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?

New home sales up in February

After much news about home sales taking the hit, a rebound has brought some cheer to February.

Mainly lead by new suburban property launches, analysts are hoping that this is a sign of the market stablising. Excluding sales of executive condominiums, the Urban Redevelopment Authority released data showing a 28 per cent rise of private home sales of 724 units as compared to January’s 565 units.

2 launches in the Sengkang area, Rivertrees Residences and Riverbank @ Fernvale, made up majority of the sales. 218 units of the 495-uni Rivertrees Residences were sold at a $1,111 psf median while 211 units were sold at the 555-unit Riverbank @ Fernvale at an $1,033 psf average.

Rivertrees condoThe future however may lie in the hands of the property developers. Depending on their pricing structure and strategies, the buying public may respond correspondingly. Some older projects with units yet unsold, as well as resale units may find themselves competing intensely with lower-priced newer properties. But if recent sales are anything to go by, finding the sweet spot that hits home with pocket-conscious home buyers will bring the crowd back into the market.

Buyers who are looking for a good deal may find themselves searching for less salable units in older projects which may still be worth the investment depending on their location and potential for future development. March may be the turning point of this delicate dance between buyer and developer. What will the month show in terms of sales volume and prices?

Homes, homes, homes galore

204,461 in 2016. And a good lot of it will be in the private property market. The number of HDB flats remain the same but there will be an increase in the number of private properties and executive condominiums (ECs) come 2016. One might question if Singapore really does need that many homes or is it a case of having enough homes but at prices not many can afford?

Forestville Executive Condominium.

Forestville Executive Condominium.

In 2013 alone, 15, 824 private homes will be built come end December. In the public and private hybrid housing (EC) market, the number this year is 1,659 and counting. Over the next 3 years, buyers can expect 1, 355 executive condominium and 4,884 new private properties to enter the fold. Sales of private residential homes have already begun to dip, will this increase in supply signify a further price drop over the next 3 years? Or will the supply glut dissipate quickly and redirect interest into the resale and rental markets?

Sales of new properties plummeted 46 per cent with only 2,430 units sold in Q3. 1,340 resale units were sold, at a 35 per cent drop. Overall, private property prices still rose though at only 0.2 per cent. Most of sales came from suburban condominiums. City centre home prices dropped 0.3 per cent but city fringe homes suffered a 1.1 per cent decline.

But despite recent lulls, a rise was registered in the rental front, at an increase of 0.2 per cent . Has the make-up of Singapore’s population shifted, with a larger percentage of temporary residents or has the population’s property purchasing habits changed and more are willing to simply rent rather than purchase a permanent home? Which way is the nation headed and are we becoming more like the bigger cosmopolitan cities in the world?

204, 500 properties to be completed by 2016

At 6,508 more units than the 197,566 units projected earlier this year, there will be 204,500 executive condominium and private apartment units built by 2016, according to data released by the Urban Redevelopment Authority (URA).

Completed condominium units are increasing in number as developers pour fresh new stock into the market mix. Despite having held back on some major launches as the year-end lull draws close, the number of properties available in the market continues to rise. Industry experts are however expecting developers to lower their launch prices in order to boost sales.

The CreekFrom the looks of the recent Inflora condominium launch, selling prices, of new properties at least, may indeed be on the slippery slope. But that perhaps might be good news for those looking to invest. Properties in the prime city centre spots are dropping by as much as 0.5 per cent whereas city fringe and suburban areas enjoy continued growth, however slight.

Over the next 3 years, 4, 884 more private homes will be built as National Development Minister, Mr. Khaw Boon Wan considers it “making good progress in our ramp-up of the home-building programme”. The number of HDB flats to be built will remain the same as projected. 1, 355 executive condominiums will be ready within the same time frame. What does this heightened supply mean for Singapore’s housing market and will the population growth be a reflection of a cause of this increased property growth?

Triple the Subscription at Skypark Residences in Sembawang

506 units at Skypark Residences Executive Condominium (EC) in Sembawang, and 1, 604 applicants. That’s more than triple the number of units available.

This new EC will feature a 1, 250 sqm Skypark 50 meters above ground. Nothing to rival that of the Marina Bay Sands of course, but as high-rise living becomes more the norm than the exception, having a piece of greenery of your own might be more precious a commodity in the near future than you think. Applications came mainly from HDB upgraders and larger multi-generational families.

Skypark Residences ECPerhaps the possible lack of new EC projects in the few years to come have driven buyers to jump on this last opportunity of 2013 to upgrade. Created as a stepping stone for HDB owners into the private property market, executive condominiums have become a rare public-private housing hybrid which has immense potential especially since it becomes a private property after five years and owners can then sell to foreign buyers after ten years. The projected number of new EC launches in 2014 is two.

But there’s still time yet. Bookings will open on 16 November. Prices are expected to range between $720psf to $800 psf. Will more be wiling to bet their chances at applying for an oversubscribed executive condominium in a quiet neighbourhood or purchase a ready-to-live unit in a completed or almost completed suburban condominium? Are long-term benefits on the minds of property buyers or are short-term capitals what they are gunning for?

New Suburban home launches

It’s an exciting time for the suburbs as three new launches make their entrance, most of them in the North.

Nine REsidencesYishun welcomed a new mixed-use property, Junction Nine and Nine Residences. The residential units are selling at an affordable $1, 070 psf. The options are plenty, with 495 sq ft one-bedders to 700 sq ft two-bedders, 915 sq ft three-bedders, 1,001 sq ft four-bedders and 1, 173 sq ft four-bedders. Bigger units such as a 1,367 sq ft five-bedder and 1,550 sq ft duplexes are also available. Though the retail units were the best sellers here, as investors see their potential as residential properties rise in price but not necessary in sale numbers. Also, retail properties are able to skirt around the additional buyers’ stamp duty which has deterred some.

$400,000 one-bedders are available at The Inflora, a 395-unit condominium on Flora Drive. If it’s a dual-key apartment you’re looking for, here’s where to look as well. These units are often rare and hard to come by, thus if you’re looking for one for your extended family, it might be a good time to snap one up.

The Venue ResidencesIn Potong Pasir, there is the mixed-use development, The Venue Residences. There is a range of 495 sq ft one-bedders and bigger units to 2.142 sq ft penthouses. It will only be launched on Friday and prices are expected to hover around $1,450psf.

E-applications for executive condominium (EC) Skypark Resiences in Sembawang has also opened last weekend. Could this launch detract some from going for private condominiums?