Executive Condominium take the market

Closing the year on a high note for developers, were the latest EC launches in the market, in particular the Lake Life EC in Jurong.

Only 412 private condominium units were sold in November, while more than double the number of EC units were sold at 855 at last count. This could be partly due to developers’ decision to hold back on new condo launches and the pent-up demand for EC units.

Bellewoods EC533 units at the Lake Life executive condominium project were sold at an average of $869 psf. Comparatively, the private condominium Lakeville sold 30 units at $1, 374 psf. Over at Bellewaters EC in Sengkang, 170 units were sold, followed by 79 units in Bellewoods at Woodlands. The only new private property launches last month were TRE Residences and Sophia Hills Residences which sold 52 and 9 units respectively.

Could this response be a sign that buyers’ affordability range is narrowing and many prefer the opportunities and subsidies public housing options provide? Or is it merely a knee-jerk reaction to the pent-up sentiment of holding back new EC releases for almost 7 years in the Jurong district? What does this mean for the private property market and are ECs proving more competition for the private market than expected?

Private resale property woes

Have buyers of private non-landed properties decided to take a hiatus? November’s sales figures for private resale condominiums seem to indicate a widening gap between buyers’ and sellers’ price expectations.

With the tough loan limit still in place, the number of buyers for private properties have shrunk, much more so for resale units. Some buyers could be holding back as they wait for newer launches or are simply wary about jumping onto the bandwagon too early as industry analysts have predicted a tipping of the supply and demand scale in the next couple of years.

RIse OxleyResale properties in some districts have however fared better, some selling up to $80,000 above the valued property price. In the prime district 9, buyers have responded positively to properties in the Cairnhill, Killiney, Leonie HIll, Orchard and Oxley areas. And far out in the western district 22 comprising of Boon Lay, Jurong and Tuas, the average above-valuation price buyers have been willing to fork out was up to $30,000. At the fringe of the city, in district 11 of Chancery, Bukit Timah, Dunearn and Newton, prices went to approximately $15,000 above the market value.

So it seems that despite  announcements that properties in the city centre may be loosing its clout, the recent  numbers seem to indicate otherwise. How are the suburban resale sector responding to this shift? Are they shifting their preference to public housing options such as executive condominiums?

Lake Life EC in Jurong attract first-time buyers

Unlike its counterpart in Punggol, Lake Life EC in Jurong have been attracting mostly first-time applicants. Buyers at The Terrace executive condominium in Punggol were mainly HDB upgraders.

Lake Life ECEven the developer, Evia Real Estate, was surprised by the large numbers of younger Singaporeans. About half of the 534 buyers were first-time HDB unit buyers. Perhaps partly driven by the pent-up demand for ECs, especially in the Jurong district, as Lake Life is the first EC to be built there in 17 years; and also drawn by the promise of an estate rejuvenation with lakefront living and new amenities. Top that off with governmental subsidies for couples living near their parents, it is not surprising most of the buyers were already living in Jurong or the nearby HDB estates such as Bukit Panjang, Bukit Batok and Clementi.

This could signify a shift in buyers’ minds about the industrial and out-of-the-way Jurong of before. It has continuously added amenities and facilities to its midst, including libraries, schools, shopping malls and regional business headquarters.

Most of the buyers were below 40 years old and the average combined family income was $9,042. To qualify for a housing subsidy ranging between $5000 to $30,000 from HDB, the combined household income must not exceed $12,000. Perhaps this points to a new breed of home seekers and property buyers. Will private property developers eventually work to suit their needs and demands and close the gap between public and private property sectors?

EC peasy weekend breezy

If the crowds at the latest executive condominium (EC) launch were anything to go by, the property market may look a little cheerier. Despite many buyers being out of town and the upcoming busy holiday season, response to The Terrace EC in Punggol was heartening. 100 units out of the 747 were sold over the weekend alone. The Terrace launched on Sunday with prices starting at $710 psf for a three-bedder.

The TerraceMany of the buyers were young families and HDB upgraders as the options for mid to larger-sized units were available. The average unit size range from 1,001 sq ft for a three-bedroom unit to 1,711 sq ft for a penthouse unit. Other executive condominiums previously launched saw a slower weekend, but that could be due to the usual year-end lull and the fact that most units have already been selected and sold.

Location remains the main draw, though the EC sector is looking more positive than the private property sector. The other executive condominium developments which recently went on sale include The Lake Life, Bellewoods and Bellewaters. Joining The Terrace in Punggol will be the The Amore EC which is targeted to launch in January 2015. As competition heats up within the same district, buyers may have a wider range of options and prices may also adjust accordingly.

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.