Demand for executive condominiums (ECs) has remained buoyant, with another such private-public housing development receiving a robust response at its opening weekend.
The 380-unit Lush Acres in Sengkang by City Developments was oversubscribed by about 1.6 times as of Sunday, the developer said yesterday.
The announcement followed the launch a week earlier of Ecopolitan in Punggol by Qingjian Realty, which received more than 1,000 applications for its 512 units.
Analysts TODAY spoke to said the rising cost of private homes has contributed to the popularity of the relatively more affordable ECs.
Data from the Urban Redevelopment Authority has shown growing sales of ECs in recent months, peaking at 457 units in May before moderating to 313 last month.
“When prices of mass market condominiums go beyond a certain level, ECs become a good option for people to upgrade their houses at an affordable price,” said Mr Nicholas Mak, Executive Director for Research and Consultancy at SLP International Property Consultants.
“ECs have the features of condominiums and typically are priced at S$700 to S$800 per square foot, which is about 30 per cent cheaper than private condominiums,” he said.
ECs can also enjoy capital appreciation as attractive as that of a private residence, according to Ms Christine Li, Head of Research and Consultancy at property firm OrangeTee.
“The price gap between mass market private property and the EC has widened, which makes ECs a better choice. From what we see with ECs that were launched in the 1990s, when they turned private after 10 years, their value can be as close as 5 per cent to a mass market condo,” she said.
She added that, with the prices of mass market private residences or those in the suburban areas not likely to decline in the near future, the appetite for the hybrid private-public homes will continue to be strong.
“The land cost for mass market private condos has gone up by 30 to 40 per cent in one year … and if you work out the figures, you can see that the price of new launches will not go below S$1,000 per square foot,” Miss Li said.
Three more EC developments are in the pipeline and will be launched by the end of this year. They are Sea Horizon in Pasir Ris, Waterwoods in Punggol and SkyPark Residences in Sembawang.
Another two sites were sold under the Government Land Sales programme in May, but the winning developers are only allowed to launch units for sale 15 months from the date of award of the sites, or after the physical completion of foundation work, whichever is earlier.
Source : Today – 17 July 2013