Sales have been brisk at Wandervale, the first executive condominium (EC) project launched this year, its developer said yesterday.
About 320 apartments have been sold since the launch of the 534-unit project in Choa Chu Kang Avenue 3 last month, Sim Lian Group noted. It said larger units were most popular with HDB upgraders and young families, with all 82 four-bedroom units sold.
Wandervale comprises 130 three- bedroom units, 322 three-bedroom premium units, and four-bedders ranging from 958 to 1,249 sq ft.
The sales are encouraging, likely making Wandervale one of the more successful ECs in terms of take-up since Lake Life in Jurong, which sold 534 of its 546 units at its launch in November 2014. There's no doubt there is underlying demand, be it ECs or private condos; it is a matter of pricing them right. As to whether this is a green shoot, it is too early to tell, as there're a few more projects coming in, said an analyst.
The average price of units at Wandervale, which is near Choa Chu Kang MRT station, is $755 psf. Prices start from $655,000 for a three- bedder and from $753,000 for a three-bedroom premium unit, while four-bedroom homes go for $896,000 upwards, Sim Lian said.
A consultant said that buyers are price-sensitive, so developers that want to enjoy good sales at the project launch will have to come up with an attractive price point. At under $800 psf, he thinks buyers are coming back to the market.
Wandervale is vying for buyers with nearby Sol Acres EC, a 1,327-unit development by MCL Land launched last year. It had sold 416 of the 707 units launched as at March at a median price of $791 psf.
All in, developers sold 485 new EC units in March. Analysts say sales are likely to hold up this month with two launches in Sembawang - The Visionaire and Parc Life. Other EC projects in the pipeline include Treasure Crest in Anchorvale Crescent, Northwave in Woodlands Avenue 12 and a development in Choa Chu Kang Avenue 5.
Adapted from: The Straits Times, 20 April 2016
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Prices of executive condominiums (ECs) do catch up with private condos after the initial five-year minimum occupation period (MOP), and even more so when they are fully privatised 10 years after purchase.
A study has found that the average price gap between new condos and ECs starts at around 20 per cent, due to the sales restrictions that apply to ECs, as well as their lower land and construction costs.
But upon fulfilling the MOP and at privatisation, the discount narrows to 9 per cent and 5 per cent respectively.
At the end of the MOP, ECs can be sold in the open market to Singaporeans and permanent residents; upon privatisation, ECs can be sold to foreigners.
This is not to say that buying an EC is a sure-profit investment, as history shows that much still depends on the initial purchase price.
By matching caveats at 21 EC projects already privatised and analysing their profits made at the end of five and 10 years, the study found that 13 projects made a loss after five years, mostly because they were bought at the boom period before the Asian financial crisis. The remaining eight projects managed gains of over 20 per cent.
But at privatisation, all the EC projects became profitable. How much money owners made depended on the ECs' locational attributes and surrounding supply at the time of sale.
Based on historical data, first-hand owners of currently privatised ECs are sitting on considerable gains, the report said.
The report also alluded to a trend that The Business Times had highlighted in an article in January - that increased vacancy rates may be a sign that buyers are starting to treat ECs as an investment product, as young-couple EC buyers continue to live with their parents after marriage while waiting for EC prices to re-calibrate over time before they sell.
However, the study found something even more surprising. Comparing between buying an EC and a private condo and holding each for 10 years, the report said that the EC could in fact be the better long-term investment due to their higher internal rates of return over 10 years.
This is because of their subsidies and lower prices compared to private condos. Also from year six onwards, entire EC units are allowed to be rented out, and their rentals tend to be on a par with private condos'. This helps to significantly defray their holding costs.
The hypothetical study assumed a 1,100-square-foot EC home bought for S$875,000, and a comparable condo for S$1.09 million.
The hypothetical couple has a household income of S$14,000, with a not very financially prudent loan-to-value of 80 per cent for 25 years at a fixed rate of 2.5 per cent per annum.
Rents for both units are fixed at S$3,000 per month. To simplify matters, other costs such as stamp duties, maintenance fees, and taxes were not considered.
At the end of just five years, the private condo proved to be the better buy, because the EC was not able to offset its monthly mortgage payments with rental income, as regulations forbid renting out the whole unit. This dampened its otherwise stellar capital appreciation.
But once rental restrictions are lifted, the EC quickly outperformed the condo.
Asked if the findings, which support an investment case for ECs, mean that the partly state-subsidised housing designed for the "sandwiched class" home buyer has become irrelevant, one of the authors of the report said no.
(This is) given the significant price gap between ECs and private condos. ECs provide an affordable option to HDB upgraders or first timers who aspire to achieve a higher standard of living. Though some may plausibly be buying ECs for investment, majority are buying them for their own occupation, she elaborated.
Adapted from: The Business Times, 25 February 2016
With the income ceiling raised in 24 August 2015 to $14,000, buyers who were previously not eligible to buy Executive Condominiums (EC) due to income exceeding $12,000 have came back into the EC market.
Weekly sales have been taking place over a good selection of exisiting and newly launched ECs. Buyers now have more choices over the available EC units by different reputable developers over the island.
The recent launch in Yishun, Signature at Yishun by JBE Holdings, has seen a good response of about 20% units were sold during its preview with a 2 Bedroom unit starting from $5xxK. Sales has been moving at a steady pace after the launch as well as other ECs that are already opened for immediate booking.
The EC beside this development, The Criterion by City Developments Ltd, has also received a high interest in application towards its targeted preview on 10 Oct 2015.
These 2 ECs are priced attractively with afforability factor taken into consideration without comprimising the quality in furnishing and fixtures. Such competitive pricing among developers thus creates a beneficial opportunity for eligible buyers to come back into the EC market.
With the potential to fully privatize after the 10th year, the resale potential makes it a highly sought after alternative compared to a private condominium. Of course ECs are only for elibigle buyers so not everyone who can afford are able to own an unit. Apart from pricing, the locations and facilities are also comparable or may surpass those of private condominiums. So if you are eligible, EC is another good option for consideration; only the privilege can buy.
Check out the List of ECs available and open for immediate booking.
Prime Minister Lee Hsien Loong announced on Sunday 23 August 2015 at the National Day Rally. The income ceiling for couples buying new flats will go up from $10,000 to $12,000, while that for ECs will increase from $12,000 to $14,000.
Located with Cheng Lim Light Rapid Transit (“LRT”) station at the door step, The Vales EC is easily accessible by 10 minutes walk or a LRT station away from Sengkang MRT station and a bus interchange.
The development is situated in Anchorvale Crescen which can be easily reached by public transportation. With Malls, Schools and Amenities within close vicinity, there will be much convenience provided for its future residents.
Occupying a permissible gross floor area of approximately 525,709 sq ft, The Vales EC will have 517 units developed. More info here
Located just 5 minutes walk from the future Canberra MRT station, close to Sun Plaza and Sembawang Shopping centre, The Brownstone EC will probably be a popular choice among eligible buyers.
With a 99-year leasehold, the development is located in Canberra Drive (North - Sembawang / Yishun). Comprising of 638 units on a land size of approximately 307,447 sqft, sheltered car park and recreational facilities.
The Brownstone EC, conceptualized based on New York theme, comes with full condominium facilities, not to mention a junior skating ring and even a pet's corner for pet lovers. A well thought of landscaping design for the Families young and old as well as for pets too. More info here