Home hunters worried that executive condo (ECs) lack the prestige of private condos should think again, according to property consultants.
For those who are eligible, ECs – a public-private housing hybrid – offer a condo-like environment with government subsidies thrown in, they said.
‘ECs have most, if not all, of the facilities of private mass-market condominiums and are generally comparable in design and facilities,’ said Ms Chia Siew Chiun, director of research and advisory at Colliers International.
‘(They) can be considered a good buy for HDB flat upgraders… as well as first-timers in the sandwich class,’ she said.
ECs are fully privatised only after 10 years; they can then be sold to foreigners.
Those who wish to buy ECs must have a monthly household income of less than $12,000 and not own a private condo. Buyers are also subject to a minimum occupation period of five years, within which they are not allowed to rent out the entire unit.
Some home owners who bought ECs a decade or so ago have benefited from their homes’ rising value.
For instance, Nuovo, in Ang Mo Kio, went for an average price of $789 per sq ft (psf) in the first five months of this year. It was sold for $399 psf in 2001, when it was launched. Units range in size from 1,119 to 2,626 sq ft.
In comparison, private condo Goldenhill Park, near Nuovo and launched the same year, has sold at an average of $1,250 psf in the past five months, up from $705 psf previously.
Similarly, resale units at Pasir Ris’ Whitewater – an EC – went for an average of $748 psf in the first five months of this year, compared to $364 psf when it was launched in 2002. Homes there measure 958 sq ft to 2,077 sq ft in size.
Private condo Ris Grandeur, launched in 2004, sold for an average resale price of $906 psf in the same five-month period, up from $535 psf at the year of launch.
Lower prices in the past may have reflected the Government’s push to make ECs more popular with home buyers, said SLP International Property Consultancy research head Nicholas Mak.
The first batch of eight ECs in the 1990s saw relatively lower prices.
‘The EC option helped to reduce the long queue of sandwich-class home buyers who wanted executive flats, which were larger HDB flats then.’
But the property boom drove up home prices and led to a greater appreciation of ECs, he said.
Still, he warned that EC prices are not likely to shoot up drastically in the near future. They are likely to move in tandem with private resale units.
‘Physically, they look the same… it’s down to their location, design, and so on.
‘That foreigners cannot buy ECs until they are 10 years old plays a minimal role. The additional buyer’s stamp duty already restricts demand,’ he added.
Cost-wise, home buyers are likely to find a new EC in a far-flung place to have prices comparable to a resale HDB flat in more established areas, said R’ST Research director Ong Kah Seng.
But not all recently launched ECs have done well.
Watercolours at Pasir Ris, for one, surprised some industry watchers with a sluggish take-up rate.
Mr Ong feels that some buyers may see ECs as a class below private projects.
Mr Mak said: ‘I think an EC is still a good choice for the sandwich class, but people should not always think that they must sell it at a profit. They must be satisfied that they bought it with a subsidy, and that they have also gained from the years living in it.’
Source: Straits Times