Increasing numbers of foreigners are snapping up executive condo in the resale market and helping to push prices to record levels.
Foreigners, including permanent residents (PRs), bought 321 ECs or 33 per cent of all resale homes last year, said Savills research and consultancy, with Indian nationals by far the biggest segment.
This is up from 18 per cent in 2004, when PRs were first eligible to buy exec condos, the poshest form of public housing.
The foreign market presence was even higher in the first two months of the year with foreigners comprising 45 per cent of transactions in the exec condo resale sector.
Foreigners made up 34 per cent of buyers in the private mass-market resale segment in the same period, indicating the increased appeal of exec condos.
This interest, coupled with the booming property sector, is also affecting values. The average price of a resale exec condo unit hit $634 per sq ft (psf) in the first two months of the year – up 31 per cent on the previous peak in the third quarter of 2008.
Executive condo, like other Housing Board (HDB) flats, are subject to a minimum occupation period of five years. After that, they can be sold only to Singaporeans and permanent residents. They become private property after 10 years and can then be sold to foreigners.
PRs can have their pick from about 9,494 executive condo units while non-PR foreigners have about 6,318 units open to them, Savills said.
Some of these units are in Bishan Loft, The Eden in Tampines and Simei Green condominium.
Foreign interest in resale exec condos is also expected to remain strong as many cannot buy an HDB resale home under the new property rulings, added Ms Christine Sun, senior manager at Savills research and consultancy.
The rules introduced last year require that those who buy an HDB resale flat on or after Aug 30 must dispose of their private property – including any overseas – within six months of the purchase.
Savills also said sales data showed Indian nationals have bought 296 resale exec condos since 2004, making them the biggest group of foreign buyers.
Malaysians were next with 276 units while buyers from China accounted for 222 units.
Woodsvale in Woodlands is the most popular estate with 138 transactions since 2004. Northoaks – also in Woodlands – and Simei Green condominium are slightly behind.
But Bishan Loft holds the price record with a 1,991 sq ft unit selling for $944 psf last October.
Price gains have been moderating lately with values inching up just 1 per cent in the first two months of the year compared with the last quarter, Savills said.
This could be down to the recent property measures, price resistance and an increased mass-market home supply from the bumper release of state land, the firm added.
Experts noted that exec condos are often value-for-money purchases as they can be up to 25 per cent cheaper than private mass-market homes.
‘New mass-market home prices have surged to record highs in recent quarters… Resale ECs that are more affordable than mass-market homes offer good alternatives for most of these buyers,’ Ms Sun said.
PropNex chief executive Mohamed Ismail said exec condos are also often relatively new and in reasonably good condition as most are less than 10 years old.
‘Most foreigners might have been relocated here and would buy exec condos for owner-occupation, often with a mid- to long-term perspective,’ he added.
Global Property Strategic Alliance chief executive Jeffrey Hong added that exec condos are more popular when the gap between public and private housing widens, as has been the case over the past year.
He expects interest from foreigners to continue increasing as more exec condos reach their 10-year mark and become eligible for purchase by foreigners.
Mr Marc Grange, a Singapore PR who works in the electronics sector and rents a flat in Bishan, said he would consider purchasing an exec condo unit as prices at new condos are out of reach for him and his fiancee.
‘Exec condos are a good middle ground. But their limited numbers mean finding a suitable place that’s in a good location is the hard bit,’ he said.
Source: Straits Times