With a monthly household income of up to $14,000, purchasing a mass market private condominium is not out of the question; whilst those in the lower income bracket can easily take the HDB BTO route. Thus, amid the plentiful choices that a buyer has, why are Executive Condominiums (ECs) still popular in today’s market?
So far in 2016, there has been good and steady demand for ECs. According to data from the Urban Redevelopment Authority (URA), for the first seven months of 2016, 2,697 EC units were sold by developers. This has already surpassed the 2,550 units sold by developers for the whole of 2015.
In addition, some of the best-selling projects this year have been ECs. Wandervale and Treasure Crest were two of the most successful EC launches since 2014. Wandervale, the first EC to launch in 2016, sold some 50 per cent or its 534 units on the opening weekend; whilst in July, Treasure Crest sold some 72 percent of its 504 units on the first weekend. Existing EC projects have also been seeing sustained interest from buyers, with developments such as Bellewaters, The Vales and the Terrace seeing a steady stream of buyers even though they are not new launches.
For most EC buyers, the main appeal of ECs is the condominium address and lifestyle but at a cheaper price. ECs are typically priced $750 to $850 per square foot whilst mass market condominiums within the vicinity are likely to be $1,000 to $1,100 per square foot onwards.
After the minimum occupation period of 5 years, the EC unit can be resold on the secondary market to Singaporean or SPR buyers whilst 10 years after completion, the EC unit can also be sold to foreign purchasers. So, depending on the state of the market at the relevant point in time, the EC buyer already enjoy a larger headroom for capital gain as compared to someone who had bought a mass market condominium unit at around the same time as the EC buyer.
Further, for eligible first-time EC buyers, they have the added advantage of using the CPF Housing Grant of $30,000 to help pay for the purchase price. There are no housing grants available for private condominiums.
The second reason is a practical one. EC buyers are owner-occupiers and they are purchasing the unit to start a family or to house a family.
Majority of EC projects are designed to comprise mainly 3 and 4-bedroom units; with the exception of some that may have a small selection of 1 and 2-bedroom units. Comparatively, a mass market condominium may have more numbers of smaller units than larger units as they also target the investor buyers that prefer a lower price quantum.
The third reason is the living space; and size matters when you have to house a family. Treasure Crest EC’s 3-bedroom units are sized 958 to 1,249 square feet whilst its 4-bedroom units are 1,345 square feet. Comparatively, private condominium’s 3-bedroom units may be about 880 to 1,100 square feet and their 4-bedrooms may not exceed 1,300 square feet.
By – ERA