SINGAPORE: The response to the latest batch of executive condo (ECs) projects has been tepid, with about 2,200 EC units remaining on the shelves as of June 2015, the highest in almost a decade.
The largest EC development to date, Sol Acres, received 800 e-applications for the first 707 of its 1,327 units, when subscription closed on Sunday (Jul 26). Booking will open for the 707 units on Aug 22.
The Brownstone EC, located along Canberra Drive, sold just under a third of its 638 units in the opening weekend. The Brownstone’s developer CDL said the units were sold at an average of about S$810 psf, with prices starting from S$596,000 for a two-bedroom, S$695,200 for a three-bedroom, S$835,200 for a four-bedroom and S$1.316 million for a penthouse.
In a statement, it added that the three- and four-bedroom apartments enjoyed particularly good take-up rates. All six of the five-bedroom penthouses have been sold out. About 65 per cent of those who purchased units at The Brownstone were first-time buyers, CDL said.
Developers of The Vales EC, which opened for booking more than a week ago, sold about 100 units, less than 20 per cent of the total 517 units. Developer Singhaiyi said most of the units sold are the three- and four- bedroom units.
In November last year, developers of Lake Life EC sold more than 95 per cent of the units in just two days. Since then, response in the market to new projects has been less than warm. Market watchers said it is a sign that recent projects are adding to the pool of unsold units.
Nicholas Mak, executive director of research and consultancy at SLP International Property Consultants said: “During the heyday of the EC launch market that was in 2011 to 2013, the number of e-applications each EC project can sometimes achieve is double of the number of units available.
“One of the reasons why the demand was strong was also because of rising HDB resale and condominium prices. When prices of the mass market condos are rising very rapidly, it begins to go out of reach of some HDB upgraders who will then turn to the EC market as an alternative. But right now, the prices of mass market condominiums are sliding and HDB resale prices are also fairly stagnant.”
Market watchers also said the 30 per cent mortgage servicing ratio cap and resale levy imposed on second-time buyers have also curbed demand. Second-timers have to pay up to S$50,000 levy when buying an EC unit.
“For an EC project, typically the number of second-timers is about 50 per cent, so definitely the resale levy has hit them quite hard,” senior manager of research and consultancy at OrangeTee Wong Xian Yang said.
With talk of an impending increase in the income cap for EC buyers, analysts said this could provide some respite for the EC market.
CEO of Century 21 Singapore Ku Swee Yong said: “Revising the household income cap on EC market would definitely help to increase the demand. But a family with household salary of S$13,000 or S$14,000 might also consider the ample supply of private properties.”
Analysts also said this is especially so if mass market condominiums are reasonably priced. For instance, buyers were quick to snap up units at High Park Residences condominium in Fernvale, which average below S$1,000 psf. Almost 80 per cent of the 1,390 units have been sold.