Foreigner share of resale ECs spikes to 49% By Mindy Tan
SALES of completed executive condominiums (ECs) on the resale market saw a surge of interest from foreigners in the first 11 months of 2011. Sales of new units too locked in a record number of transactions from January to November last year.
Foreigners, including permanent residents (PRs), bought 383 resale ECs in the first 11 months of 2011, exceeding the 322 units which were purchased for the whole of 2010, said property market research firm R’ST Research.
This accounts for 49 per cent of the 775 resale ECs transacted in 2011, up from the 33 per cent recorded.
Looking specifically at foreigners who are non-PRs, 108 EC transactions were made, more than twice the 49 units bought in 2010. The bulk of these purchases were by Chinese nationals (70 transactions) and Indian nationals (19 transactions).
On the developer sales front, 2,058 EC units were transacted in the developer (new) sales market. This marked fresh records for both new sales, and total EC transactions. The latter saw a total of 2,833 EC units purchased within the 11 months, breaching the last peak of 1,876 units in 1998.
ECs – a hybrid between public and private homes – come with condo facilities, but cost less than a private condo. They have initial sale restrictions similar to those for public housing, such as a minimum occupation period of five years.
After five years, they can be sold to Singaporeans and PRs. They are fully converted to private housing after 10 years – it is then that they can be bought by foreigners who are not PRs.
Supply of ECs will be further ramped up this year, with the government ready to release sites for up to 5,000 EC units through the Government Land Sales (GLS) programme – sites for 3,000 units will be launched in the first half of 2012, under the Confirmed List, comparable to the 3,000 EC units from five sites sold for the whole of 2011.
According to Ong Kah Seng, director at R’ST Research, the buoyant sales activity can be attributed to the attractive pricing ECs offer.
‘Various EC projects were launched from end 2010 and received good buying interest amid the economic slowdown,’ he noted. ‘In fact, due to a significant run up in private condominium prices translating to record selling prices, ECs became an attractive alternative.’
Joseph Tan, executive director, residential, CBRE, agreed, noting that ECs are always relatively more affordable, given that their average prices are some 20 per cent to 25 per cent below those of new 99-year-leasehold private condominiums in the same neighbourhood.
There is also the issue of supply, he pointed out.
Eight EC sites were sold via the GLS programme in 2010, after a hiatus of six years. Three new projects were launched in 2010, with the remaining five launched in 2011.
Alan Cheong, associate director of Savills research and consultancy, added: ‘ECs were designed for family units. They have sizes between 900 to 1,300 sq ft. That makes it attractive for owner occupiers (with families).’
On the resale front, 775 resale EC units were transacted in the first 11 months of 2011, according to R’ST Research.
Of this, 383, or 49 per cent, were purchased by foreigners (including PRs). Mainland Chinese, Indian nationals and Malaysians accounted for the bulk of the purchases.
Sales data showed that for the eleven months, mainland Chinese bought 151 resale EC units, followed by Indian nationals with 118 resale units, and Malaysians at 62 resale units.
Foreigners (non-PRs) bought 108 EC units in the first 11 months.
One of the key reasons for the surge in foreign interest lies in ECs’ attractive pricing, with resale units about 13 per cent below those of private resale homes in similar locations, said CBRE’s Mr Tan.
The top-selling EC projects in 2011 included Prive (537 units), Blossom Residences (293 units) and Belysa (278 units).
On the resale front, the top-selling projects were Northoaks (81 units), Woodsvale (75 units) and The Floravale (62 units).
Looking ahead, R’ST Research’s Mr Ong expects the strong buying interest to continue into 2012, in part supported by the recent raising of buyers’ income ceiling from $10,000 to $12,000.
‘However, there may be a handful of home seekers who are waiting for prices of private residential properties to fall in 2012 in view of the ample supply, challenging economic conditions, and private residential cooling measures,’ he added.
‘As such, buyers are unlikely to rush into purchasing an EC unless it fits into his property buying requirements. The overall buying interest for ECs is expected to be encouraging, but not excessively optimistic.’
This article was first published in The Business Times.
Executive Condominium (EC) project at Pasir Ris Drive 3 / Pasir Ris Link.
Koon Holdings Ltd, one of Singapore’s leading construction specialists, has announced that its wholly-owned subsidiary, GPS Alliance Development & Investment Ltd, has entered into a joint venture (JV) to develop an Executive Condominium (EC) project at Pasir Ris Drive 3 / Pasir Ris Link.(Can SMS www.marktan.name 938-747-86 request for update when showflat is ready)
Under the terms of the agreement, GPS Alliance Development will own a 15 percent stake, while Ho Lee Group Ltd, Maxdin Ltd and EVIA Real Estate Ltd will hold a 21 percent, 30 percent and 34 percent share respectively.
Ho Lee Group Ltd and Maxdin Ltd have been awarded the tender for the EC site at Pasir Ris Drive 3 / Pasir Ris Link at the tender price of S$122.2 million.
Tan Thiam Hee, Managing Director and Chief Executive Officer of Koon, said the recent move by the government to raise the income ceiling for those eligible for EC housing “has further boosted the demand for ECs. Other than this site, there is no other supply of new EC projects in the Pasir Ris area in the immediate future.”
“Demand is likely to come from the potential upgraders currently living in Pasir Ris and Tampines new towns and those working in the eastern part of Singapore. In view of these trends, we have decided to participate in this landmark residential property development. In addition, our real estate agency unit, GPS Alliance, will be responsible for the marketing strategy and sales of this residential development.”
The group will finance its equity shareholding stake in the JV Company through funds. It is not expected to have an impact on the group’s performance for the current financial year.
Can SMS www.marktan.name 938-747-86 request for update when showflat is ready
Can SMS www.marktan.name 938-747-86 request for update when showflat is ready
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