Higher future demand for ECs?

Recent news of the income ceiling for new HDB and ECs (executive condominiums) flats possibly being raised have brought about a wave of questions from the market. Will this increase competition for new BTO flats? How will the resale HDB flat market be affected? Will the private property sector see lower or higher demand?

Since ECs and mass market private homes often go after the same pool of buyers, raising the income ceiling for ECs may mean increasing competition for the latter. With the higher income ceiling of $14,000, buyers who were previously ineligible for executive condominiums may now find themselves able to purchase these unique public-private hybrid properties, drawing them away from the private property market.

Sol AcresECs are considered public housing and buyers are able to take advantage of available housing grants for this property type. After 10 years, they become private property, which considerably ramps up their sale value. Buyers who have previously had to turn to private properties at much higher prices, and who are now eligible to apply for ECs will no doubt be in glee. The difference between an EC and a private property is about $300 psf and buyers comparing private homes and ECs in the same vicinity may come up with savings of up to $250,000. Not an amount to be scoffed at.

One recent EC offering, Sol Acres, have since sold 294 units. Upcoming EC launches are expected to give pricier private mass market homes without the calling cards of a good location, a run for their money. Prices of ECs usually stand at around $800 psf whereas private homes go from $1,000 psf and up.

 

Raised Income ceilings for HDB and EC flats

In the months ahead, the HDB market may see some significant changes.

In his National Day Rally speech on Sunday, Prime Minister Lee Hsien Loong announced a raise in income ceilings for new HDB flats as well as ECs (executive condominiums). The income ceiling for HDB flats could be raised from $10,000 to $12,000 and for executive condominiums, from $12,000 to $14,000. Just four years a, the income ceiling for ECs was raised to $12,000 but apparently income levels have risen since then. The government are also making it easier for lower-income households to purchase 2-room flats. The Special Housing Grant (SHG) will be raised from $20,000 to $40,000, giving them the financial support they truly need.

Forestville Executive Condominium.

Forestville Executive Condominium.

And to promote stronger familial ties plus cater to the growing group of young families who prefer to live near their parents, a new Proximity Housing Grant will help buyers who wish to live near their parents or married children secure their new flat.

This could be good news for buyers and home-seekers, as more applicants may then find themselves eligible for a new BTO flat or EC. But will there be more applicants now vying for available units. And how will this move  possibly affect the resale HDB flat market?

 

Private property sales steady

Private property sales seem to be steady in the past months, though there has been a recent spike in July as a new condominium launch pushed numbers up. Post June-holidays sales could also have made up the rise in number of sales transactions, plus some buyers may be rushing to close deals before the Hungry Ghost Month.

High Park ResidencesThe recent launch of High Park Residences in Fernvale performed exceedingly well in July, with 1,169 units sold. The average selling price stood at $989 psf. Property experts put much of their success to their ability to put the finger accurately on the buyer’s pricing ‘sweet-spot’. Smaller units with more affordable quantum prices seem to be the way to go in the current market. A good 15 per cent of the units went for under $500,000 and a 388 sq ft unit even sold at $373,450.

Situated close enough to the upcoming Seletar regional hub, the popular condominium has 2-bedders sized at 570 to 732 sq ft and 3-bedders at 872 to 990 sq ft. Considering a 2-bedder deluxe unit goes for $650,000, prices are more than affordable for the average middle-upper-class Singaporean. Other properties which have sold well last month include Botanique at Bartley, City Gate and Riverbank@Fernvale.

Moving ahead, property analysts are expecting the new property market to quieten slightly, though activity may pick up in the executive condominium (EC) segment.

 

Choa Chu Kang’s Executive Condominium Future

With 11 bids for an EC (Executive condominium) site in Choa Chu Kang, it looks like the estate may be looking at 490 new homes in the next 5 years. The avid response could be due to the huge decrease in land supply this year and the possibility of the government further reducing the supply of land in the next year. In 2012, 6 EC sites were released in the second half alone; whereas this is the only EC site release by the government in the first half of  this year.

The BrownstoneCompared to last year’s EC site sales in Choa Chu Kang, the current site went for lower bids, and selling prices are expected to hover around $800 psf. The previous sites which were sold last March and September last year are however, closer to the Choa Chu Kang MRT Station.

Though there are 7 EC properties waiting in the wings for their big debut, and despite news that the EC vacancy rate was at 14.1 pre cent in Q2, developers are positive about the potential earnings from these public-private hybrid properties and are confident about the uptake. In Q2 alone, there were 2, 232 unsold EC units.

But if sales at last weekend’s launch of The Brownstone EC were anything to go by, the developers have little to worry about. 185 units were sold in the weekend alone, making it one of the most-sold EC launches this year.

 

Weekend in the East – Pasir Ris

It’s almost the weekend. And when we think weekend, the mind often goes straight to the eastern districts with its breezy, relaxed atmosphere and sunny skies. Besides the popular East Coast and Marine Parade hot spots, there are also lots to see and do in the country’s edge of Pasir Ris.

The PaletteIn Malay, Pasir Ris translates to “White Sand” and this coastal town has long be lauded for its tranquility, almost like a secret tucked away in the quietest part of the island. But not to be mistaken for exclusion from the usual conveniences of city living, it is well-served by trains and buses and has a buzzing town centre and a few malls to boot. Add the revamped Lorong Halus Wetland, Sungei Tampines River and Sungei Api Api, Pasir Ris Park and it’s akin to having our own “The Hamptons” of our own. A countryside in an island city.

Private condominium apartments in this area include Seastrand, NV Residences, Coco Palms and The Palette. One of the latest executive condominium (EC) offerings, Sea Horizon, is also in its midst. With the infusion, of these private residential properties in the area, it is not surprising that HDB flats in the area and the surrounding district of Tampines are also gaining popularity with buyers.

 

Lower sales in new private homes market

The lack of new private condominium launches last month could be the main reason for the fall in number of new private homes transactions. That and fresh mentions of the General Elections plus competition from the executive condominium (EC) sector could have siphoned some attention away from the new properties already out there. Sales numbers for new properties were down 42 per cent from May.

Sol AcresDevelopers and buyers may be holding out in wait of political and policy adjustments which may in turn drive prices up or pull them down. Announcements of a slower-than-expected economic growth in the last quarter may have also affected buying sentiments. There could also be a sense of the scale tilting towards supply over demand.

Recent private home launches include The Botanique at Bartley, Lakeville in Jurong. Suburban home sales dropped 48 per cent while city fringe sales numbers fell 23 per cent. July however may prove a happier month with the launch of a number of new properties including The Brownstone, The Vales in Sengkang and Sol Acres in Choa Chu Kang. This long weekend, High Park Residences in Fernvale is also expecting an extension of the 18,000 strong turnout at their show flats in the past two weeks.

The many pluses of a Brownstone

Say Brownstone and most would think of the infamous (and also notoriously expensive) townhouses in America built in the 1800s.

But here in Singapore, a similarly named The Brownstone is a executive condominium (EC) in Canberra Drive. Response however was just as keen as it would have been if it were a brownstone townhouse in New York. Part of the attraction came from its proximity to the upcoming Canberra MRT station. Both the EC and the MRT station are planned for a 2019 completion date. The Brownstone will also feature a unique brown, sandstone-textured facade and jetty-like balconies.

The Brownstone ECThe 638-unit EC received 300 applications over the weekend of its launch and considering how the competition in the EC market has heated up since there are quite a few currently available for application in the market. Prices are expected to start at $599,000 for a 732 sq ft two-bedder to $1.3 million for a 1,711 sq ft penthouse. Other ECs launched recently include Westwood Residences on Westwood Avenue and The Vales at Anchorvale Crescent.

Buyers are often partial to executive condominiums as they are a hybrid between public and private housing, which means government grants can be applied to the initial purchases of these units, and after 10 years, they will become private properties. More often than not, their values would have appreciated by a considerable amount by then.

HDB Resale flats – More affordable now?

Have prices of resale HDB flats reached an acceptable level? Prices and sales volume have been falling, and with the time it has taken for the property cooling measures to sink in, are resale flats now more affordable?

As more executive condominiums (ECs) and Build-to-order (BTO) flats hit the market, owners of existing HDB flats who are upgrading or getting keys to their new flats, in particular second-timers, are pressured to sell their flats within a stipulated time period of 6 months. This, plus the fact that a substantial period of time of steady but gentle decline of resale flat prices may have instilled confidence in buyers who may either see the market as stabilising, with slight or no further chances of price drops.

Bellewaters ECHow much as price really dropped? In a year-on-year comparison, prices have dipped 6 per cent since April last year, and an 11 per cent drop when matched against the peak in 2013. Property analysts are expecting prices of resale flats in non-mature estates to fall a little further of 6 per cent whereas those in mature estates are expected to hold their own for the rest of the year. Three-room and four-room flats also saw a 0.3 per cent price rise while five-roomers and ECs fell 0.8 and 2 per cent respectively.

In the first quarter of the year, the rate of decline in HDB resale flat prices have been the lowest since the fall in 2013, at 1 per cent. This be a signifier of a stabilising market, though 2015 may be the year to watch in terms of future market trends. With the possible General Elections coming up next year, it could also be the calm just before the storm, whichever way the wind blows.