High EC e-applications won’t guarantee good sales

Romesh Navaratnarajah6 May 2016

Artist's impression of Parc Life resize

Artist’s impression of the recently launched Parc Life EC in Sembawang.

Sales at recently launched executive condominiums (ECs) have not been stellar despite the large number of e-applications received, reported The Business Times.

But many property experts feel it is still acceptable in today’s market if 20 to 30 percent of the e-applications translates to sales. However, seven out of the 14 EC projects launched since 2014 failed to achieve even the minimum conversion rate during their launch weekend.

The latest EC to launch was the 628-unit Parc Life. Jointly developed by Frasers Centrepoint Limited and Keong Hong Holdings, it only sold 51 units during its launch last weekend despite recording over 700 e-applications.

During the week prior to that, Qingjian Realty’s The Visionaire sold 158 units out of 632 units, even though it attracted 859 e-applications.

In comparison, the number of e-applications some EC projects received during the market’s heyday in 2011 to 2013 easily surpassed the volume of units offered by two times, said Tan Tee Khoon, Managing Director of KF Property Network.

According to Nicholas Mak, Executive Director of SLP International, the low take-up rate is due to the large supply. “It’s just too much for the market to digest in that span of time (as) demand for ECs in suburban areas tend to be limited to upgraders or people who live in the area.”

This is especially true for developments being built in the same area and launched at roughly the same time, as they are competing for the same pool of eligible buyers who most likely submitted e-applications for multiple ECs.

For example, Parc Life and The Visionaire are both located in Sembawang, in the same neighbourhood where The Brownstone made its debut in July 2015. In Yishun, The Criterion was unveiled last October, followed closely by Signature At Yishun.

Meanwhile, Century 21 Chief Executive Ku Swee Yong believes the weak sales “are conclusive evidence that demand is exhausted” for this type of property. Based on the current pace of EC transactions, he thinks the market needs at least two years to fully absorb the remaining unsold units.

 

Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg

POST COMMENT

You may also like these articles

New rules for transfer of flat ownership

Previously, owners could freely transfer their unit to a family member to avoid paying the ABSD. HDB flat owners who want to relinquish their ownership in favour of another family member are no lo

Continue Reading4 May 2016

79% of Singaporeans satisfied with services of property agents

The survey found that consumers are mostly satisfied with the service standards of agents. (Photo: CEA)Nearly four out of five Singaporeans are pleased with the performance of property agents here

Continue Reading5 May 2016

Luxury home prices up 5.4% in Q1

Prices in Singapore are on the rise again. (Photo: Cheryl Marie Tay)Singapore recorded the eighth largest growth in luxury home prices in Knight Frank’s latest Prime Global Cities Index, with va

Continue Reading5 May 2016