Executive living in Executive Condominiums

Despite the number of new private condominiums out in the market, executive condominiums (ECs) are still one of the more popular property types out there. Being the hybrid property they are, they provide buyers an option that allows them to transition comfortably between public and private property market.

EcopolitanPhoto: Ecopolitan Executive Condominium

Sold as public property, buyers are able to take advantage of the grants provided by the Housing Development Board (HDB). Though income ceilings apply, they have been raised to $14,000 last year and that has possibly opened the door to more applicants. And one of the best parts is after 10 years, ECs are considered private properties and thus increases their inherent value considerably.

Developed and built by private developers, many of these executive condominiums used to be situated in not-so-ideal locations. But as Singapore becomes more built-up, many new ECs are now quite conveniently located, near schools, transport nodes and many other amenities and shopping malls.

BellewoodsECPhoto: Bellewoods EC

Take the Ecopolitan EC for example, it is situated near the Punggol MRT station, Waterway Point, Punggol Waterway Park, Coney Island and just a 20-minute drive away from town. It will receive its Temporary Occupation Permit (TOP) this year and will no doubt inject much life into the Punggol HDB estate.

Another new EC, Bellewoods in Woodlands, can also look forward to being serviced by the upcoming Thomson-East Coast MRT line, with their proximity to the Woodlands South MRT station. Both properties are developed by Qingjian Realty and look set to be some of the more prominent projects in these blossoming estates.

Decrease in property launches next year?

Large fresh batches of completed homes will be entering the market next year, which may in turn increase the supply of available private homes and decrease consumer’s demand. Add the Federal Reserve’s rate hike which was just announced yesterday, the market is expected to remain quiet in 2016. The authorities are picking up on these changes and have announced that they will be holding back on the release of land sites for sale in the first half of 2016.

As most of the completed new private homes flooding the market next year will be outside the central regions, that is 55% in the suburbs, suburban private properties might be feeling the crunch in terms of rental competition and sales volume. The total number of private homes reaching completion next year will be a whooping 22,351. Property experts’ have previously projected the market requirement of only 8,000 to 10,000 new units per year. The numbers have almost doubled over the last 4 years, with a total of 70,000 private homes were launched within this time period. Add public housing and the numbers are substantial reason for worry.

Although the government will still keep the Government Land Sales (GLS) programme going in order to keep the property and construction industry going, they will only be releasing 16 sites in the H1 of 2016. Some of the confirmed sites include a residential site in Sembawang,  an executive condominium (EC) plot in Anchorvale Lane which may yield 640 units, a mixed-use plot in Bukit Batok West and a rare plot on Martin Place near River Valley road. The last of the 4 confirmed sites may be of particular interest to developers hoping to snag a prime plot which could yield potential high-end residential units.

Developers and buyers could also be interested in a few other mixed-use sites, in particular one on Holland Drive.

New home sales up in November

The Poiz Residences near Potong Pasir MRT station sold almost 80% of its 350 units launched last month. Median prices were at $1,440 psf. Elsewhere, newly released units sold at the previously launched Sky Vue in Bishan clocked in at 59 units, with an average selling price of $1,552 psf. Other best sellers include Principal Garden and Thomson Impressions.

poiz-img-001Photo: The Poiz Residences in Potong Pasir
In total, 423 units were sold in November, making it a 79 per cent rise in new private home sales last month. Properties in the city fringes fared especially well, with transactions almost doubling that of October. This could be due to more new developer launches in November as compared to a quiet October.

Thomson ImpressionsMoving ahead, location and selling prices will be the main focus for buyers as most are out for a bargain. Take the executive condominium (EC) market for example, 186 units were sold last month without any major EC launches based on the relevance of ECs and also their attractive pricing. Executive condominiums are a hybrid of private and public housing. Buyers can apply for HDB grants to purchase these properties and after 10 years, they attain a private condominium status, often elevating the value and selling price of the units.

Property analysts are expecting 2016 to be a fruitful year for developer launches which are reasonably and affordably priced, at good locations near MRT stations or schools. Suburban projects might struggle a little as competition with new resale private condominiums (those which have just reach completion) drive supply up.

Local developers setting sights on Overseas property market

Since the implementation of the property cooling measures and a recently dampened local property market, some developers are moving to developing overseas properties in cities where economic growth and demand for certain types of properties provide fodder for potential yields.

London FlatPhoto: Flat in London

Spotting opportunities in countries such as Britain and China, these overseas properties developed by local developers give overseas and local investors alike more investment opportunities and options. China has been experiencing some signs of economic stress with the oversupply of properties, leaving some ‘ghost towns’ in her midst. But in major cities such as Shanghai, where commerce and the international community is strong, the demand for properties remain high. Especially after the government lifted their restrictions on loans and relaxed the rules on foreign purchases, interest and buying activity has increased.

In the city of London and her South Eastern suburbs, prospects remain positive. City Development Limited (CDL) is one of the developers concentrating their efforts on larger projects. They are doing the same in Tokyo despite the seemingly slower economy in Japan, and are hopeful that economic measures taken by the Japanese government will give the real estate sector a boost.

The Brownstone ECPhoto: The Brownstone EC in Sembawang

Locally, the executive condominium (EC) market has had varied results as not all launches were equally well received. The Brownstone EC in Sembawang has sold 289 out of its 638 units thus far, but The Criterion in Yishun has only sold 45 out of its 505 units. Both properties are developed by CDL. With more resale private residential options and new and resale HDB flats available in the market, buyers now have more choices on their platter, and may be taking a longer time to shop for a unit.

Private property market- Volume versus price

Stock of unsold private property units have been falling. At 25 per cent lower this year as compared to 2013, the improving take up rates could be chalked up to pent-up demand from buyers and lowering property prices.

Sol AcresPhoto: Sol Acres Executive Condominium

But the question remains, could sellers and investors expect a quick turnaround next year with profits and rental yields increasing? Resale property prices have dropped 6 to 11 per cent since 2013 and while sales volume has risen, the property rental market remains quiet. In fact, rents have softened this year and with the impending boom in supply of completed residential units next year (including executive condominiums or ECs and HDB flats), the rental market may be facing competition that’s tougher than before.

There are currently more than 300 unsold units the executive condominium (EC) market in projects such as Sol Acres, The Criterion and The Terrace. Developers of these and other private projects with unsold stock might be pressured to move these units next year as some may face restrictions such as the Qualifying Certificate penalties and the Additional Buerys’ Stamp Duty (ABSD). The latter not only affects developers, but also buyers who are also further restrained by the Total Debt Servicing Ratio (TDSR).

The PanoramaPhoto: The Panorama

Prices of developer-sold new properties have already been on the decline this year. At The Panorama in Ang Mo Kio, prices fell fromr $1,343 psf to $1,226 psf within 10 months. Similarly in Sims Urban Oasis, prices have dropped $112 psf to $1,285 psf in 9 months.

2016 begins in less than a month, and everyone will be keeping a keen eye on the first quarter for the tone it sets for the year ahead.

Maxing the potential of HDB Housing Grants

The General Elections of 2015 have brought about some changes in the local housing and property scene. With raised income ceilings for new flats and executive condominiums, plus a series of other adjusted or new housing grants, more HDB flat applicants are able to now secure a unit and at less by making use of these new grants.

HDB flats 10The new Proximity Housing Grant provides singles and families who are buying a resale flat with or near their married children or parents, with a respective $10,000 and $20,000 grant. Since its implementation on 24 August, 684 families and 53 singles have applied for the grant. Income ceilings have also been raised to $12,000 (from $10,000) for families and $6,000 (from $5,000) for singles. This means more would qualify for a HDB flat and the respective grants, possibly allowing some applicants who may have previously fallen just short of the income ceiling to now successfully apply for a unit.

Indirectly, this move may have also helped to boost resale transactions. As applicants who wish to live near their parents or married children may not be able to find a new flat within close proximity, especially in more mature estates where new flats are rare, resale flats may be their next best choice. With a combination of the Proximity Housing Grant and other CPF housing grants, what they may finally have to pay for a resale flat may be much more palatable.

Demand for EC units slowing down

The Executive Condominium (EC) market seems to be facing some resistance from buyers. The pricing sweet spot in recent launches of Signature @ Yishun and The Criterion seem to be around  $750 to $780 psf respectively.

The most recent public housing policy changes include a higher income ceiling of $14,000, up $2,000 from the previous $12,000 for ECs. This may have an effect on the crossover pool of buyers who may well be able to afford private condominiums and may weigh in their options between both housing types. 20 per cent of the buyers for Signature @ Yishun fell within those with monthly household income above $12,000. Though more significant impact probably comes from the Mortgage Servicing Ratio and other loan restrictions.

Signature@YIshunThe Criterion is a 505-unit development built by City Developments and Signature at Yishun, a 525-unit project by JBE Holdings. That may also have thinned out the demand a little, as both are situated in Yishun and there are many points for comparison. Buyers may also be holding out in wait for the massive 12,000-unit BTO launch in November.

Although the sales may not be as fast and furious as before, with units being sold out within the launch period as buyers now tend to take their time in making comparisons and coming to a decision, the response will still be comparable.

Upcoming EC launches buyers can look forward to include Wandervale in Choa Chu Kang Drive and Parc Life in Sembawang.

The Criterion EC in Yishun

One of the latest executive condominium (EC) offerings certainly meets quite a lot of criteria for a good property. The Criterion EC in Yishun, jointly developed by City Development Limited and TID private limited, is set to yield 505 residential units by 2018.

TheCriterionThis new EC will feature units will range from two- to five-bedders and exclusive penthouses which offer scenic views of the golf course at Orchid Country Club or the Lower Seletar Reservoir. This new development will also offer flexi-units which allow buyers to select a room configuration that best suits their needs. Plus, a high percentage of the units will also have the optimal north-south facing orientation which most home owners look for to avoid the heat from the rising and setting sun and also allows for natural ventilation.

Its location also puts it in close proximity to the Yishun MRT station and bus interchange, the up-and-coming Northpoint City and a good number of schools, not to mention the Yishun Sports stadium and Sports Hall. Medical facilities in the vicinity include the Khoo Teck Puat Hospital and Yishun Community Hospital.

Buyers looking to book a unit can first view the show flat daily from 10am to 7pm, located near at the end of Miltonia Close. They will also be interested to know that The Criterion is the first EC to offer a microbubble spa from Japan aside from the range of more than 50 facilities promoting varied lifestyle activities such as yoga, cycling, swimming, starlight dining and community farming. How’s that for a modern living microcosm for you?