Almost all Lake Life EC units sold

At $799 to $930 psf with starting average prices of $685,000 for a 2-bedder to close to $1 million for a 3-bedder, units at the Lake Life EC in Jurong flew of the shelves over the weekend. Only 12 out of its 546 units  were available as of yesterday.

Lake Life ECThe palatable quantum prices of units at the executive condominium (EC) by Evia Real Estate could be the main draw. With a lower loan limit and other cooling measures in place, property buyers are now on the lookout for properties with a lower total selling price rather than focusing on per-square-foot prices. Evia Real Estate has done their homework well, and projected that the deepest pockets of buyers for the Lake Life, according to the demographics of the Jurong district, would be not more than $1.1 million. The pent-up demand for ECs may also have accounted for much of the rush for units in this quickly developing region. The Jurong and Jurong Lake district looks set to be one of the newest and busiest areas for development under the government’s island-wide growth plans.

URA Jurong Lake District

Photo credit:URA

In fact, some of the buyers were originally considering private properties in the area but decided instead to go for the EC options instead. Many saw it as a good investment even though they were purchasing units to live in for the moment. Executive condominiums are a hybrid between public and private property and can be sold after a 5-year minimum occupation period (MOP) in the open market. After 10 years, it will become a private property and may fetch even higher prices.

The other 2 ECs entering the market at the same time are Bellwoods and Bellewaters, developed by Qingjian Realty.

Price reduction at the Lake Life

Just launched not long ago, the latest kid on the block – Lake Life EC in the Jurong Lake district is already offering units at prices lower than its initial estimation. Prior to its launch, the price tag was expected to hover between $880 to $890 psf. But it seems the average is now around $857psf.
lakelife ECThis could be due largely to the loan limits and subsidy caps for executive condominium buyers. Before the cooling measures went into full force last year, prices were much higher as buyers could apply for larger loan amounts. In comparison to its neighbouring private condominium, Lakeville, prices at the EC are much lower. Lakeville units are selling at the medina of $1, 328 psf. Considering the fact that ECs will eventually become private condominiums, which may mean a wider profit margin in the long run. Executive condominiums (ECs) are a hybrid between public and private housing, and buyers can sell them in the market after 5 years, and after 10 years, the development will become a private residential property.

Reacting to the smaller loans which buyers can now receive, developers are adjusting their strategies to offer units prices at a lower quantum prices as compared to lower psf prices. At the Lake Life, 84 per cent of the units have been priced below $1.1 million. A few townships away in Woodlands, and over in the north of the island, the launch of Bellewoods and Bellewaters executive condominiums this weekend may fan the EC fire and buyers will have more fodder for comparison. Prices, expected to be set between $750 to $820 psf, will be competitive. What will buyers be looking out for?

New life at Jurong Lake district

We’ve all heard about the various prestigious “Lake districts” of popular cities across the globe. Now, Singapore could finally boast a few of their own as waterfront living takes on a whole new spin. Sentosa Cove, Marina Bay, Punggol waterway and now Jurong Lake.

Lake Life ECAt the Lake Life EC (executive condominium) in the Jurong Lake district, almost 1,200 applications were registered when it was launched 2 weekends ago. And with one in three applicants being a first-time home buyer, it shows the demand for and power of these hybrid properties. An EC is sold under the HDB scheme but after 10 years, it becomes private property, making it value for money in the long run.

Though EC buyers may qualify for the HDB grants and subsidies, it largely depends on their income ceiling, which has been raised to $12,000 per household. Prices of these flats are also considerably higher than other HDB flats, new and resale.

As the price gap between private homes in the city centre and city fringe continue to narrow, and as suburban private properties rise in price, ECs may become the property of choice for growing households and young couples. How the scale tips may eventually affect the effectiveness and purpose of this hybrid property. Are ECs here to stay? Or could they possibly become obsolete?

EC options widen with new launches

Property market activity may be back on track as new EC launches inject some much-needed cheer. Bellewoods executive condominium in Woodlands just opened for applications last weekend. And this is after a year-long hiatus with the last major EC launch of Skypark Residences in Sembawang last September.

Bellewoods ECUnits at the Bellwoods were going at an average of $750 to $820 psf and industry experts are expecting prices to go up as construction and land costs increase. A change in policy earlier this year, with the authorities placing a 15-month time frame between the time a developer secures a land plot and the time they can begin selling. At the Lake Life executive condominium in Yuan Ching road, prices are expected to hover between $880 to $980psf. There is also worry that buyers who had originally intended to purchase an EC unit may by the end of 15 months, have received a pay raise and thus moving above the income ceiling which disqualifies him from being eligible to apply for one.

But despite these obstacles, developers remain ositive about the market response as pent-up demand may bring the crowd back despite the seemingly quiet market of recent months. There will also be another round of EC launches planned for the second quarter of 2015. Although there may be more options available, an oversupply seems unlikely as the government has reduced the supply of EC land this year. For the HDB upgrader, ECs now seems like it is truly fulfilling what it set out to do, to fill the gap between public and private housing.

Private property out of reach for HDB Upgraders?

If home prices are falling, most would think that the upgrade from public housing or HDB flats to the private home market should be getting easier. But it seems the opposite is true.

Prices of HDB flats and a private condominium apartment are perhaps softening at around the same rate, or that of HDB flats possibly even quicker. This creates a widening price gap between resale HDB flats and private condominiums, and HDB sellers can no longer depend on the sales proceeds of their HDB flats to balance out the price of their new private condominium.

BellewoodsECPhoto Credit: Bellewoodsec.com

Does this also mean that more HDB flat owners will now be forced to stay put and thus decrease the number of HDB flats available in the resale market? What about those who may have already purchase a private property and have a limited time period within which to sell their HDB flats? WIll they be pushed to sell at lower prices hence suffering the growing amount they need to top up?

Property experts are expecting ECs or executive condominiums to be the bridging properties between these two markets. As a hybrid between public and private housing, buyers qualify for public housing subsidies but after a 10-year period, can sell their units as private properties.  There is also the question of home sizes, will HDB upgraders be willing to settle for lesser space and a higher psf price to make the leap from HDB to private home?

More vacant EC units left in the market

Executive Condominiums (ECs) used to be the cream of the public housing crop. But now, one in eight EC units are left unoccupied in the market. What are the reasons behind this change?

Belysa Executive Condominium in Pasir Ris is not yet available on the resale market for foriegn purchase. But it will be in 10 years' time.

Belysa Executive Condominium in Pasir Ris.

One of the main factors could be the increasing number of completed units whose owners have yet to renovate or move into. Some of these EC developments include Esparina Residences in Sengkang, Belysa in Pasir Ris and Riverparc Residence in Punggol. ECs are particularly attractive to young families as they are poised to help them move in the private property market eventually. A hybrid between public and private housing, buyers of executive condominiums are able to utilize the public housing grants for the initial purchase, and after 10 years, the property becomes privatized and owners can then reap the profits from selling the units in the private property market.

There are also a number of home owners who have purchase units to make use of the public housing grants they are eligible for, but do not yet need to live in them. They may opt instead to rent out their units after the 5-year minimum occupation period (MOP).

As the overall property market weakens and the HDB resale market remains flat, HDB upgraders who may have planned for a move are finding themselves unable to find a buyer for their existing flat, thus have yet to move into their new ECs.

Is the EC market softening? And will it continue to do so? Currently vacancy rates are at 6 per cent according the URA figures and thus far 739 units have been left vacant. What does this signify for 2014 as the year makes its way into the last quarter?

ECs not so easy for buyers

Executive Condominiums (ECs) were first launched at the turn of the century, and these hybrid property types had legs in both the public housing and private property sectors. This scheme was launched by the Housing Development Board (HDB) thus buyers can apply for various government grants and loans. After an ownership period of 10 years, they will become private properties and their investment value more often than not, increases, some rather significantly too.

Their main purpose was to help HDB owners move into the private property market, especially the “sandwiched” class who are unable to afford private properties but yet do not qualify for HDB flats, and ECs quickly gained momentum in the first decade of the 21st Century as buyers found the space they received, the governmental benefits and the potential long-term gains a boon. In 2010, the revival of this sector created a huge rise in quantity and prices of ECs.

Sea Horizon Executive Condominium.

Sea Horizon Executive Condominium.

Even though executive condos are still popular to date, the tighter loan curbs mean those who are unable to receive HDB grants and have to take private loans are now only able to receive up to 80 per cent of the price of the property and have their loans capped at 30 per cent of their gross monthly income. With prices of ECs coming up to the $1 million mark and beyond, this has largely reduced the number of eligible buyers, not forgetting that there is a $12, 000 monthly household income ceiling for EC buyers.

Upcoming EC launches in Woodlands and Sengkang will be a good gauge of market response and affordability of units. Should the price points be right, there may not be a lack of buyers. Currently, there are still remaining unsold units at ECs such as Skypark residences, Waterwoods, Forestville, Twin Fountains, Sea Horizon, Ecopolitan and The Tampines Trilliant.

Dual-key units not forgotten

In fact, property developers are still building a number of dual-key apartments in new suburban condominiums despite its decline in recent months. These 2-entrances, 2-keys units are not very common though they can be found in some executive condominiums (ECs) and larger private suburban condominium developments. But they have appealed to large, multi-generational families.

For executive condominiums (ECs), only families who qualify as a multi-generation family as follows can apply:

  • Married couple with parents/grandparents
  • Fiance and fiancee couple with parents/grandparents
  • Widowed/divorced with children and parents/grandparents

SantoriniIn the private property sector, there are no such restrictions and those who are hoping to reap some profits from rental will find them particularly attractive. But the large size of these dual-key units may be an indirect reason for its fall in sales volume since the introduction of property loan limits. Home buyers simply are not able to afford the high quantum prices these units demand.

So far, dual-key apartments have been prominently featured in up to 8 private residential developments and now more than half of the condominiums with more than 400 units include dual-key units in their midst. Some of the more notable launches with dual-key apartments available for sale are:

How will these large condominium units fare in the later half of this year? Will it be a battle between the small shoebox apartments and larger rarer units?