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03-01-12, 20:34
http://www.straitstimes.com/PrimeNews/Story/STIStory_749659.html
Demand for ECs likely to hold in 2012
Published on Dec 29, 2011
By Cheryl Lim
EC SITES ON 1H2012 GLS PROGRAMME (http://www.straitstimes.com/STI/STIMEDIA/pdf/20111228/ST_IMAGES_CLEC.pdf)
DEMAND from HDB upgraders and first-time buyers will maintain the popularity of executive condominiums (EC) well into next year, but prices could soften, say analysts.
ECs received a shot in the arm in the second half of this year when the Government revised the monthly income ceiling from $10,000 to $12,000.
Demand was strong, with buyers snapping up 2,855 new EC units within the 11-month period to the end of last month. This outstripped the 2,535 new EC units launched in the period and included unsold units from earlier launched projects.
Supply will stay strong next year, with the Government ready to supply sites for up to 5,000 EC units through its land sales (GLS) programme.
Sites that can accommodate an estimated 3,460 EC units will be up for grabs in the first half of next year's programme, including plots on the confirmed and reserve lists.
The Straits Times understands the remaining EC units will come from the second half of next year's programme.
Ms Chia Siew Chuin, head of research at Colliers International, said prices of most mass market homes average around the $1,000 psf mark, which is making ECs popular given that they are usually priced at least 20 per cent lower.
'A strong demand for resale flats has also translated to higher prices, driving some buyers in that property segment to consider EC homes,' said Ms Chia.
Even the latest round of cooling measures, which may see private home prices fall, may not dampen demand for ECs. As long as ECs are still lower in price, buyers may opt for them as they may be more cautious about being leveraged, in line with the challenging economic conditions next year.
But other analysts are less optimistic.
Mr Nicholas Mak, executive director of research and consultancy at SLP International, said that while EC homes will still be in demand in the next six months, any economic slowdown will impact demand across all housing categories.
'The Government may project that a certain number of people will be looking to buy those homes this year, but in reality that could be a smaller number...
'During a downturn, potential buyers may change their minds, or they may postpone their property-buying plans.'
He added that the rush for ECs could be largely due to pent-up demand from the middle-income 'sandwich class', and it will be only a matter of time before this subsides.
Take cautious buyers and factor in the economic and market uncertainty expected in the new year, and it is likely that developer confidence in EC sites under next year's GLS programme could be tested.
'Developers' interest for EC sites will be site specific, and there could be some who may participate opportunistically since land and property prices are expected to be softer and more realistic in the economic slowdown,' said RST Research's Mr Ong Kah Seng.
Demand for ECs likely to hold in 2012
Published on Dec 29, 2011
By Cheryl Lim
EC SITES ON 1H2012 GLS PROGRAMME (http://www.straitstimes.com/STI/STIMEDIA/pdf/20111228/ST_IMAGES_CLEC.pdf)
DEMAND from HDB upgraders and first-time buyers will maintain the popularity of executive condominiums (EC) well into next year, but prices could soften, say analysts.
ECs received a shot in the arm in the second half of this year when the Government revised the monthly income ceiling from $10,000 to $12,000.
Demand was strong, with buyers snapping up 2,855 new EC units within the 11-month period to the end of last month. This outstripped the 2,535 new EC units launched in the period and included unsold units from earlier launched projects.
Supply will stay strong next year, with the Government ready to supply sites for up to 5,000 EC units through its land sales (GLS) programme.
Sites that can accommodate an estimated 3,460 EC units will be up for grabs in the first half of next year's programme, including plots on the confirmed and reserve lists.
The Straits Times understands the remaining EC units will come from the second half of next year's programme.
Ms Chia Siew Chuin, head of research at Colliers International, said prices of most mass market homes average around the $1,000 psf mark, which is making ECs popular given that they are usually priced at least 20 per cent lower.
'A strong demand for resale flats has also translated to higher prices, driving some buyers in that property segment to consider EC homes,' said Ms Chia.
Even the latest round of cooling measures, which may see private home prices fall, may not dampen demand for ECs. As long as ECs are still lower in price, buyers may opt for them as they may be more cautious about being leveraged, in line with the challenging economic conditions next year.
But other analysts are less optimistic.
Mr Nicholas Mak, executive director of research and consultancy at SLP International, said that while EC homes will still be in demand in the next six months, any economic slowdown will impact demand across all housing categories.
'The Government may project that a certain number of people will be looking to buy those homes this year, but in reality that could be a smaller number...
'During a downturn, potential buyers may change their minds, or they may postpone their property-buying plans.'
He added that the rush for ECs could be largely due to pent-up demand from the middle-income 'sandwich class', and it will be only a matter of time before this subsides.
Take cautious buyers and factor in the economic and market uncertainty expected in the new year, and it is likely that developer confidence in EC sites under next year's GLS programme could be tested.
'Developers' interest for EC sites will be site specific, and there could be some who may participate opportunistically since land and property prices are expected to be softer and more realistic in the economic slowdown,' said RST Research's Mr Ong Kah Seng.