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03-06-13, 17:36
http://www.businesstimes.com.sg/archive/thursday/specials/property/developers-upbeat-about-ec-market-20130531
Published May 31, 2013
Developers upbeat about EC market
Tender for Sengkang executive condo saw robust competition, healthy participation
By Kalpana Rashiwala
PROVISIONAL results for yesterday's tender for an executive condominium (EC) site in the Sengkang area, like that for a Woodlands EC site which closed earlier this month, led property consultants to conclude that developers remain confident about prospects for this market segment.
This is despite measures introduced in January to rein in some of the exuberance in the sector and more recently, strong hints from the government that its housing subsidy of up to $30,000 for first-time buyers who pick up an EC unit from a developer, is in for a change. ECs are a public-private housing hybrid.
At yesterday's tender closing, a 99-year EC site in Anchorvale Crescent drew a top bid of $330.65 per square foot per plot ratio (psf ppr) from Qingjian Realty (South Pacific) Group. This will be the group's fifth EC project.
Earlier this month, it clinched the Woodlands EC site plot with a winning bid of $341.21 psf ppr. That tender attracted seven bids.
At yesterday's tender, Qingjian's bid was 3.2 per cent higher than the next highest offer of $320.45 psf ppr placed by City Developments unit Bellevue Properties.
Kheng Leong partnered Low Keng Huat to bid at $316.68 psf ppr. Frasers Centrepoint's unit FCL Place and Hytech Builders joined forces, offering $308.30 psf ppr. The two other bids were from EL Development ($275.75 psf ppr) and Teambuild Land unit Ecco Development, which offered $266.59 psf ppr for the site, which can yield an estimated 690 units.
"In this tender, the range of bids was quite tight, with the highest being only 24 per cent above the lowest bid submitted," commented Nicholas Mak, executive director at SLP International Property Consultants. This shows that developers are confident that demand for ECs will remain healthy as they are meant for owner occupiers, he added.
Agreeing, Colliers International director of research and advisory Chia Siew Chuin said: "The healthy participation rate as well as the robust competition among the top bidders signify that developers are still upbeat towards the EC market."
Ong Teck Hui, national director of research and consultancy at Jones Lang LaSalle, noted that the $331 psf ppr top bid surpassed the $296.48 psf ppr for the Sengkang West Way site last November by 11.5 per cent. This suggests that EC land prices in this part of Sengkang are creeping up on the back of stronger demand by developers.
One industry player told BT that some developers could be taking the view that if the housing subsidy for new EC buyers is indeed cut or removed altogether and assuming that there is no retroactive application for earlier sites, this will boost demand for projects on such sites. "Buyers who still want to use a housing subsidy for an EC purchase would have to go for a project on a site sold before the new rules, goes the thinking," he said.
The site tendered yesterday is near Farmway LRT Station and Sengkang Riverside Park.
ECs come with initial buyer eligibility and resale conditions that are completely lifted 10 years after the completion of an EC development.
CBRE executive director Joseph Tan estimates Qingjian's breakeven cost at about $650 psf. Li Jun, general manager of Qingjian Realty (South Pacific) Group, forecast last night that the average selling price for the project could be in the $730-780 psf range, subject to market and economic conditions at the point of launch. "Qingjian assessed that the property market is stable and that the EC market is healthy," he added.
It will be launching its next EC development, the 512-unit Ecopolitan, at Punggol Way next month. E-applications open on June 28. The group has two earlier EC projects - RiverParc Residence and Waterbay - both of which are under construction in Punggol, and fully sold.
Published May 31, 2013
Developers upbeat about EC market
Tender for Sengkang executive condo saw robust competition, healthy participation
By Kalpana Rashiwala
PROVISIONAL results for yesterday's tender for an executive condominium (EC) site in the Sengkang area, like that for a Woodlands EC site which closed earlier this month, led property consultants to conclude that developers remain confident about prospects for this market segment.
This is despite measures introduced in January to rein in some of the exuberance in the sector and more recently, strong hints from the government that its housing subsidy of up to $30,000 for first-time buyers who pick up an EC unit from a developer, is in for a change. ECs are a public-private housing hybrid.
At yesterday's tender closing, a 99-year EC site in Anchorvale Crescent drew a top bid of $330.65 per square foot per plot ratio (psf ppr) from Qingjian Realty (South Pacific) Group. This will be the group's fifth EC project.
Earlier this month, it clinched the Woodlands EC site plot with a winning bid of $341.21 psf ppr. That tender attracted seven bids.
At yesterday's tender, Qingjian's bid was 3.2 per cent higher than the next highest offer of $320.45 psf ppr placed by City Developments unit Bellevue Properties.
Kheng Leong partnered Low Keng Huat to bid at $316.68 psf ppr. Frasers Centrepoint's unit FCL Place and Hytech Builders joined forces, offering $308.30 psf ppr. The two other bids were from EL Development ($275.75 psf ppr) and Teambuild Land unit Ecco Development, which offered $266.59 psf ppr for the site, which can yield an estimated 690 units.
"In this tender, the range of bids was quite tight, with the highest being only 24 per cent above the lowest bid submitted," commented Nicholas Mak, executive director at SLP International Property Consultants. This shows that developers are confident that demand for ECs will remain healthy as they are meant for owner occupiers, he added.
Agreeing, Colliers International director of research and advisory Chia Siew Chuin said: "The healthy participation rate as well as the robust competition among the top bidders signify that developers are still upbeat towards the EC market."
Ong Teck Hui, national director of research and consultancy at Jones Lang LaSalle, noted that the $331 psf ppr top bid surpassed the $296.48 psf ppr for the Sengkang West Way site last November by 11.5 per cent. This suggests that EC land prices in this part of Sengkang are creeping up on the back of stronger demand by developers.
One industry player told BT that some developers could be taking the view that if the housing subsidy for new EC buyers is indeed cut or removed altogether and assuming that there is no retroactive application for earlier sites, this will boost demand for projects on such sites. "Buyers who still want to use a housing subsidy for an EC purchase would have to go for a project on a site sold before the new rules, goes the thinking," he said.
The site tendered yesterday is near Farmway LRT Station and Sengkang Riverside Park.
ECs come with initial buyer eligibility and resale conditions that are completely lifted 10 years after the completion of an EC development.
CBRE executive director Joseph Tan estimates Qingjian's breakeven cost at about $650 psf. Li Jun, general manager of Qingjian Realty (South Pacific) Group, forecast last night that the average selling price for the project could be in the $730-780 psf range, subject to market and economic conditions at the point of launch. "Qingjian assessed that the property market is stable and that the EC market is healthy," he added.
It will be launching its next EC development, the 512-unit Ecopolitan, at Punggol Way next month. E-applications open on June 28. The group has two earlier EC projects - RiverParc Residence and Waterbay - both of which are under construction in Punggol, and fully sold.