Condo Singapore | CDL EC development in Choa Chu Kang

New CDL Condo in Choa Chu Kang

Hot on the heels of the news that foreigners seem to favour resale ECs, is an announcement that there are a number of new ECs (Executive Condos) to be developed within the next few years. Priming for the continued population rise, and considering the property market works in cycles, these ECs might be hot property when they are launched.

City Developments Ltd (CDL) yesterday set a record price – albeit just by a whisker – for executive condominium (EC) land.

The seasoned developer’s bid for the 99-year leasehold plot at Choa Chu Kang Drive has been seen as defending the pricing for an upcoming EC project that it will launch in a few months on a plot that it had clinched last December.

The CDL-TID bid for the Choa Chu Kang plot is higher than the estimates given by property consultants when the site was launched in January – $220-280 psf ppr. Nonetheless, some analysts were not altogether surprised by CDL’s bullish bid.

In December, CDL clinched an EC site at Segar Road, near Segar LRT Station and facing Kranji Expressway, at $270.51 psf ppr. The land parcel tendered yesterday is about 2.2 km away, in a more choice location closer to Choa Chu Kang MRT Station and Lot 1 mall.

‘Basically, they could not afford to have someone bid lower for a better site than what they had paid for their Segar Road site. It makes sense for them to try and defend prices in the area,’ said a developer.

CDL is planning to develop a 602-unit project on the Segar Road plot which it expects to launch around the middle of this year.

Yesterday evening, a CDL spokeswoman said that the scheme for the latest Choa Chu Kang plot involves a project of up to 20 storeys with about 460-470 units. She also highlighted the group’s familiarity with the location, having developed Lot 1 and Guilin View condo.

CBRE Research executive director Li Hiaw Ho estimates CDL-TID’s break-even cost at about $650 psf. ‘In January-February 2011, units in Mi Casa (a 99-year leasehold private condo next door) were sold at around $800 psf.

It is likely that the new EC project can fetch around $700 psf on average, a differential from the price of private condominiums to take into consideration the eligibility conditions attached to EC.’

Cushman & Wakefield senior manager for Asia-Pacific research Ong Kah Seng said: ‘The optimistic price received for the Choa Chu Kang EC site is largely due to encouraging take-up of new EC projects launched in recent months. Buying interest for resale ECs is also encouraging as they’re more attractively priced than private condominiums, reflecting the attractiveness of ECs for an owner who eventually re-sells the home after fulfilling the required occupation period.’

Credo Real Estate executive director Ong Teck Hui said: ‘Since EC prices takereference from private residential prices, bidders must be optimistic that the private residential market would hold or even strengthen going forward. If that continues, there will be that sandwich class of buyers to cater to.

Editor’s Commentary:
If you’re looking to upgrade, these new ECs are great fodder for consideration. And there may be quite a bit of investment potential here since after living in them for a decade, you can sell them in the open market to locals and foreigners alike. Though the property market in 10 years’ time may be a different story altogether, there’s no harm in planning and budgeting ahead – with a nice roof over your head. And since the market for these are tagged to landed property sales, it’s a good idea to keep an eye on updated property news as well.