Wednesday, December 28, 2011

Land for 5000 more Executive Condominiums will be released in 2012

Minister of State for National Development and Manpower Tan Chuan-Jin has announced that there will be land release for 5000 new executive condominiums (see What is an Executive Condominium (EC)?), a private housing and public housing hybrid popular among higher income Singaporeans. This number is nearly 30% of all ECs launched since their introduction in 1995 (14,600 units and 3000 are on their way). These units are restricted to Singaporeans in their new launch but they can be sold to foreigners when they pass the 10 years old age. They are also subject to income ceiling which was increased from 10,000 SGD per month to 12,000 SGD per month in August 2011. At a time when prices between so-called mass market condominium units and HDB flats are historically wide, they are becoming more popular among Singaporeans who are not eligible to buy BTO flats but also not earning enough to buy private flats.

In 2011 excluding December, 2,855 units of executive condominiums are sold by developers. This was more than 2,535, the number of units released the same period. Executive condominiums are popular because their per square foot prices are 20 per cent less than so-called mass market private flats which fetch average of 1,000 SGD psf. But it is not only priced out private property seekers showing interest. Since resale HDB prices are also up, many prefer to top up for EC with more facilities instead of buying a plain HDB unit.[1]

One thing should be noted that executive condominiums are popular as long as the gap between private housing and public housing prices is wide. If the economic slowdown severes and the gap closes, ECs may not be as popular as they are now.

[1] Demand For ECs likely to hold in 2012

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