because bear in mind, in the past, the supply of EC is roughly 1,000 to 2,000 units a year. If the government were to put all this EC land on the confirm list, sold regardless of any interest from developer, this could lead to a potential glut in the EC market.”

Other EC launches expected this year include projects in Tampines, Punggol, Pasir Ris and Yishun.

Source : Channel NewsAsia – 5 Jan 2012

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