SINGAPORE: Prices of executive condominiums (ECs) have almost doubled in the last decade, but they remain popular, analysts said.
Prices have risen in tandem with the rest of the property market, market observers told CNA, citing the increase in costs for land, construction and labour as reasons.
The average price per sq ft rose from about S$800 (US$595) in 2014 to about S$1,500 today.
The latest EC project in Bukit Batok launched last month, Lumina Grand, is already 70 per cent sold.
Among the buyers are Ms Celine Ng and her husband Alwyn Chan, who got their hands on a three-bedroom unit for about S$1.3 million.
This is their second home purchase, after staying in a three-room Build-to-Order (BTO) flat previously.
“It's cheaper than a private home and it takes about three years rather than five (to build),” Ms Ng said of the decision to secure a unit at the development.
Another consideration was that moving would allow them to be nearer to her brother, she said.
The couple plans to sell the property in 10 to 15 years when their children, aged three and five, are older.
“Our thought process is a bit of an asset progression, and hopefully when we sell the flat, we will get some money for our retirement,” Ms Ng added.
Demand for ECs remains strong especially among home buyers who prefer to live in condominiums over public flats but are looking at cheaper options, given that ECs have the same look, feel and facilities as private condominiums, said real estate agency ERA’s Jasmine Chan.
ECs can also be resold after five years at private property prices, noted Ms Chan, a senior executive group division director.
Almost every EC launch over the past five years has done well despite the pandemic, said Propnex Realty CEO Ismail Gafoor.
“ECs are generally popular because they are a Singaporean advantage and they are hugely subsidised,'' Mr Ismail said of the strata-titled apartments which are built and sold by property developers to eligible Singaporean households.
He noted that ECs are priced lower than mass market condominiums, which cost over S$2,000 per sq ft.
“ECs are still a value proposition especially for those people who are in the middle class, or people who desire to upgrade to a private property and find private properties are beyond their means,” he added.
ECs are typically 25 to 30 per cent cheaper than similar private condominiums in the same neighbourhood, chief research officer at property tech firm Mogul.sg Nicholas Mak told CNA938’s Singapore Today on Monday (Mar 4).
ECs are seen as a low-risk option for developers because they are often fully sold due to subsidies, he added.
Mr Ismail, who predicts stronger EC demand going forward, said it may be timely for the government to consider releasing more land sites for such homes.
However, Mr Mak said that doing so may drive prices upwards.
“If they (the government) release more land through the usual land tender system, developers will bid higher prices for it, and you will have the same upward price spiral again,” he said.
Mr Mak said that it may be time to relook the relevance of ECs.
ERA’s Ms Chan said the supply of new ECs is managed well by the government to ensure there is no over-supply which could lead to disruption in demand for other housing types like BTO and private condominiums.
Professor Qian Wenlan, director of the Institute of Real Estate and Urban Studies at the National University of Singapore, said market forces will work naturally to moderate EC prices.
“ECs are built by developers and they will acquire land through the usual procedure. So then a lot of the times, the market forces are going to be in place.The developers have to weigh the pros and cons of offering or launching an EC relative to, let's say, a mass market condo,” she said.
Consumer preferences could also change over time, she added.
This year, the government has confirmed a site for an EC at Jalan Loyang Besar. Another two sites are on the reserved list.
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Prices have risen in tandem with the rest of the property market, market observers told CNA, citing the increase in costs for land, construction and labour as reasons.
The average price per sq ft rose from about S$800 (US$595) in 2014 to about S$1,500 today.
The latest EC project in Bukit Batok launched last month, Lumina Grand, is already 70 per cent sold.
Among the buyers are Ms Celine Ng and her husband Alwyn Chan, who got their hands on a three-bedroom unit for about S$1.3 million.
This is their second home purchase, after staying in a three-room Build-to-Order (BTO) flat previously.
“It's cheaper than a private home and it takes about three years rather than five (to build),” Ms Ng said of the decision to secure a unit at the development.
Another consideration was that moving would allow them to be nearer to her brother, she said.
The couple plans to sell the property in 10 to 15 years when their children, aged three and five, are older.
“Our thought process is a bit of an asset progression, and hopefully when we sell the flat, we will get some money for our retirement,” Ms Ng added.
THE APPEAL OF ECs
Demand for ECs remains strong especially among home buyers who prefer to live in condominiums over public flats but are looking at cheaper options, given that ECs have the same look, feel and facilities as private condominiums, said real estate agency ERA’s Jasmine Chan.
ECs can also be resold after five years at private property prices, noted Ms Chan, a senior executive group division director.
Almost every EC launch over the past five years has done well despite the pandemic, said Propnex Realty CEO Ismail Gafoor.
“ECs are generally popular because they are a Singaporean advantage and they are hugely subsidised,'' Mr Ismail said of the strata-titled apartments which are built and sold by property developers to eligible Singaporean households.
He noted that ECs are priced lower than mass market condominiums, which cost over S$2,000 per sq ft.
“ECs are still a value proposition especially for those people who are in the middle class, or people who desire to upgrade to a private property and find private properties are beyond their means,” he added.
ECs are typically 25 to 30 per cent cheaper than similar private condominiums in the same neighbourhood, chief research officer at property tech firm Mogul.sg Nicholas Mak told CNA938’s Singapore Today on Monday (Mar 4).
ECs are seen as a low-risk option for developers because they are often fully sold due to subsidies, he added.
THE EC MARKET
Mr Ismail, who predicts stronger EC demand going forward, said it may be timely for the government to consider releasing more land sites for such homes.
However, Mr Mak said that doing so may drive prices upwards.
“If they (the government) release more land through the usual land tender system, developers will bid higher prices for it, and you will have the same upward price spiral again,” he said.
Mr Mak said that it may be time to relook the relevance of ECs.
ERA’s Ms Chan said the supply of new ECs is managed well by the government to ensure there is no over-supply which could lead to disruption in demand for other housing types like BTO and private condominiums.
Professor Qian Wenlan, director of the Institute of Real Estate and Urban Studies at the National University of Singapore, said market forces will work naturally to moderate EC prices.
“ECs are built by developers and they will acquire land through the usual procedure. So then a lot of the times, the market forces are going to be in place.The developers have to weigh the pros and cons of offering or launching an EC relative to, let's say, a mass market condo,” she said.
Consumer preferences could also change over time, she added.
This year, the government has confirmed a site for an EC at Jalan Loyang Besar. Another two sites are on the reserved list.
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