Friday, January 15, 2010

Regarding the two new EC condo sites launched today...


Both The Straits and Business Times today have reported that the Government has launched two executive condominium (EC) sites - one in Sengkang and the other in Yishun.

EC are a hybrid of public and private housing. They are strata-titled apartments with facilities comparable to private condos. New ECs are sold with initial eligibility, ownership and resale restrictions similar to public housing; but these are completely removed after 10 years.

Of the two 99-year leasehold plots on offer, the Sengkang plot, near Buangkok MRT Station, will be more highly sought after and hence should fetch a higher unit land price, say property consultants. It can be developed into 520 apartments and is just one MRT stop away from Compass Point mall.

The Yishun plot, which can yield about 385 units, is not within walking distance of an MRT station, although it could make for a conducive living environment. It is close to Yishun Park, Orchid Country Club and Lower Seletar Reservoir. The Yishun plot is next to a completed EC project, LILYDALE.

Property consultants that Business Times polled predict that land bids for the more popular Sengkang plot would range from about $190 to $300 per square foot per plot ration (psf ppr), with target selling prices of $550-600psf. Three EC projects in the north-east region – PARK GREEN, THE RIVERVALE and THE FLORIDA – were reportedly sold at average prices of $525-546psf in Q4 2009.

For the Yishun plot, consultants expect bids of around $150-$210 psf ppr with average selling prices of $500 -580psf. Units in LILYDALE next door were reportedly transacted at $494psf on average last quarter.

The last EC project was Far East Organization’s La Casa in Woodlands, which was released at an average price of about $380psf in May 2005 and completed in 2008. But a Punggol EC site that was launched in September 2008 had no takers.

Last year’s sharp recovery in 99-year leasehold mass-market private condo prices has revived the need for ECs, say analysts. Suburban home prices rose by an estimated 11.2%, and prices of ECs have been on the rise in tandem with the mass market boom. A CB Richard Ellis report last November found the median resale prices of ECs had increased 63% in recent years – from $319psf at the bottom of the market in the 3rd quarter of 2006 to $519psf in October last year.

They have inched even higher in the past 3 months, with homes in good locations hitting around $600-700psf. A 1,464sqft home at Bishan Loft, for example, sold for $1.12 million or $765psf in December, according to data from the URA.

The price increases seen over the past year have left a group of “sandwich-class” buyers who have been priced out of the market and are looking for alternatives.

EC’s were originally introduced in 1996 to provide for middle-income buyers who wanted private property living but were unable to afford the prices. The $10,000 income ceiling for new EC buyers is above the $8,000 for those seeking to buy new public housing flats from HDB.

The two new EC sites launched today come with a twist – the winning tenderers will have to set aside 95% of units in the initial month of sale for first-time home buyers. That is, those that have not receive a housing subsidy. First time buyers can continue apply for the $30,000 housing grant.

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