Artist’s impression of Hundred Palms Residences, the latest EC project which was sold out within seven hours.
Sales of executive condominiums (ECs) increased by 8.5 percent to 2,026 units in H1 2017 from 1,867 units during the same period a year ago, reported the Straits Times, citing data from the Urban Redevelopment Authority (URA).
Although no new projects were launched in the second quarter, developers sold 954 new units from previous launches. As a result, the supply of unsold and uncompleted ECs dwindled as of 30 June to 2,742 units, or the lowest level in over four years.
According to property experts, demand for this type of housing is forecasted to remain robust in light of improving market sentiment, limited EC stock and their more affordable cost.
“ECs tend to be priced 20 to 30 percent lower than a comparable private condo and, hence, would be the more economical option for the middle-income young families,” said Tricia Song, Colliers International’s Research Head for Singapore.
However, data shows that ECs in northern Singapore are not as sought-after as those in other regions, noted OrangeTee’s Research Head Wong Xian Yang.
For instance, the 497-unit iNz Residence in Choa Chu Kang still had 233 remaining units as of 30 June following its unveiling earlier this year.
On the other hand, buyers snapped up all 531 units at Hundred Palms Residences in Hougang within seven hours after it was launched on 22 July. Thus, there is a high chance that EC sales in Q3 2017 would also be stellar.
“The success of Hundred Palms is not solely due to the lack of upcoming supply of ECs, but it is also attributed to its location, which is within a mature HDB estate and there is a lack of competition of ECs,” explained Edmund Tie and Co’s Research Head Dr Lee Nai Jia.
Furthermore, the supply of ECs is expected to be limited as only one site at Sumang Walk yielding a total of 815 units will be offered under the H2 2017 Government Land Sales programme.
Another factor that could bolster EC sales is the soft growth of HDB resale prices, added ZACD Group’s Research Head Nicholas Mak.
“With HDB resale prices staying flat and prices of new condos possibly inching up, I don’t think HDB upgraders will pocket enough to pay $1.5 million or more for a condo… they may look at ECs, which are more affordable.”