It’s an EC world

Executive condominiums are some of the hottest properties on the buying public’s radar this year. These rare hybrid private-public homes straddle the 2 markets in the best way possible. While they begin their journey as public housing, thus allowing qualifying buyers to make use of government subsidies and loans to secure a usually cheaper-yet-comparable alternative to private condominium units, they graduate after 10 years to the private property market and their values more often that not appreciate considerably.

WandervaleECOne of the first ECs to be launched this year include Wandervale and The Visionaire. The Parc Life will soon be launched. Even though the nearby 1-327-unit Sol Acres EC might have been competing for buyers , 320 out of the 534-unit Wandervale EC in Choa Chu Kang has been sold.  Most of the units popular with HDB ugpraders and young families were the 4-bedders. 82 were sold in total. Prices averaged at $755 psf with a 3-bedroom apartment starting at $655,000 and the larger 4-bedders going for more than $896,000.  The Wandervale’s proximity to the Choa Chu Kang MRT station could have added to its popularity.

Besides The Parc Life, other EC launches in the works include Treasure Crest in Sengkang, Northwave in Woodlands and another in Choa Chu Kang.

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.

Waterfront living in public housing 

Not only do exclusive private mansions, bungalows, landed properties and condominium apartments or penthouses have waterfront views, public housing now offers such options, especially in the form of executive condominiums (ECs).

These hybrid property types begin their journey as public housing eligible for application under the Housing Development Board (HDB), and after 10 years, they become private condominium apartments, enjoying the benefits and price tags of private properties in the market. When they come with waterfront views and lifestyles, all the better.

Bellewaters ECA few of these EC properties include Bellewaters, and one in Punggol aptly named Waterwoods. Both situated in the new towns of Sengkang and Punggol, they seem targeted at young families and families who are looking to relocate or upgrade. With a projected temporary occupation permit (TOP) acquirement date of 2017, and now the raised income ceiling from $12,000 to $14,000 for ECs, it could be the prime time to seek out a good unit in potential EC developments. A bonus point for Bellewaters is that it was launched before 2013, thus the resale levy which is levied on home buyers who have previously bought a HDB flat or have taken a CPF housing grant does not apply here.

Waterwoods Punggol ECThere are big things planned for the Sengkang and Punggol HDB estates in the next couple of decades, including a North Coast Innovation Corridor with the Seletar Regional Centre and Seletar Aerospace Park in its midst, as well as the Punggol Creative Cluster and Learning Corridor which includes The Singapore Institute of Technology and links to the Punggol waterfront. The Punggol Waterway is also set to be a hub of commercial, retail and recreational activity.

Transport, though slightly lacking for now, will no doubt improve in time to come, and the new townships will have immense potential for growth.

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?

 

EC’s potential attracts buyers

Most who qualify for an executive condominium (EC) are likely to apply for one when weighing the potential of an EC against a private condominium. And that perhaps fulfils the purpose of these public-private housing hybrids, which is to help citizens make a progressive step into the private property market. EC’s are public housing which become private housing after 10 years. This means buyers are able to enjoy the perks of a private residential apartment including the facilities and the eventual potential appreciation in value in the open market as a private property. There is an income cap however, at $12,000 in gross household income and the minimum occupation period (MOP) of 5 years still apply as they are essentially public housing provided by the Housing Board (HDB) on the onset.

The Vales

Their popularity has risen immensely, reflected in the often-sold-out launches. At the Forestville and Sea Horizon ECs by MCC Land and Hao Yuan Investments, up to 95 per cent of their units have been sold. Both properties are expected to receive their temporary occupation permits (TOP) by 2016.

The 653-unit Forestville executive condominium is situated in Woodlands, an upcoming regional business hub, and near the future Woodlands South MRT station. Schools in this area include the Singapore American School, Innova Junior College, Singapore Sports School and Republic Polytechnic. Across the island in Pasir Ris, just two bus stops away from Pasir Ris Central, the 495-unit Sea Horizon prides itself in being the only EC with a sea view.

It will be an exciting market to watch as there are quite a few new ECs being launched in this half of the year, including Westwood Residences, The Brownstone, Sol Acres and The Vales.

Executive Condominiums – Now’s the time

If you are a second-time HDB property buyer, and are looking at upgrading from a HDB flat to an executive condominium (EC) – the time may be now. Before the resale levy really kicks in.

The TerraceImplemented in Dec 2013, the levy applies to ECs launched after Dec 9 the same year and as most of the EC launches from now on will be for units launched after Dec 2013, a levy of $15,000 to $50,000 will apply. And that’s no small sum to scoff at.

Executive condominiums have long been the way to move from public to private housing for most middle-class Singaporean families. As young couples now see this as one of the best ways to start their families, competition for the same properties have never been fiercer. As a hybrid between public and private housing, ECs will become private properties following a ten-year period. There is a income ceiling for applicants however, of a combined household income of $12,000.

As bids for EC land plots dip, mostly due to a saturation of launches in the last few months, prices and sales volume may not hold as well moving forward. Currently, ECs which just escape this resale levy include Bellewoods, Bellewaters, The Terrace, Lake Life and The Amore. They each boast their own unique selling point, with unblocked views at The Terrace, basement carparks at The Amore, nature-inspired landscapes at Bellewoods and resort-living lifestyle atmosphere at Bellewaters. Combined with options of units such as penthouses and condominium facilities, it’s the only logical step up for HDB upgraders.

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?

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.