A review of the Executive Condo market
By Elizabeth Choong
/ EdgeProp Singapore |
Punggol Park Connector. Many ECs are found in District 19 which includes Punggol, Sengkang and Hougang. (Picture: Albert Chua/EdgeProp Singapore)
EDGEPROP (SINGAPORE) - Affordability is the main concern for many due to inflation. Housing prices and interest rates have been on an upward climb. In addition, the cooling measures introduced by the government in September have reduced the amount of housing loan available to buyers.
Executive condominiums (ECs) were first introduced by the government to better meet the housing needs of the “sandwich class”, which exceeds the income ceiling of Build-To-Order (BTO) flats but finds private condominiums unaffordable. The income ceiling for BTO flats is $14,000 per month for couples and $7,000 per month for singles. ECs have a higher income ceiling of $16,000 per month.
ECs are usually priced below nearby private condominiums although they have the same type of common facilities, such as swimming pool, gym and clubhouse, as private condominiums. However, buyers of ECs have to meet HDB’s eligibility rules before being allowed to purchase a unit.
HDB’s Minimum Occupancy Period (MOP) of five years also applies. EC units can be sold in the open market after MOP but only to Singaporeans or permanent residents. They can be sold to foreigners after the development becomes fully privatised, that is, 10 years after obtaining TOP.
Another drawback for EC buyers is the need to obtain a mortgage loan from a bank as HDB loans are not available to them.
Strong capital appreciation
Current average resale price for ECs is $1,085 psf, up 15.3% from $941 psf last year. Current average price for newly launched ECs is $1,270 psf, up 7.9% from $1,177 psf last year. It is notable that average resale price for ECs broke through the $1,000 psf mark this year, while average price for newly launched ECs broke through the $1,000 psf mark earlier, in 2019.
Although average resale price for ECs is 28% lower than leasehold condominiums ($1,389 psf), price growth for ECs is stronger. Average resale price for ECs has grown 50% since 2012, compared to 35% for leasehold condominiums. Hence, ECs are not only affordable but also an asset that offers strong capital appreciation.
Executive condominiums that just obtained TOP
From 2018 to 2020, 10 ECs obtained TOP. Among the 10 ECs, Districts 19, 23 and 27 each have three developments. The remaining EC is in District 25. Average price for the 10 developments ranges from $766 psf for Inz Residence to $1,191 psf for Rivercove Residences. No EC has obtained TOP since last year.
The size of the developments varies from 358 units in Northwave to 1,327 units in Sol Acres. The majority of them have 500 to 600 units.
Northwave: Standing out from the crowd
Among the 10 recently completed ECs, Northwave is the only development in District 25 and has the least number of units.
Northwave is also among the more affordable ECs, which could be due to its location in Woodlands and the lack of a nearby MRT station and major malls. The nearest MRT station is Admiralty which is more than 1km away. Admiralty Place and Admiralty Wet Market and Food Centre are next to Admiralty MRT Station.
However, there are three other ECs within a 1km radius of Northwave; namely, Parc Life, Northoaks and Woodsvale.
Among the four ECs, Northwave is the youngest, having obtained TOP in 2019; followed by Parc Life which obtained TOP a year earlier. Northoaks and Woodsvale, which are located beside each other, obtained TOP in 2000. The two older developments are also located across the road from Northwave.
Additionally, Northwave is the smallest with 358 units, followed by Parc Life (628 units), Woodsvale (696 units) and Northoaks (720 units).
Despite being slightly older than Northwave ($1,004 psf), Parc Life ($1,064 psf) is still more expensive because the two ECs are in different planning areas and districts, despite their proximity to each other. Northwave is in Woodlands planning area and District 25, while Parc Life is in Sembawang planning area and District 27.
Additionally, Parc Life is within a 1km radius of Sembawang MRT Station, Sembawang Shopping Centre and Sun Plaza. There are limited amenities near Northwave. The connectivity and convenience offered by the amenities near Parc Life gave a boost to its price.
Northoaks ($738 psf) and Woodsvale ($740 psf) are in the same average price range. The majority of the units in both projects have three bedrooms, which makes the developments affordable choices for families that want to live in the north region. The three primary schools and two secondary schools found within a 1km radius of Northoaks add to the appeal of the developments to families. Drawbacks include the age of the developments as well as distance from MRT stations and major malls.
Prive and Esparina Residences will be privatised soon
There are no ECs that will obtain TOP from 2009 to 2012 because the government stopped selling land for ECs from 2005 to 2009, before resuming in 2010. As such, ECs that obtained TOP in 2013 and 2014 will be the next batch to become fully privatised.
These ECs might see some spillover demand from condominium owners who want to downgrade. The new cooling measures in September stipulate that sellers of private homes must wait 15 months before being allowed to buy a resale HDB flat. As such, some might turn to the resale market for fully privatised ECs to avoid the 15-month waiting period.
Prices for ECs usually see an increase when they become fully privatised. As such, savvy local buyers might want to buy an EC that is almost 10 years old, stay in it for a couple of years before selling when it becomes fully privatised.
The Canopy has the lowest average price of $900 psf. Esparina Residences ($1,260 psf) has the highest average price, followed closely by Prive ($1,146 psf). Interestingly, both ECs are next in line to be fully privatised.
There are four ECs in District 19 that will be privatised soon. All four developments have at least one MRT or LRT station nearby.
Esparina Residences is across the road from Buangkok MRT Station, while Prive is walking distance of Punggol MRT Station and Cove LRT Station. Austville Residences is within a 500m radius of Kangkar LRT Station, while Riverparc Residence is within a 500m radius of Kadaloor and Riviera LRT Stations.
Average price for Esparina Residences is consistently trending above Prive by about $100 psf because Esparina Residences is within a 500m radius of Hougang Green Shopping Mall and the upcoming Sengkang Grand Mall. Waterway Point and the upcoming One Punggol are the nearest major malls to Prive, but they are more than 500m away.
Esparina Residences and Prive are well-suited for families because the majority of the units have three bedrooms and are at least 1,000 sq ft. However, Prive has more three-bedroom units within the development and has a lower average price. Additionally, Prive has three schools within a 500m radius while Esparina Residences only has one school.
Esparina Residences is an anomaly because it is the only EC in the area. Esparina Residences is surrounded by two completed condominiums (Jewel @ Buangkok and The Quartz) and an uncompleted integrated development (Sengkang Grand Residences). All four leasehold developments are within walking distance of Buangkok MRT Station.
Average price for uncompleted Sengkang Grand Residences is the highest at $1,768 psf, because it is an integrated development and youngest among the four developments. Buyers are usually willing to pay more for the connectivity and convenience offered by integrated developments. Future residents of Sengkang Grand Residences will enjoy easy access to Buangkok MRT Station and Sengkang Grand Mall.
Average price for Jewel @ Buangkok ($1,422 psf) is 12.9% higher than Esparina Residences ($1,260 psf), while The Quartz ($1,233 psf) has a slightly lower price. The price disparity between the trio could be attributed to lease decay. Jewel @ Buangkok (TOP in 2016) is younger than Esparina Residences (TOP in 2013), while The Quartz (TOP in 2009) is much older. Buyers on the lookout for bargains might want to consider The Quartz, which is the most affordable albeit the oldest. The upcoming Sengkang Grand Mall is expected to give a boost to prices of neighbouring developments.
Still under construction
There are seven ECs that are currently under construction. District 27 has the most expensive and the cheapest developments; namely North Gaia ($1,296 psf) and Parc Canberra ($1,083 psf). District 27 also has the smallest EC, namely Provence Residence with 413 units.
Hence, it is not surprising that District 27 has the most uncompleted ECs with three such developments, followed by District 19 with two projects.
The four ECs in District 27
Uncompleted Parc Canberra and Provence Residence are located beside each other, while two other ECs (The Brownstone and The Visionaire) are located across the road.
Despite being immediate neighbours, Provence Residence has a higher average price of $1,227 psf compared to Parc Canberra ($1,083 psf). Overall average price for Parc Canberra could have been dampened by it having 57 four-bedroom units, compared to Provence Residences which has only 24 four-bedroom units.
The Brownstone and The Visionaire obtained TOP in 2017 and 2018 respectively, which means that The Brownstone has just achieved the required MOP of five years while The Visionaire will do so next year. Both developments were launched around the same time and had similar launch prices of $700 to $900 psf. Current average prices for The Brownstone and The Visionaire are $1,078 psf and $1,083 psf respectively, which translates to increases of $180 to $380 psf from the launch prices.
Barring another black swan event like Covid-19 or a recession, it would be reasonable to expect a similar price growth for Parc Canberra and Provence Residences after the developments reach MOP.
Upcoming attractions
Copen Grand and Tenet are expected to be launched this quarter. Both ECs are in very different locations. Copen Grand is in the up-and-coming Tengah town in the west region, while Tenet is in the mature housing estate of Tampines in the east region.
Tampines North and Pasir Ris MRT Stations are within a 1km radius of Tenet and the upcoming Tampines North MRT Station on the Cross Island Line is within walking distance. There are no existing MRT stations within walking distance of Copen Grand, but three MRT stations on the upcoming Jurong Regional Line are expected to be nearby.
There are two schools within a 1km radius of Tenet but none for Copen Grand. However, if the radius is expanded to 2km, there are 11 schools near Copen Grand and 16 schools near Tenet.
Tengah is a new town planned to be a smart, sustainable and car-lite town within a forest setting. Future residents of Copen Grand will have a first-mover advantage because the development of the town will give a boost to the price of their property. As such, Copen Grand is expected to attract buyers who want an affordable smart home surrounded by nature.
Tenet is located in Tampines, which is a regional hub and a bustling mature residential estate. Tenet is expected to attract buyers who value the convenience and connectivity of living in an established residential enclave.
There are five condominiums within a 500m radius of Tenet. Three of them – D’Nest, The Palette and Elias Green – are located across the road from Tenet. Of the trio, Elias Green (TOP in 1994) is the oldest and hence the least costly ($844 psf). D’Nest is the most expensive at $1,209 psf), followed closely by The Palette ($1,202 psf). This could be because D’Nest (TOP in 2017) is younger than The Palette (TOP in 2015) by two years. Buyers who fail in their application for Tenet might want to consider these three leasehold condominiums.
To conclude
1. EC is an affordable choice for buyers who prefer non-public housing or buyers who want to avoid the 15-month waiting period when they downgrade from private condominiums.
2. Among the ECs that recently obtained TOP, Northwave is the smallest and the only development in District 25. However, there are limited amenities within walking distance.
3. ECs that will be fully privatised in the next few years provide an opportunity for the savvy buyer to snap up an asset with strong capital appreciation potential. District 19 has the most ECs that will be fully privatised in the next few years.
4. District 27 has four uncompleted ECs. Uncompleted Parc Canberra and Provence Residences are located across the road from The Brownstone and The Visionaire, which have just achieved MOP or will achieve MOP next year. Price growth for Parc Canberra and Provence Residences can be expected to follow a similar trend as their completed neighbours.
5. Tenet and Copen Grand are expected to be launched this quarter. Both ECs are located in very different areas and hence expected to attract different groups of buyers.
To find out more, please visit our new web page on executive condos
Check out the latest listings near Copen Grand, Tenet, The Brownstone, Prive, Buangkok MRT Station, Punggol MRT Station, Cove LRT Station, Kangkar LRT Station, Riviera LRT Stations, Pasir Ris MRT Station, Tampines North MRT Station
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